ASEAN Economic Community: Facilitating Exploitation

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As rising wages force China to shift from low-cost manufacturing, Southeast Asia is emerging as a center of production in the global supply chain. In 2007, to create a more competitive unit of production, Southeast Asian countries signed the ASEAN Economic Community Blueprint 2015 which deregulates, removes tariff and non-tariff barriers, and allows the free flow of capital in the region. 8 years later, the AEC managed to complete 93% of its high priority measures. This June, it announced its post 2015 plan – the ASEAN Economic Community Blueprint 2025 (AEC) – which will be finalized at the end of the year and will allow even freer flow of capital, goods, services and deregulation. Not only does it fail to include concrete provisions that help local economies, but it is also being drafted in consultation with corporations but not with the public or civil society.

Unlike previous Third World political alliances such as the Non-Aligned Movement, the purpose of the ASEAN Economic Community is not harnessing the collective power of weaker states in confronting larger ones. Rather, it is “to better serve” them.[i] That’s because ASEAN does not act as a bloc in multilateral agreements such as the WTO or the Climate Change negotiations or on security issues such as the South China Seas. Instead, its integration turns the region into a single production market to facilitate the exploitation of its natural resources and labor by foreign direct investment. In the process, it perpetuates ASEAN’s great dependence on foreign direct investment (FDI) and exports for its development.[ii] Thus, in addition to removing intra-ASEAN tariffs, its policies also incorporate many of the elements in the Trans Pacific Partnership Agreement such as investor state dispute settlement system (ISDS), freer capital mobility, and regulatory coherence. This corporate-centered development is reflected in ASEAN’s close consultation with business but not with civil society.

In response, in 2005, civil society across the region came together in the ASEAN People’s Forum: a parallel event where the region’s civil society gather, discuss, and draft submissions on regional integration to the ASEAN. Their vision is people centered and ecologically sustainable protecting people’s economies, the environment, and upholding human and labor rights. Just like new pro-corporate regional rules and regulations can be created to influence and intervene in national ones, so can regional regulations that protect small and medium enterprises, migrant workers, labor unions, and farmers, and provide minimum wages and working conditions. ASEAN’s civil society is not yet unified in a single vision of regional integration. They are, however, unified in their demand of greater participation by the public and civil society.[iii] Despite their various submissions starting 2005, the ASEAN has yet to adopt any of them.

As the global economy’s center of gravity shifts from the north to the south, Southeast Asia is projected to be one of its centers of production. Given such position in the global supply chain, what happens in Southeast Asia will not simply affect its people, but also the world’s workers, farmers, and fisher people. In addition, as developed countries further shift their environmentally greenhouse gas intensive sectors into developing countries, the centers of global production, such as the ASEAN region, will play an important role in global greenhouse gas emissions. The regional elites and their governments continue to value profits over the environment and people’s needs. Thus, it is left to civil society such as the ASEAN People’s Forum to build a regional movement to disrupt this corporate centered, profit driven regional integration and push to regulate environmental destruction, demand greater rights for migrant workers, fight for minimum wages, and human rights.

written by Dae-Han Song (chief editor, World Current Report)

[i] From interview with Rachmi Hertanti of Indonesians for Global Justice

[ii] 75% of ASEAN trade is extra-ASEAN.

[iii] From interview with Rachmi Hertanti of Indonesians for Global Justice