Bumpy road ahead for Asean

The Strait Times, Apr 4, 2010

FLAWS in Asean's economic integration plans are being exposed as some members struggle to adapt to a massive free-trade deal with China, and the US and EU opt to pursue pacts with individual states.

Grand plans for the establishment of an Asean Economic Community (AEC) by 2015 are likely to be a key topic when leaders of the Association of Southeast Asian Nations hold their annual summit next week in Vietnam's capital Hanoi.

But wide development gaps within the region, entrenched domestic interests and the perennial distraction of Myanmar's failure to embrace democracy continue to weigh down the group's activities and global ties, analysts say. The integration concept goes beyond freeing up trade - it also includes physical connectivity through better rail and air links and the unhampered movement of people and capital in the 10-member bloc.

But soon after a giant free-trade agreement (FTA) between Asean and China went into effect this year, the region's biggest member, Indonesia, under pressure from domestic industries, said it wanted some terms renegotiated. The European Union had also ditched earlier plans to negotiate an FTA collectively with Asean, and instead launched separate talks with individual countries - an option also favoured by the United States.

Hank Lim, a senior research fellow with the Singapore Institute of International Affairs (SIIA), said the main reason the EU and the US do not want to negotiate a regional pact is the group's vastly differing levels of economic development. 'It is impossible to negotiate a high-quality FTA with the Asean 10 collectively,' Mr Lim told AFP.

Alongside Indonesia and Vietnam, Asean's eclectic membership also includes Singapore, whose US$35,000 (S$49,028) per capita income and gleaming skyscrapers are a stark contrast to poverty-ridden Laos and largely agricultural Cambodia. The group's other members are Brunei, Malaysia, the Philippines and Thailand - making a collection of emerging democracies and monarchies, and a military dictatorship in the form of Myanmar. -- AFP