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The following article is an excerpt from the presentation made by the author during a conference on International Trade Remedy Measures sponsored by Asian Development Bank (ADB) last February 23 – 27, 2004 in Hanoi, Vietnam.

ASEAN – Historical Background. In August 1967, against the backdrop of a major conflict in the then Indochina (now Vietnam), five countries (Indonesia, Malaysia, Philippines, Singapore and Thailand) formally agreed to the creation of the Association of Southeast Asian Nations (ASEAN). One of the immediate concerns of the association then was to settle the various conflicts among the member countries. The ASEAN Declaration itself stated that:

“The Association represents the collective will of the nations to bind themselves together in friendship and cooperation and, through joint efforts and sacrifices, secure for their peoples and for posterity the blessings of peace, freedom, and prosperity.”

From that time on, there had been numerous agreements and accords among the member countries, foremost of which are the following:

  1. Zone of Peace, Freedom and Neutrality Declaration, Kuala Lumpur, 1971;
  2. Treaty of Amity and Cooperation (TAC), 1976;
  3. Framework Agreement on Enhancing Economic Cooperation, Singapore, 1992 (launching of AFTA);
  4. ASEAN Vision 2020, Kuala Lumpur, 1997; and
  5. Declaration of ASEAN Accord II, Bali, 7 October 2003

The latest agreement is of paramount importance particularly for the trading community because it established the framework for the establishment of the ASEAN Economic Community (AEC) by 2020 at the latest. The concept of the AEC is something similar to the European Union, without the benefit however of having a common customs and tariff policy as against non-member countries.

From the original five members, ASEAN now has 10 member countries. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Laos and Myanmar on 23 July 1997, and Cambodia on 30 April 1999.

What is ASEAN? ASEAN is basically an inter-governmental organization. In contrast to the European Union, it does not have supranational character to act out independently of its members and it has no regional parliament or council of ministers with law-making powers.

The decision of the organization on matters of common interest is based on the consensus of all members. The organization is supported by the ASEAN Secretariat, which is headed by Secretary-General with ministerial status to initiate, advise, coordinate and implement ASEAN activities.

Of the present 10 member countries of ASEAN, there are varying levels of economic development. There are currently three non-WTO members, namely, Laos, Vietnam and Myanmar. Laos and Vietnam are however set to join WTO very soon.

ASEAN at Cancún. During the ministerial conference of the WTO held in November 2001 in Doha, Qatar, member countries agreed to a new round of negotiations involving numerous trade subjects. This round of negotiations is now commonly known as the Doha Round. Prior to the Fifth Ministerial Conference of the WTO in Cancún last September 2003, preparatory work was ongoing on these Doha Development Round (DDA) issues. As can be seen later on, no agreements were made on these DDA issues during the meeting in Cancún. The main disagreement during the meeting was the substance of agriculture draft. In particular, the main obstacles were the issues involving:

  1. substantial reduction in domestic support and export subsidies in developed countries (estimated at US$300 Billion a year); and
  2. demand for market access to developing countries.

For most developing countries, what was seen to be unacceptable was the demand from developed countries to further open its market for industrial goods even if developed countries remained non-committal on opening up its agricultural market to developing countries through substantial reduction of domestic support and export subsidies.

Several member countries of ASEAN were very active in raising issues with regard to the agricultural draft. The Cairns Group, which included Indonesia, Malaysia, Philippines and Thailand, had a very strong position in regards to the removal of subsidies provided by developed countries. The Group 20+, which included Indonesia, Philippines and Thailand, was mainly credited for the failure of the talks in Cancún and was also very vocal on its position in regards to agriculture.

Recent ASEAN developments. As a result of the collapse of the talks in Cancún, some member countries of ASEAN had expressed some doubts as to the multilateral trading system and “single undertaking” model of negotiations. Notwithstanding that, ASEAN has signified its general support for multilateralism and the DDA as indicated in recent official pronouncements.

However and despite the willingness to engage in substantive discussion by the major trading countries (e.g. US and EU), there seems to be no sense of urgency with regards to DDA as far as ASEAN is concerned. What we have seen in recent months is the focus of ASEAN on bilateral and regional arrangements while the WTO talks remain on hold.

Negotiations are now ongoing for creating a free trade in East Asia. Particularly, ASEAN is now negotiating for free trade agreements with Japan, China, Korea and India.

The author is an international trade and customs consultant, and a licensed customs broker. He is also a partner of the law firm of David Leabres Uvero Gaticales Mosquera Samson. For your comments, he may be contacted at agaton.uvero@wtiphils.com or at (632) 4002145 / 4050021.

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