Academic journal article Journal of Southeast Asian Economies

The ASEAN Economic Community and Conflicting Domestic Interests: An Overview

Academic journal article Journal of Southeast Asian Economies

The ASEAN Economic Community and Conflicting Domestic Interests: An Overview

Article excerpt

1. Introduction

The prospect of an ASEAN Economic Community (AEC) has progressively raised interest in the state of economic integration among members of the Association of Southeast Asian Nations (ASEAN). Although the Chairman's Statement from the 26th ASEAN Summit (April 2015) indicated that the current rate of implementation of the 2007 AEC Blueprint ("the Blueprint") goals stands at 90.5 per cent (ASEAN Secretariat 2015), there are numerous studies that question the use of a scorecard approach as a monitoring mechanism. These implementation scores do not necessarily capture the actual extent of economic integration in the region. For instance, recent business surveys show that although tariffs have been reduced or eliminated among ASEAN countries, non-tariff barriers are still prevalent (Kawai and Wignaraja 2011; Hu 2013). These include non-automatic licensing schemes, technical regulations, benchmarked standards, administrative costs, which are attached to the use of preferential measures, and a lack of physical and institutional connectivity (ASEAN Secretariat and World Bank 2013). Similarly, ASEAN citizens can hardly attribute the rise in incomes or better job opportunities to the AEC initiatives (Chia 2011a). These caveats suggest that not all of the AEC targets can be achieved by the end of 2015. This deadline may well mark a milestone rather than the complete achievement of intended goals.

How then do we interpret the disparity between stated intentions, goals and targets of the AEC and its current state of achievements and implementation? The literature frequently attributes the lack of effective progress in ASEAN economic integration to a lack of political will. One possible explanation for the lack of political will is the fact that deep regional economic cooperation faces domestic opposition arising from various economic conflicts. For example, after the Treaty of Rome, it took the European Economic Community nearly forty years to achieve its objective of a single market. The stalling of the Doha Development Agenda can also be attributed to domestic resistance and hostility from protectionist groups in participating economies that prevent member countries from achieving the required single undertaking rule. Likewise, for ASEAN, even though the AEC is a regional initiative, implementation is left to the individual member economies. Thus, regional cooperation might have to overcome domestic antagonism. In other words, while ASEAN's economic integration is a response by the region's respective governments to globalization, it may not be supported by some domestic interest groups.

This special issue of the Journal of Southeast Asian Economies surveys developments in the past decade (2003-14) and argues that conflicting economic interests in each country is one of the possible reasons for the current fragmented state of community-building in the region. The objective of this overview paper is to explore this issue and to set the stage for the country studies featured in this issue. This paper is organized as follows: the next section briefly synthesizes relevant literature on economic integration and contestations in trade policy formulation to provide an analytical framework for the featured country studies. Section 3 provides an account of the AEC and its progress since the Blueprint came into effect in 2008. Section 4 offers a preview of the country studies in this issue and synthesizes the arguments on how conflicting domestic interests have affected the economic community building process in each of these countries. Finally, the last section summarizes the key findings of this paper and provides some policy suggestions for deepening economic integration in ASEAN beyond 2015.

2. The Theoretical Literature on Economic Integration and Conflicting Domestic Interests

There are several definitions and interpretations of economic integration. Balassa (1961, p. 1) defines economic integration as "the abolition of discrimination within an area" and Kahnert et al. …

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