Comment on “ASEAN Economic Integration: Addressing Challenges and Embracing Opportunities”

Abstract

Park (2024) is an accessible overview of the current state of ASEAN, focusing on issues relating to trade integration and the role of regional and global value chains, with particular attention paid to the role of China.

The original ASEAN-5 (Singapore, Malaysia, Thailand, Indonesia, and the Philippines) constituted the second wave of Asian reforming economies, following in the wake of Taiwan and South Korea. Eventually they were joined by oil exporter Brunei, and four lower income economies, Vietnam, Laos, Cambodia, and Myanmar, forming the current ASEAN membership.

The ASEAN economies have generally performed well relative to comparators globally. They have benefitted from technological and policy advances which have supported the rise of cross-border value chains and their proximity to China, which has emerged as a hub. Since 1995, there is clear evidence of convergence in per capita across the membership, though it unclear to what this reflects a simple catch-up process stimulated by domestic policy reforms, and to what extent it can be ascribed to membership in ASEAN per se.

Whatever the impetus, Park documents a clear deepening of regional integration, much of it associated with regional supply chains linked to China. The electronics and automotive sectors have been prominent in this process. ASEAN will presumably remain important in automobiles and parts, through the shift to electric vehicles, which use fewer parts than conventional internal combustion vehicles, will imply a restructuring and possibly a diminution of cross-border exchange. Similarly, increasing industrial policy interventions by the United States, European Union, Japan, and others will affect the structure of the semiconductor industry and electronics more broadly. Moving forward, these regional supply chain networks will be affected by both China's policies and that country's role in the global economy.

Park's (2024) concluding section describes some of the policy agenda that ASEAN faces, some of its successes, and some successes that have yet to be realized. Implicit is the basic challenge that the group has faced from the start: how far can a diverse organization go in addressing collective action problems with a model based on consensus with little formal structure? Park observes that “enforcing AEC commitments among the member state should be the region's top priority,” but does not address how that might be done.

For example, can ASEAN form a coherent regional response to global warming, arguably the existential issue of our time? ASEAN has deliberately eschewed the legal-bureaucratic model of the European Union, but one wonders if at some point, more binding obligations and enforcement mechanisms are necessary. Is this model adequate for the future? If not, how does ASEAN build adequate institutions? Given the membership's diversity, what role is there for multi-speed commitments (and potentially enforcement allowances) or special and differential treatment?

One way to think about this conundrum would be to separate out policy reforms that can be formulated and implemented at the national level and those that truly require regional commitment. My guess is that much of the policy reform agenda can be implemented without regional cooperation. What are the critical issues for which regional commitments are key?

Even as it turns out that much of the agenda can be implemented unilaterally, that does not mean that ASEAN does not have a role to play. Demonstration effects matter. When Singapore began wide-ranging reforms in the late 1960s, it was after observing the impact of similar reforms in Taiwan and South Korea. Singapore's subsequent experience became a model for reforms undertaken in the other ASEAN-5 economies. Likewise, their experiences became the beacon for would-be reformers in the poorer countries of Indochina.

Park mentions an array of ASEAN initiatives across a variety of policy issues. Even if these specific plans are not particularly efficacious, the simple exposure of national level policymakers and politicians to what their counterparts elsewhere are doing could have great impact. In that sense, parsing the relative impact of national level reforms and regional commitments may be both difficult, and ultimately, inconsequential.