The ASEAN Economic Community: A Conceptual Approach by Jacques Pelkmans (review)

On 31 December 2015, the ASEAN Economic Community (AEC) was officially launched with the intent to mark a new milestone in the path to deeper integration in Southeast Asia. The AEC, together with the Political-Security Community and the Socio-Cultural Community form the three pillars of the ASEAN Community. Many questions have arisen regarding the significance and importance of this long-awaited achievement for economic development and the emergence of the region as a political actor on the international scene. With multiple Chinese initiatives in Asia such as the Free Trade Area of the Asia-Pacific, the Asian Investment Infrastructure Bank and the One Belt One Road initiative, the competing U.S.-led Trans-Pacific Partnership initiative, as well as the conflict over the South China Sea, the discussion on the concept of ASEAN is timely.

The book focuses on the AEC and is part of a wider research project entitled “Integration Through Law: The Role of Law and the Rule of Law in ASEAN Integration” undertaken by the Centre for International Law at the National University of Singapore, which aims at achieving a theory and conceptual framework of Asian legal integration. This explains why the book applies a conceptual approach to make the AEC intelligible. Two key concepts of the AEC are analysed in detail: the “single market” and “single production base for segments of global value chains” and their interrelations. The book also gives ample room to an extensive scrutiny of the instruments of implementation.

Following the short introductory chapter which justifies the conceptual approach, Chapter 2 is the longest chapter by far (69 pages) and is the core of the book. It delineates the foundations of economic integration in the general case and a modern stage approach specifying the logics of deepening the commitments and widening of the scope of the AEC. There are two aspects of deepening commitments: “negative” (the removal of discrimination and barriers) and “positive” integration (the joint action by member states to create new instruments, rules and institutions). One of the strengths of the chapter resides in the application of this framework to clearly locate where the European Union (EU), the North American Free Trade Area (NAFTA) and the AEC stand. It is widely known that the integration in EU is much deeper than other agreements, so the comparison between NAFTA and AEC has more relevance. What makes NAFTA work is the combination of a very detailed treaty at the outset and a powerful private litigation culture which can also count on a solid judicial system. This confers credibility and transparency in the implementation and compliance of the treaty in the eyes of businesses. ASEAN typically starts with a “vision” expressed by political leaders, while the details are set through lengthy procedures under the strict control of national governments. This creates uncertainty and a “waiting attitude” by businesses. The absence of any compliance mechanism and possibility of private litigation against governments undermines ASEAN’s credibility and transparency. Only items that fit with national interests are effectively implemented by each government. The chapter proceeds with elaborating on four strategic choices that ASEAN faces to increase its coherence and credibility. This leads to the presentation of two different economic rationales of the AEC: “a cooperative ASEAN-led development strategy” and “a pro-competitive quasi-single market strategy for development”.

Chapter 3 defines the concept of the AEC by looking at its core documents such as the 2003 Bali Concord II Declaration and the recommendations given by the High Level Task Force (HTLF), which is responsible for giving operational substance to key concepts included in the declaration. The chapter not only shows a weak link between the “Bali Vision” and the recommendations, but also shows that the HTLF falls short of providing a clear interpretation of the five key concepts: free flow; single market; single production base; equitable development; and ASEAN’s economic competitiveness. One additional difficulty is that while ASEAN leaders give repeated assurance to not imitate the structure of...