INTRODUCTION TO ASEAN

This unofficial introduction to ASEAN is prepared by CIL staff. For official information on ASEAN, please visit the
ASEAN Secretariat Website and its About ASEAN section.
ASEANs Founding
The Association of Southeast Asian Nations (ASEAN) was founded on 8 August 1967 when the Foreign Ministers of
Indonesia, Malaysia, Singapore, Thailand and the Philippines completed negotiations on the 1967 ASEAN
Declaration (also known as the Bangkok Declaration). Against a backdrop of the Cold War and the tumultuous
transition to independence occurring in many Southeast Asian states, ASEANs objective at its founding was to
accelerate the economic growth, social progress and cultural development in the region through joint endeavours in
the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful community
of South-East Asian Nations.
Such a commitment was of great importance for building trust in a region divided by stark differences of ethnicity
and a scant history of inter-state cooperation during the period of colonization. As Southeast Asian countries
struggled with newfound independence in the 1960s, differing visions of fiery nationalism and what shape the region
should take in the post-colonial era gave rise to territorial disputes and confrontations amongst members even as
neighbouring countries in Indochina were in the throes of war and internal conflict. In fact relations between two
founding members, Malaysia and the Philippines, were not normalised until 1969. The 1967 Bangkok
Declarationwas an initiative to ensure peace and stability in the region, through a commitment to work together and
deal peacefully with mutual differences. Member states hoped to forge an independent bloc in Southeast Asia, which
would not be dominated or exploited by external powers. Today, the notions of sovereignty, equality, territorial
integrity and non-interference among member states remain central tenets of ASEAN unity and cooperation.

ASEANs primary mode of activity is inter-governmental meetings among the representatives of the ten member
states. ASEAN institutions do not include any sort of assembly representing the people of ASEAN, although various
ASEAN institutions maintain contact with civil society organizations in the region and the ASEAN InterParliamentary Assembly. The latter is not officially a part of ASEAN as to date, only eight member countries
political systems incorporate representative legislative bodies.

OBJECTIVE OF ASEAN
At the time of ASEANs founding, the primary objective of furthering regional cooperation was couched in
generalterms in the 1967 Bangkok Declaration.
Some of the earliest ASEAN initiatives were those that pertained to norms of peace and security in the region,
including the 1971 Declaration on the Zone of Peace, Freedom and Neutrality (ZOPFAN) and the 1976 Treaty of
Amity and Cooperation. This was later supplemented by the 1995 Southeast Asia Nuclear Weapons Free
Zone(SEANWFZ) and the 2002 Declaration on the Conduct of Parties in the South China Sea.
In the early years, ASEAN also initiated cooperation on economic and cultural projects, which were seen as means to
enhance regional stability. Some early initiatives were in the areas of preferential trading agreements, industrial
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complementation, agriculture, tourism, cultural and media cooperation, and the promotion of Southeast Asian
studies.
The objectives of ASEAN were broadened with the notion of an ASEAN Community encompassing security,
economic, social and cultural cooperation. The idea of the ASEAN Community was seeded in the 1976 Declaration
of ASEAN Concord (also known as the Bali Concord), and further developed into the three specific areas of
security, economic and socio-cultural cooperation in the 1997 ASEAN Vision 2020, and the 2003 Declaration of
ASEAN Concord II (Bali Concord II). ASEAN continues to work towards the attainment of these goals, guided by a
series of specific targets and work plans for each of the three communities. ASEANs official work plans include
theHanoi Plan of Action 1997-2003 (HPA), Vientiane Action Programme 2004-2010 (VAP), and now the Roadmap
for an ASEAN Community (2009-2015) comprising the ASEAN Political-Security Blueprint, ASEAN Economic
Blueprint, ASEAN Socio-Cultural Blueprint and the Initiative for ASEAN Integration Workplan II.
Recent priorities for the ASEAN Community in 2009-2010 include enhancing connectivity, financial
stability, sustained development, responses to climate change and the implementation of the ASEAN Charter.

Asean Principles set out in the charter include:

Emphasising the centrality of ASEAN in regional cooperation.

Respect for the principles of territorial integrity, sovereignty, non-interference and national identities of
ASEAN members.

Promoting regional peace and identity, peaceful settlements of disputes through dialogue and consultation,
and the renunciation of aggression.

Upholding international law with respect to human rights, social justice and multilateral trade.

Encouraging regional integration of trade.

Appointment of a Secretary-General and Permanent Representatives of ASEAN.

Establishment of a human rights body and an unresolved dispute mechanism, to be decided at ASEAN
Summits.

Development of friendly external relations and a position with the UN (like the EU)

Increasing the number of ASEAN summits to twice a year and the ability to convene for emergency
situations.

Reiterating the use of the ASEAN flag, anthem, emblem and national ASEAN day on August 8.

THE PURPOSES OF ASEAN

1. To maintain and enhance peace, security and stability and further strengthen peace-oriented values in the region;
2. To enhance regional resilience by promoting greater political, security, economic and socio-cultural cooperation;
3. To preserve Southeast Asia as a Nuclear Weapon-Free Zone and free of all other weapons of mass destruction;
4. To ensure that the peoples and Member States of ASEAN live in peace with the world at large in a just, democratic
and harmonious environment;
5. To create a single market and production base which isstable, prosperous, highly competitive and economically
integrated with effective facilitation for trade and investment in which there is free flow of goods, services and
investment; facilitated movement of business persons, professionals, talents and labour; and freer flow of capital;
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6. To alleviate poverty and narrow the development gap within ASEAN through mutual assistance and cooperation;
7. To strengthen democracy, enhance good governance and the rule of law, and to promote and protect human rights
and fundamental freedoms, with due regard to the rights and responsibilities of the Member States of ASEAN;
8. To respond effectively, in accordance with the principle of comprehensive security, to all forms of threats,
transnational crimes and transboundary challenges;
9. To promote sustainable development so as to ensure the protection of the regions environment, the sustainability
of its natural resources, the preservation of its cultural heritage and the high quality of life of its peoples;
10. To develop human resources through closer cooperation in education and life-long learning, and in science and
technology, for the empowerment of the peoples of ASEAN and for the strengthening of the ASEAN Community;
11. To enhance the well-being and livelihood of the peoples of ASEAN by providing them with equitable access to
opportunities for human development, social welfare and justice;
12. To strengthen cooperation in building a safe, secure and drug-free environment for the peoples of ASEAN;
13. To promote a people-oriented ASEAN in which all sectors of society are encouraged to participate in, and benefit
from, the process of ASEAN integration and community building;
14. To promote an ASEAN identity through the fostering of greater awareness of the diverse culture and heritage of
the region; and
15. To maintain the centrality and proactive role of ASEAN as the primary driving force in its relations and
cooperation with its external partners in a regional architecture that is open, transparent and inclusive.

GENERAL PRINCIPLES OF ASEAN

1. In pursuit of the Purposes stated in Article 1, ASEAN and its Member States reaffirm and adhere to the
fundamental principles contained in the declarations, agreements, conventions, concords, treaties and other
instruments of ASEAN.
2. ASEAN and its Member States shall act in accordance with the following Principles:
(a) respect for the independence, sovereignty, equality, territorial integrity and national identity of all ASEAN
Member States;
(b) shared commitment and collective responsibility in enhancing regional peace, security and prosperity;
(c) renunciation of aggression and of the threat or use of force or other actions in any manner inconsistent with
international law;
(d) reliance on peaceful settlement of disputes;
(e) non-interference in the internal affairs of ASEAN Member States;
(f) respect for the right of every Member State to lead its national existence free from external interference,
subversion and coercion;
(g) enhanced consultations on matters seriously affecting the common interest of ASEAN;
(h) adherence to the rule of law, good governance, the principles of democracy and constitutional government;
(i) respect for fundamental freedoms, the promotion and protection of human rights, and the promotion of social
justice;
(j) upholding the United Nations Charter and international law, including international humanitarian law, subscribed
to by ASEAN Member States;

(k) abstention from participation in any policy or activity, including the use of its territory, pursued by any ASEAN
Member State or non-ASEAN State or any non-State actor, which threatens the sovereignty, territorial integrity or
political and economic stability of ASEAN Member States;
(l) respect for the different cultures, languages and religions of the peoples of ASEAN, while emphasising their
common values in the spirit of unity in diversity;
(m) the centrality of ASEAN in external political, economic, social and cultural relations while remaining actively
engaged, outward-looking, inclusive and non-discriminatory; and
(n) adherence to multilateral trade rules and ASEANs rules-based regimes for effective implementation of economic
commitments and progressive reduction towards elimination of all barriers to regional economic integration, in a
market-driven economy.

ADVANTAGES AND DISADVANTAGES OF ASEAN

Criticism
Western countries have criticized ASEAN for being too "soft" in its approach to promoting human rights and
democracy in the junta-led Myanmar. Despite global outrage at the military crack-down on peaceful protesters in
Yangon, ASEAN has refused to suspend Myanmar as a member and also rejects proposals for economic sanctions.
This has caused concern as the European Union, a potential trade partner, has refused to conduct free trade
negotiations at a regional level for these political reasons. International observers view it as a "talk shop", which
implies that the organization is "big on words but small on action".
During the 12th ASEAN Summit in Cebu, several activist groups staged anti-globalization and anti-Arroyo rallies.
[68] According to the activists, the agenda of economic integration would negatively affect industries in the
Philippines and would cause thousands of Filipinos to lose their jobs. They also viewed the organization as
"imperialistic" that threatens the country's sovereignty. A human rights lawyer from New Zealand was also present to
protest about the human rights situation in the region in general.
ASEAN has agreed to an ASEAN human rights body which will come into force in 2009. The Philippines, Malaysia,
Indonesia and Thailand want this body to have an enforcement capacity, however Singapore, Viet Nam, Burma, Laos
and Cambodia do not.

THE GOOD:
Free Trade Area
The foundation of the AEC is the ASEAN Free Trade Area (AFTA), a common external preferential tariff scheme to
promote the free flow of goods within ASEAN.[44] The ASEAN Free Trade Area (AFTA) is an agreement by the
member nations of ASEAN concerning local manufacturing in all ASEAN countries. The AFTA agreement was
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signed on 28 January 1992 in Singapore. When the AFTA agreement was originally signed, ASEAN had six
members, namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam joined in 1995,
Laos and Myanmar in 1997, and Cambodia in 1999. The latecomers have not fully met the AFTA's obligations, but
they are officially considered part of the AFTA as they were required to sign the agreement upon entry into ASEAN,
and were given longer time frames in which to meet AFTA's tariff reduction obligations.

Comprehensive Investment Area

The ASEAN Comprehensive Investment Area (ACIA) will encourage the free flow of investment within ASEAN.
The main principles of the ACIA are as follows
* All industries are to be opened up for investment, with exclusions to be phased out according to schedules
* National treatment is granted immediately to ASEAN investors with few exclusions
* Elimination of investment impediments
* Streamlining of investment process and procedures
* Enhancing transparency
* Undertaking investment facilitation measures
Full realization of the ACIA with the removal of temporary exclusion lists in manufacturing agriculture, fisheries,
forestry and mining is scheduled by 2010 for most ASEAN members and by 2015 for the CLMV (Cambodia, Lao
PDR, Myanmar, and Vietnam) countries.
Trade in Services
An ASEAN Framework Agreement on Trade in Services was adopted at the ASEAN Summit in Bangkok in
December 1995.Under the agreement, ASEAN members are negotiating intra-regional services liberalization in
several sectors, including air transport, business services, construction, financial services, maritime transport,
telecommunications and tourism. Although some sectors have liberalized faster, such as air transport, other sectors
remain subject to continued negotiation. Efforts to expand the scope of the Framework Agreement also remain
subject to continued negotiations.

AIMS AND IT'S FUNCTION Of ASEAN

As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:
To accelerate the economic growth, social progress and cultural development in the region through joint endeavours
in the spirit of equality and partnership in order to strengthen the foundation for a prosperous and peaceful
community of Southeast Asian Nations;
To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship
among countries of the region and adherence to the principles of the United Nations Charter;
To promote active collaboration and mutual assistance on matters of common interest in the economic, social,
cultural, technical, scientific and administrative fields;
To provide assistance to each other in the form of training and research facilities in the educational, professional,
technical and administrative spheres;

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To collaborate more effectively for the greater utilisation of their agriculture and industries, the expansion of their
trade, including the study of the problems of international commodity trade, the improvement of their transportation
and communications facilities and the raising of the living standards of their peoples;
To promote Southeast Asian studies; and
To maintain close and beneficial cooperation with existing international and regional organisations with similar aims
and purposes, and explore all avenues for even closer cooperation among themselves.

IMPORTANCE OF ASEAN
A S Cambodia draws nearer to the date in 1997 when it hopes to become a member ofthe Association of South East
Asian Nations (ASEAN) it reaches a pivotal time inits economic and political growth.Its full acceptance into
ASEAN will mark a tremendous achievement in the rebuildingof the Kingdom.The economic repercussions will be
significant and likely painful as Cambodia graduallymoves its import tariffs into line with those required by the
organization. However,the long term importance of ASEAN membership should not be underestimated.Regional
groupings based on economics are becoming increasingly important as theworld moves toward the twenty-first
century.There are at least 32 economic groupings of some form now in existence: three inEurope, four in the Middle
East, five in Asia and ten each in Africa and the Americas.Some of these groupings around the world have the
superstructure of nation states(such as the European Union); some (like the ASEAN Free Trade Area or AFTA),
aremultinational agreements that tend to be more political arrangements than cohesivetrading blocs at present. With
respect to the three major blocs - the North American,western European and Asian - intra-bloc trade has grown
rapidly, while trading betweenthe blocs or with outsiders has either declined or grown far more slowly.The
development of a unified trading bloc in Asia has been quite different from thatin Europe and in the Americas.While
European and North American arrangements tend to have been driven by politicalwill, market forces and more
pragmatic considerations are what have been compellingpoliticians in Asia to move toward more a formal
integration.First, European and American markets are significant for the Asian producers andsome type of
organization or bloc may be needed to maintain leverage and balanceagainst the two other blocs.Secondly, given that

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much of the growth in trade for the nations in the region isfrom intra-Asian trade, having a common understanding
and policies is becoming moreand more necessary.A future arrangement will most likely be using the frame of the
most establishedarrangement in the region, ASEAN.ASEAN as a regional body has grown up for various
purposes.Defense and a common foreign policy were initially more important reasons for theformation of the
grouping than the goal of economic development. But, with perceived threats to safety receding, economic
development has taken on a more important role as the general goal of the ASEAN states.The states now have
booming economies and have attracted much attention from foreign
investors.Traditionally, the Asian region has received more foreign investment than any otherpart of the developing
world.There has been significant inter-regional investment, with capital from countrieslike Singapore, Hong Kong
and Taiwan moving to other countries in the region. Thereis also a considerable and ever increasing flow of capital
from one ASEAN state intoanother in the form of foreign investment.The states of the region have mixed economies
and are inclined towards growth thatis led by foreign investment.Within the ASEAN region, the example provided
by Singapore which grew spectacularlythrough foreign investment is one factor that makes states of the region more
hospitableto foreign investment than many other areas of the world.The attraction to foreign investment, however, is
balanced by nationalism and understandableefforts to ensure that investment that is made will further the economic
developmentof the state and not be detrimental to local business interests.For this reason, some control over foreign
investment has been instituted in varyingdegrees in all ASEAN states.The techniques used by the ASEAN states to
attract foreign investment are largely
similar. The use of tax incentives as a means of channeling investment into desiredareas has been widely prevalent
and there have in the past been calls for a coordinationof efforts on a regional basis on the granting of such
incentives.Other moves to increase regional economic cooperation have included the ASEAN IndustrialJoint
Venture, established in 1983 as a means of encouraging the development of intra-regionalproduction.This is also a
concept that promotes cooperation.There have also been efforts to develop areas which have not been traditionally
attractiveto investors through the creation of "growth areas" such as the trianglebetween Singapore, Johore (a state in
Malaysia) and the Riau Islands of Indonesia.The aim for this particular area is for Malaysia and Indonesia to provide
land andother natural resources and Singapore to provide management and technical expertisefor the development of
industries within the triangle. Other "growth areas"include a triangle linking Medan in Indonesia, Phuket in
Thailand and Penang in Malaysia.Before late 1991, ASEAN had no real structures, and consensus was reached
throughinformation consultations.In October 1991, ASEAN members announced the formation of a customs union
calledASEAN Free Trade Area (AFTA).A customs union is a grouping whose members dismantle barriers to trade in
goodsand services among themselves and establish a common trade policy with respect tonon-members.Typically
thistakes the form of a common external tariff, whereby imports from non-membersare subject to the sametariff
when sold to any member country.Tariff revenues are then shared among members according to a prespecified
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formula.It is through this aspect of ASEAN membership, the adjustment of tariff rates toconform with AFTA
requirement, that Cambodia will likely enjoy the greatest longterm gain and the harshest short term pain.Trading
businesses and those importing raw materials from ASEAN nations will benefitgreatly.However, with the bulk of the
kingdom's tax revenue presently coming from customsduties and tariffs, other sources will have be developed to
allow the governmentto compensate for the resulting loss of income.

WHY IS ASEAN IMPORTANT?

ASEANs geostrategic importance stems from many factors, including the strategic location
of member countries, the large shares of global trade that pass through regional waters, and
the alliances and partnerships which the United States shares with ASEAN member
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countries. Recognizing its geostrategic importance, the US cooperates with ASEAN and its
member states on a multitude of intitatives ensuring security and stability in the region.

ASEAN COMMUNITY COUNCILS

1. The ASEAN Community Councils shall comprise the ASEAN Political-Security Community Council, ASEAN
Economic Community Council, and ASEAN Socio-Cultural Community Council.
2. Each ASEAN Community Council shall have under its purview the relevant ASEAN Sectoral Ministerial Bodies.
3. Each Member State shall designate its national representation for each ASEAN Community Council meeting.
4. In order to realise the objectives of each of the three pillars of the ASEAN Community, each ASEAN Community
Council shall:
(a) ensure the implementation of the relevant decisions of the ASEAN Summit;
(b) coordinate the work of the different sectors under its purview, and on issues which cut across the other
Community Councils; and
(c) submit reports and recommendations to the ASEAN
Summit on matters under its purview.

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5. Each ASEAN Community Council shall meet at least twice a year and shall be chaired by the appropriate Minister
from the Member State holding the ASEAN Chairmanship.
6. Each ASEAN Community Council shall be supported by the relevant senior officials.
ASEAN NATIONAL SECRETARIATS
Each ASEAN Member State shall establish an ASEAN National Secretariat which shall:
(a) serve as the national focal point;
(b) be the repository of information on all ASEAN matters at the national level;
(c) coordinate the implementation of ASEAN decisions at the national level;
(d) coordinate and support the national preparations of ASEAN meetings;

ASEAN Political-Security Community

The objectives of the ASEAN Political-Security Community (APSC) are to ensure that the peoples and Member
States of ASEAN live in peace with one another and with the world at large in a just, democratic and harmonious
environment. Activities in this community include cooperation on building norms of peace and security, strong
relationships with external partners, the promotion of political development in areas such as good governance and
human rights, as well as specific sectoral meetings on defence, law, and transnational crime. Traditionally the APSC
also includes the ASEAN Foreign Ministers, who serve core coordinating and decision-making functions in
ASEAN. As the first ministerial body created at ASEANs founding in 1967, the Foreign Ministers meeting
was termed the ASEAN Ministerial Meeting (AMM). In 2009 with the implementation of the ASEAN Charter, the
Foreign Ministers functions were separated into their roles as the ASEAN Foreign Ministers (which retains the
acronym AMM) and the ASEAN Coordinating Council.

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ASEAN Economic Community

The objective of the ASEAN Economic Community (AEC) is to transform ASEAN into a region with free
movement of goods, services, investment, skilled labour, and freer flow of capital. The AEC envisages
a single market and production base making ASEAN more dynamic and competitive with new mechanisms and
measures to strengthen the implementation of its existing economic initiatives; accelerating regional integration in
the priority sectors; facilitating movement of business persons, skilled labour and talents; and strengthening the
institutional mechanisms of ASEAN. Initiatives under the AEC include the ASEAN Free Trade Area, ASEAN
Investment Area, and sectoral cooperation in the specific areas of energy, finance, agriculture and forestry, minerals,
science and technology, telecommunications and IT, tourism, and transport.
Enabling economic development throughout ASEAN is also an important objective of the AEC. With the enlarged
membership of ASEAN came a new set of challenges. Cambodia, Laos, Myanmar and Vietnam were the last four
members to join and were acknowledged to have a significant development gap with the first six members.
Narrowing the Development Gap thus became an additional priority of ASEAN. Projects under the Initiative for
ASEAN Integration (IAI) are designed to enable new ASEAN members to accelerate the pace of economic growth,
and to enable them to participate on a similar level with the first six members.
ASEAN Socio-Cultural Community
The ASEAN Social-Cultural Community (ASCC) contributes to realising an ASEAN Community that is peoplecentred and socially responsible with a view to achieving enduring solidarity and unity among the nations and
peoples of ASEAN by forging a common identity and building a caring and sharing society which is inclusive and
harmonious where the well-being, livelihood, and welfare of the peoples are enhanced. Areas of cooperation in this
community include culture, arts and information, disaster management, education, environment, health, labour, rural
development and poverty eradication, social welfare and development, youth and civil service cooperation.

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External Relations
Another essential aspect of ASEANs activities today is the development of close partnerships with other countries.
The simultaneous engagement of many important countries with an interest in South East Asia forms part of
ASEANs strategy to remain in the drivers seat in regional developments ensuring that the region is stable and
prosperous, and free from domination by any single external power. The main instruments of ASEANs relations
with its partners are the promotion of norms of peace and conciliation, and the creation of a network of economic
agreements in the region.
Today, ASEAN has established official dialogue relations with ten external partners including Australia, Canada,
China, the European Union, India, Japan, Korea, New Zealand, Russia, and the USA. ASEAN also has relations
with the United Nations and a sectoral partnership with Pakistan. At the regional level, ASEAN is the driving force
for forums including the ASEAN Regional Forum, ASEAN+3 (with China, Japan and Korea) and the East Asia
Summit (with Australia, China, India, Japan, Korea and New Zealand).

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ASEAN INVESTMENT AREA (AIA) COUNCIL

The AIA Council is the Ministerial body under the ASEAN Economic Ministers responsible for overseeing the
implementation of the ASEAN Comprehensive Investment Agreement (ACIA), ASEANs main economic instrument
to realise a free and open investment regime. It is composed of Ministers from the ten Member States responsible for
investment and the Secretary-General of ASEAN.
The Coordinating Committee on Investment (CCI) composed of senior officials responsible for investment and other
officials from other government agencies supports the AIA Council in carrying out its functions.
Free Flow of Investment
A key element to establishing ASEAN as a single market and production base is having a free and open investment
regime where (a) non-discriminatory treatment is extended to ASEAN and ASEAN-based investors, save for limited
exceptions that are also due for progressive elimination; (b) rules and regulations are made transparent; and (c)
investors and their investments (i.e. covered investments) enjoy protection.
ASEAN is achieving these via the implementation of the ACIA, which took effect on 29 March 2012. The ACIA, as
one of the economic instruments for realising regional economic integration, aims to create a liberal, facilitative,
transparent and competitive investment environment in ASEAN.
Comprehensive in scope it covers investment liberalisation, protection, promotion and facilitation. At par with
international best practices it adopts a single negative list approach,

extends automatic most-favoured nation

treatment to all Member States, and carries a comprehensive and detailed investor-state dispute settlement
mechanism, among others. Forward looking, it prohibits performance requirements, and contains provision on
senior manager and board of directors (SMBD) to encourage inflow of key foreign managerial and senior
management personnel. Comprehensive and integrated in approach, it revised, merged and improved upon
the ASEAN Investment Guarantee Agreement (ASEAN IGA) and theFramework Agreement on ASEAN Investment
Area (AIA Framework Agreement) and provides a clearer interaction of provisions pertaining to investment
liberalisation and protection under a single investment agreement. ACIA supersedes these two precursor investment
agreements (issued in 1987 and 1998, respectively) including their subsequent amendments.
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ASEANs task now is to effectively implement the ACIA to ensure that the benefits from the Agreement are realised
with ASEAN and ASEAN-based foreign investors taking advantage of the opportunities that the ACIA provides.
ASEAN through the AIA Council and its subsidiary body (the CCI) has intensified its efforts to support the
implementation of the Agreement cognisant of the importance of the ACIA in keeping ASEANs competitive
strength vis--vis the changing economic landscape, and in achieving ASEANs economic integration goal. It has
given focus to: (a) completing the work pertaining to the build-in agenda items; (b) promoting the ACIA and
reaching out to businessmen and investors to create awareness about the benefits of ACIA; (c) enhancing the
capacity of ASEAN and its Member States in implementing the Agreement; and (d) developing a regional
cooperation work programme aimed at supporting the work of ASEAN on investment liberalization, protection,
promotion and facilitation.
Key Developments in the Implementation of ACIA

At the entry into force of the ACIA on 29 March 2012, ASEAN also issued the ACIA Scheduleor the Member
States Reservation Lists. The Lists contains measures that are maintained by Member States that do not conform to
the National Treatment and SMBD provisions of the Lists are required to be reduced or eliminated as prescribed in
the Agreement.
The AIA Council endorsed the Modality to Improve and Eliminate the Impediments to Investment, which sets
out the process in carrying out the task to progressively reduce and/or eliminate non-conforming measures in the
Lists.
A vital component of the Modality is the adoption of the ASEAN Investment Peer Review Process that
enhances the operation of the transparency provisions of the ACIA. The Peer Review Process requires the regular
reporting of any changes in the law, rules and regulations, policies and administrative guidelines that may
significantly affect investments or commitments of Member States under the Agreement. It also demands the
reporting of any international agreement that a Member States has entered into and grants preferential treatment.
Underway is the development of a mechanism by which changes or modification in the Schedule or
reservations of Member States could be effected.
ASEAN has implemented various activities to promote and create awareness on the new investment
agreement. It published an introductory booklet on ACIA in April 2012 and anACIA Guidebook for Businessmen
and Investors in March 2013. It also recently organized an ACIA Socialization Forum in cooperation with the
Malaysia Investment Development Authority in Kuala Lumpur.
To have a greater reach in the promotion of ASEAN as a single investment destination, ASEAN is also
developing an ASEAN investment website that will serve as ASEANs gateway for sharing information on investing
in the region, and as a window for investors to learn and know more about ASEAN, its opportunities and potentials.
ASEAN has stated a platform for strategic discussion among the Heads of the ASEAN Investment Promotion
Agencies on enhancing investment facilitation and promotion in ASEAN via the annual event The ASEAN
Investment Forum.

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THE ASEAN CHAPTER

The 2007 ASEAN Charter is a landmark constitutional document for ASEAN, reaffirming ASEANs status as an
intergovernmental organization, establishing its legal personality, codifying ASEANs purposes and principles, and
setting up an institutional framework to allow ASEAN to better coordinate its many areas of cooperation and operate
effectively in a rules-based system. ASEAN is distinct from other regional and international organizations in that
this basic document was created not upon its founding, but instead created only after forty years of confidencebuilding and cooperation, and signed at the associations 40th anniversary.
The ASEAN institutional system set out in the Charter incorporates key existing institutions, while creating new
structures which are being phased in to ASEANs operations. The key features are as follows:
The ASEAN Summit. The ASEAN Summit is the supreme policy making body of ASEAN. It has been convened
since 1976 and comprises the heads of government of the ten member states. As the highest level of authority in
ASEAN, the Summit sets the direction for ASEAN policies and objectives. Signing or endorsement of agreements,
and the issuance of declarations by the ASEAN Leaders at the Summit signify the highest level of commitment of
ASEAN member states. The Summit authorizes the establishment or dissolution of ASEAN sectoral bodies for
specific areas of cooperation. It also functions as final decision-making body in matters referred to it by ASEAN
ministerial bodies or the Secretary-General, and plays the role of an appellate body for disputes and cases of noncompliance that cannot be resolved by ASEANs dispute settlement mechanisms. Under the Charter, the Summit
meets twice a year.
ASEAN Ministerial Councils. The Charter established four important new Ministerial bodies to support the Summit.
They are the ASEAN Coordinating Council (ACC) which takes over the ASEAN Ministerial Meetings functions of
support for the ASEAN Summits meetings and to oversee overall implementation and coordination in the ASEAN
Community, the ASEAN Political-Security Community Council, ASEAN Economic Community Council,
and ASEAN Socio-Cultural Community Council to ensure coordination of the activities under each of the three
areas. Together, the Councils supervise the sectoral activities of ASEAN over 700 meetings each year in the
various sectoral areas of the ASEAN Community.
ASEAN Secretariat (ASEC). Administrative support for ASEANs official activities is provided by the ASEAN
Secretariat, which was established in 1976. ASEC is headed by the ASEAN Secretary-General, staffed by nationals
from ASEAN member states and located in Jakarta. ASEC is also responsible for monitoring implementation of
ASEAN commitments and maintaining the organisations official records.
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Committee of Permanent Representatives (CPR). For the day-to-day working level coordination of ASEAN
activities, the Charter established a Committee of Permanent Representatives (CPR) in Jakarta, comprising
ambassadorial-level representatives from the member states. The CPR will take over the work of the ASEAN
Standing Committee, which was established in 1967 to perform the coordinating role for ASEAN.
Dispute Settlement. The Charter calls for the resolution of disputes between ASEAN members in a peaceful and
timely manner through dialogue, consultation and negotiation, in which the Chairman of ASEAN or the SecretaryGeneral may be called upon to offer their good offices, conciliation or mediation. The Charter further mandates
dispute settlement mechanisms for all fields of ASEAN cooperation. Whereas the economic community is covered
by the 2004 ASEAN Protocol on Enhanced Dispute Settlement Mechanism, the other two communities will be
addressed through new dispute settlement institutions currently under negotiation. Unresolved disputes and non
compliance with the findings of dispute settlement mechanisms are to be referred to the ASEAN Summit. For further
information please see CILs resource page on dispute settlement in ASEAN.
Decision Making. The primary mode of decision-making in ASEAN is consultation and consensus, a tradition that
ensures that ASEAN initiatives have the full support of its members and that no member state will feel discriminated
against. However, the Charter enshrines the principle of ASEAN-X in implementation. This means that if all
member states are in agreement, a formula for flexible participation may be used so that the members who are ready
may go ahead while members who need more time for implementation may apply a flexible timeline. In cases where
consensus cannot be reached, the Charter provides for the ASEAN Summit to decide on an alternative method of
decision-making.
Human Rights. Article 14 of the ASEAN Charter called for the establishment of an ASEAN Human Rights Body.
Accordingly, ASEAN officials completed negotiations on the Terms of reference for the ASEAN Inter-governmental
Commission on Human Rights (AICHR), which was established at the 15th ASEAN Summit in October 2009. The
AICHR can be seen as a culmination of discussions on the establishment of a human rights mechanism in ASEAN
that began at the ASEAN Ministerial Meeting in 1993 and continued with the work of the ASEAN Working Group
for a Human Rights Mechanism. For further information please see CILs resource page on human rights in ASEAN.
ASEAN Integration 2015
Initially launched in the 4th ASEAN Summit held in Singapore in November 2000 as an "Initiative for ASEAN
Integration" (IAI) by then Prime Minister Goh Chok Tong which created a framework for human resource
development programs and the integration of the new member States - Vietnam, Lao PDR, Myanmar and Cambodia.

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The IAI has set-up four human resource development training centers in the new member States and by 2002 there
were more than 10,000 participants in the program in various fields such as English Language, Information and
Communication Technology, Trade and Tourism.
During the 12th ASEAN summit held in Cebu, Philippines in 1215 January 2007, the member States signed the 5
agreements aimed in further strengthening the integration of ASEAN and further enhancing political, economic and
social cooperation in the region.
Among those issues drafted in the agreement includes the "Cebu Declaration on the Acceleration of the
Establishment of an ASEAN Community by 2015."
On the 13th ASEAN Summit in Singapore, from 1822 November 2007 with the theme "One ASEAN at the Heart of
Dynamic Asia" leaders of the member States endorsed the ASEAN Economic Community Blueprint on a plan to
establish a single market and production base in the ASEAN region by 2015.
ASEAN Economic Community Blueprint[edit]
The ASEAN Leaders adopted the ASEAN Economic Blueprint at the 13th ASEAN Summit on 20 November 2007 in
Singapore to serve as a coherent master plan guiding the establishment of the ASEAN Economic Community 2015

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One Market Economy

The ASEAN Integration 2015 will see member-nations converge with one market economy, where trade is done with
less restrictions (like no tariffs). The business playing field is flowing with goods (raw materials and products) and
services (manpower). Nationalities are given a wide array of product choices which range from low end to high end.
The integration encourages competition (showcasing the best) and complementarity (providing unique products).
Member-nations will place the right infrastructure to keep up with the fast changing ASEAN economic landscape. It
also poses challenges, especially to member-nations like the Philippines whose economy is starting to boom.
Journalist-businessman Wilson Lee Flores in his column titled Bull Market, Bull Sheet interviewed tycoons and
identified different challenges that ASEAN businessmen face. They are the challenge of size or scale (family
businesses can survive or flourish by becoming big or remaining small); the challenge of competitive spirit (market
players should work harder); the challenge of speed (increase in transactions and productivity and developing new
ideas); the challenge of efficiency (investment in technology and human resources); and the challenge of having a
global mindset (thinking the international way).
Manila Bulletin writer Reynaldo Lugtu Jr. in his article titled ASEAN 2015 challenges and opportunities adds
Entry of imported products and The challenge to innovate as the other challenges entrepreneurs in the region
will face when the integration is fully implemented next year. The former will see local manufacturers compete in the
market share, where cheaper and competitive products are made available. On the other hand, the latter will see
companies invest in research and development, market research, and new technologies of production. This is
inevitable and expected since the business sector needs to deliver goods to consumers in a faster way (The challenge
of speed). As Lugtu Jr. shares the ASEAN single market comprises 600 million consumers and with $1.9 trillion in
combined Gross Domestic Product (GDP). On top of these challenges, he sees opportunities such as Access to a
bigger market, and Supply of human capital, where member-nations with large population, like the Philippines
whose population is now at 100 million and most members of workforce speak English, can take advantage.
The report written by Mia Aznar further discusses the challenges the Philippines will encounter when the integration
takes place in 2015. According to Mias interview with Philippine Stock Exchange president and CEO Hans Sicat,
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ASEAN only constitutes (the) 17 percent share of (the Philippines) exports as compared to East Asia with 50.1
percent export share. It is a question whether the integration will become beneficial to the country? China, Hong
Kong, Japan, Macau, Mongolia, North and South Korea and Taiwan compose the East Asia group. Other points
raised by Sicat in the article titled Asean integration in 2015 will be challenge for PH: PSE president are
Philippines has a small economy, its citizens have a low awareness about the integration initiative, it has limited
products and a small investor base. Sicat also offers solutions to lessen the challenges that lie ahead. These include
having political will, implementing arrangements, coordinating and mobilizing resources, capacity building,
strengthening institutions and consulting with public and private sectors.
Lessening the vulnerabilities of Phl to foreign competition and exposure to market risks is also the concern of
Rafael Alunan III in his article 2015: Asean Integration, ready or not?. The sectors which will be affected are the
agribusiness and manufacturing industries. This is extra challenging to the agricultural industry which has to work
double time in achieving its self-sufficiency status and surplus growth for export. Like Sicat, Alunan III also shares
his two cents on making these identified sectors ready for the Asean integration in 2015. The author shares that by
providing adequate incentives, critical infrastructures and universal access to know-how capital and addressing
high business costs, low import duties and extensive technical smuggling the agribusiness and manufacturing
sectors, respectively, will improve. The present manufacturing industry should be developed into an industry capable
of producing dual purpose factories producing for the domestic and export markets, supported by vital infra and
systems, to spur industrialization. It is also implied that the Phls defense should be built up to its minimum desired
level to make the economy more competitive.

The Future of ASEAN

ASEAN is widely recognized in the international community as an exemplar of enlightened and successful
regionalism. But what precisely constitutes the nature and measure of its achievements?
In the first place, it is remarkable enough that ASEAN has survived for all of three decades, considering that at the
time of its birth, not a few political observers had predicted that, like its predecessors - the SEATO, the Association
of Southeast Asia (ASA) and the Maphilindo - it would soon wither in the blast of the complex and unpredictable
regional situation. As Indonesian Foreign Minister Ali Alatas recalls, "When ASEAN was born, there were a good
number of skeptics who would not believe that, given the wide divergences of view among the ASEAN countries,
the differences in the political and economic systems of its founding members, it would ever succeed in this
endeavor at regional cooperation. Well, ASEAN proved all its critics wrong and it is now a vibrant reality, an

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Association recognized not only in its own region but also in the world at large as one of the most successful regional
cooperative schemes".
The recollection of the Foreign Minister of Singapore, Professor S. Jayakumar is that when ASEAN was founded,
the situation in Southeast Asia was so grim the mass media kept comparing it with the European region that would
eventually hand down the horrible legacy of "ethnic cleansing"-the Balkans. "The media described us as dominoes
about to fall at any time," he says. "Indeed, there was no optimism on the future of the countries of Southeast Asia.
But now, 30 years later, the situation is very different. The countries in Southeast Asia now constitute one of the most
peaceful, stable and prosperous regions in the world. I don't think this would have been possible if it were not for
ASEAN".
Former ASEAN Secretary General, Narciso G. Reyes, once suggested that in order to measure ASEAN's worth, one
should ask what could have happened to Southeast Asia without ASEAN. "Southeast Asia minus ASEAN," he said,
"equals greater political instability, more widespread economic deterioration and, almost surely, the ascendancy of
expansionist forces that thrive on the weakness, isolation and disunity of others." He said this in 1981 when ASEAN
was proving to be a bulwark of political cohesion and solidarity in the face of the situation in Indochina and he was
then anticipating only that the ASEAN countries would show excellent economic performance during the rest of the
decade. Optimistic as he was, it was beyond his expectations that the ASEAN countries would prove to be among the
world's most dynamic economies going into the 21st century.
And even today, ASEAN's political achievement tends to be cited more spiritedly than its considerable role in the
economic development of its members. Says Philippine Foreign Secretary Domingo L. Siazon Jr : "ASEAN has
transformed itself from a small subregional organization into a major influence in world affairs. During the last 30
years, ASEAN has been able to maintain peace and stability among its Member Countries despite the many territorial
problems and other issues among them. ASEAN today is the only subregional organization in Asia that provides a
political forum where Asian countries and the world Powers can discuss and consider problems related to security,
political issues and military concerns".
The relative peace, security and stability that ASEAN has helped achieve and maintain in Southeast Asia as well as
in the entire Asia-Pacific has been good for business. It created a favorable environment where rapid and sustained
economic growth became possible. Economic development, in turn, brought about social progress and human
development.
Just how was ASEAN able to achieve its phenomenal success? Malaysian Foreign Minister Abdullah Haji Ahmad
Badawi explains it convincingly. "ASEAN has been successful," he says, "because there is a very strong
commitment among ASEAN members to cooperation. Cooperation for the benefit of all and cooperation for stability
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and peace of the region. This is a very important hallmark of ASEAN (Second), there is also a very strong
commitment to pragmatism. ASEAN has been pragmatic in ways that develop cooperation among the members in
undertaking various projects. And ideology has never been a problem to ASEAN. Ideological differences have never
interfered in efforts to cooperate positively for the common good of all and for regional prosperity. And, third, I think
the ASEAN Leaders and Ministers are never tired of seeking consensus. We work hard, we work with full
commitment to seek consensus on any particular issue, on any particular program we wish to develop and when we
do this, we are very very aware of one another's sensitivity."
ASEAN has acknowledged that periods of rapid social and economic progress are often accompanied by
fundamental shifts in power relations among States. If not managed well, such realignments can lead to conflict. At
the same time, increased economic globalization, accompanied by structural adjustments of national economies, can
create challenges to social order. With its rapid economic development, ASEAN also faces some issues related to
resource conservation including environmental protection. Greater mobility of people, goods and capital also
demands sophisticated border security measures and closer collaboration among States. All these concerns ASEAN
must continue to address. It helps that the nations of the Asia-Pacific delight in their prosperity and realize that
tensions and armed conflict make bad economics. It helps that ASEAN, the Asia-Pacific Economic Cooperation
(APEC) and the recently established Asia-Europe Meeting (ASEM) processes are effectively promoting a more
constructive and cooperative approach to international relations in this part of the world.
The establishment of the ASEAN Regional Forum (ARF) also represents a breakthrough in the history of the region
and, as stated in the Chairman's Statement of the ARF's inaugural meeting in 1994, "signified the opening of a new
chapter of peace, stability and cooperation for Southeast Asia".
The expansion of ASEAN "shall pave the way for a new synergy, maximizing the cooperation potential for growth of
the entire region", Vietnam's Foreign Minister Nguyen Manh Cam envisions. He expresses caution, however, that "In
the face of a greater ASEAN which comprises countries at different levels of economic and technological
development and with different cultures and historical backgrounds, there emerges a need on how to keep those
differences from slowing down the ASEAN growth pace and concurrently from creating difficulties for those
countries of lower levels of development."
The virtual realization of the vision of the Founding Fathers of ASEAN to have an association of all Southeast Asian
countries is by no means the end of ASEAN history. It is a call for a renewed commitment towards broader regional
solidarity among the peoples of Southeast Asia. As Foreign Minister Prachuab Chaiyasan of Thailand stated: "As we
move towards the year 2020, ASEAN will have derived its strength not only from unity among governments but
unity among its diverse peoples. The ASEAN experience and the ASEAN process must reach out to all spectrum of
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our societies. Through ASEAN, this region will become a grassroot- supported and close-knit community bound
together not only by common interests, but by shared values, identity and aspirations among our peoples."
ASEAN faces the future with confidence. Its strong foundation and remarkable achievements will serve ASEAN
well as it pursues higher goals at the dawn of the new millennium. The ASEAN Heads of Government have
reaffirmed succinctly that Cooperative peace and shared prosperity shall be the fundamental goals of ASEAN.
Towards these goals, ASEAN shall remain a driving force in building a more predictable and constructive pattern of
relationships among nations in the Asia-Pacific region to ensure lasting peace and security. Economically, ASEAN
shall move towards greater economic integration with emphasis on sustainable and equitable growth. Finally,
ASEAN shall nourish a caring and cohesive ASEAN community, whose strength lies in fostering a common regional
identity and a shared vision for the future.

CONCLUSION
The dynamism of the ASEAN region has been inextricably intertwined with the appearance of theeconomic rise of
East Asia at a time during the early 1980s when the world's economic activitydeclined. While the United States and
EC-12 experienced a protracted recession, Japan continued itsexpansion at a lower rate of growth.Japan has become
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the locomotive for the East Asian region as a source of investment, trade anddevelopment aid, especially in the NIEs,
China and ASEAN. Japan and the NIEs faced similarchallenges, such as: world economic recession, currency
appreciation, increasing wages andprotectionism, resulting in the movement of some industrial sectors to
neighbouring countries in orderto maintain competitive advantages.15In the face of such challenges, ASEAN
countries launched measures of deregulation and restructuringboth at the national and regional level. As a whole,
ASEAN countries experienced large inward FDIflows, especially from Japan and the NIEs, except for the
Philippines where most FDI originated fromthe United States. These flows have strengthened ASEAN's exports.
ASEAN exports however, weremuch higher to extraregional than to intraregional markets. Nevertheless, little
progress both in tradeand investment was achieved. And yet ASEAN is the most successful subregional cooperation
group in the Asian Pacific region. The Association has been successful in speaking in one voice on
majorinternational trade and economic issues. It presented a joint stand at the Uruguay Round ofmultilateral trade
negotiations to improve world trade and worked out trade benefits jointly with EC-12,Japan and other major trading
partners.According to many predictions, ASEAN will keep its dynamism during the 1990s.While ASEAN'sbooming
economies might be confronted with changing internal and external conditions, like Japanand the NIEs during 1980s,
the New Indochina (Viet Nam, Laos and Cambodia) looks an attractivedestination for future ASEAN investment and
trade. With their new free-market economic system,liberalised foreign investment laws and more open borders, the
countries of Indochina more and more serve as production bases for a host of industries, from garment-making to
assembly of the basic electronics.

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