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There have been increasing and stronger calls for greater integration of many Asian economies, either within the confines of ASEAN or on a more geo-economically strategic scale that would include major Asian jurisdictions like China, Japan, and Korea. A number of key personalities within the regional legal fraternity have advanced views that such integration ought to occur through the harmonization of legal rules, arguing amongst others that in so doing uncertainty and other transaction costs would be reduced and commercial confidence within the region concomitantly increased. That commercial law has come under the lens as a particularly suitable candidate for harmonization is, in a sense, unsurprising. It is for one ostensibly seen as a technical and relatively uncontroversial area of law, as opposed, for instance, to public law. For another, or probably for that precise reason, this area has been the historical choice for attempts at harmonizing substantive law – think of the CISG, the UCC in the United States or the recently proposed CESL in the European Union. This edited volume brings together eminent and promising scholars and practitioners to investigate what convergence and divergence means in their respective fields and for Asia.
There have been an increasing need for greater integration of many Asian economies, either within the confines of ASEAN or on a more geo-economically strategic scale including major Asian jurisdictions like China, Japan, and Korea. A number of key personalities within the regional legal fraternity have advanced views that such integration ought to occur through the harmonization of legal rules, arguing that in doing so, uncertainty and other transaction costs would be reduced and commercial confidence within the region concomitantly increased. This edited volume brings together eminent and promising scholars and practitioners to investigate what convergence and divergence means in their respective fields and for Asia. Interwoven in the details of each tale of convergence is whether and how convergence ought to take place, and in so choosing, what are the attendant consequences for that choice.
Haze has been a serious transboundary problem in Southeast Asia for decades. Originating largely from fires in Indonesia, the smoke travels across borders, affecting up to six Southeast Asian states almost annually. Haze contains fine particles which irritate the eyes and penetrate the lungs. As a result, scores of Indonesians, Malaysians, and Singaporeans suffer from respiratory, dermatological, and ophthalmological problems. These health risks, together with reduced visibility, have also caused tourist numbers to drop dramatically. This chapter observes that governments worked hard to protect and maintain their tourism sectors in the face of the haze. The main tactic used was to underrepresent the health risks of haze, both to citizens and tourists. As a result, regional governments largely failed to recognize the haze as a serious public health issue. At the national level, states often under-report health effects in the attempt to keep tourism levels stable. At the regional level, member states have yet to agree on a common ASEAN-wide regional air quality measurement system, with many continuing to use a system that tends to underrepresent health risks. At the international level, affected states have been quick to debunk research that indicates higher levels of mortality. As a result, citizens lack the awareness and sense of urgency to make wise health and well-being decisions during haze episodes. Sustainable development involves economic growth balanced with social development and environmental sustainability. However, the case of the haze shows that Southeast Asian states still find it challenging to balance these elements in the spirit of sustainable development.
This chapter considers how Indonesia's policies in relation to investment treaty drafting have changed over time and the extent to which these changes may have been driven by concerns to protect regulatory space. Despite having signed a relatively large number of treaties relative to other Asian States and being an important destination for foreign direct investment, Indonesia has faced few claims and has never been ordered to compensate an investor for violations of an investment treaty. It is also observed that the volume of laws and regulations on the books in Indonesia has increased dramatically since the beginning of the new millennium, with little evidence that the threat of investment treaty claims has affected the extraordinary growth of legislation and regulation comprising Indonesia's "legal jungle". Indonesia has nevertheless sought to modernise its investment treaties, including to add provisions clarifying or limiting the scope of the fair and equitable treatment standard and the circumstances in which a regulatory measure may amount to indirect expropriation. The chapter also briefly considers what Indonesia's treaty practice reveals about its position in relation to reform of Investor-State Dispute Settlement, including its efforts to promote the use of conciliation.
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Part IV
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Multilateral Rule-Making in Asia on Trade and Investment: From ASEAN to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership
This chapter charts developments in Southeast Asia concerning regional economic integration through the conclusion of plurilateral trade and investment agreements. It examines the early steps towards achieving economic integration, including the creation of the Association of Southeast Asian Nations (“ASEAN”) in 1967, and the progressive steps that Southeast Asian States have taken to liberalise their economic and investment policies through the ASEAN framework. It then considers various recent and ongoing developments in regional economic integration, including the negotiation of the Trans-Pacific Partnership Agreement and its revival as the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, the creation of the ASEAN Economic Community, and the ongoing negotiation of the Regional Comprehensive Partnership Agreement. It concludes with the observation that many innovations in the negotiation of IIAs are emerging from the practice of ASEAN and other Asian States which are having broader implications on the field of international investment law.
Although the substantive content of international investment law has traditionally been shaped by the capital-exporting States of Western Europe and North America, this dynamic has been gradually changing, with Asia and Asian States increasing in the prominence of their roles. Asia has become a global growth engine in recent years, and Asia has become a focal point in rule-making in international investment law. This is evidenced by the number of mega-regional and investment agreements which have been concluded in recent years which have Asia as their centre of gravity, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership Agreement, which have built on the ASEAN Comprehensive Investment Agreement. To this can be added the practice of individual States, such as Singapore and Vietnam, in negotiating investment protection agreements with the EU, as well as the Singapore Convention on International Settlement Agreements Resulting from Mediation which placed Asia at the centre of developments in international commercial law. This chapter surveys the rich terrain of State practice in international investment law, and introduces the various chapters of this edited collection, which illustrate the Asian Turn in Foreign Investment.
The Covid-19 pandemic triggered the first global public health emergency since 1918, the greatest economic crisis since the Great Depression, and the greatest geopolitical tensions in decades. Global governance mechanisms failed. Yet, East Asian countries (with caveats) managed to control Covid-19 better than most other countries and to increase their cooperation toward economic integration, despite their position on the security frontline. What explains this East Asian Covid paradox in a region devoid of strong regional institutions? This Element argues that high levels of institutional preparation, social cohesion, and global strategic reinforcement in a context of situational convergence explain the results. It relies on high-level interviews and case studies across the region.
The contest to determine exactly what ‘protection’ entailed continued in two phases as they set up a human rights body (the ASEAN Intergovernmental Commission on Human Rights, AICHR) and a human rights declaration. In the most contested phase of defining what human rights protection meant in ASEAN, only a compromise that satisfied neither norm circle was possible. Neither circle could sufficiently wield their diplomatic competencies to influence the results decisively, with the failure to reach consensus looming over both circles. This was reflected in the existence of political declarations alongside the formal terms of reference and human rights declaration that sought to safeguard the compromises within each document.
Having rebuffed Western pressure throughout the 1990s on human rights norms, ASEAN was under little external pressure to enact stronger protections in its 2007 charter whose main impetus was accelerating economic integration to ward off growing rival blocs and the emergence of China. Yet it did so anyway, as liberal and authoritarian norm circles clashed and the liberal circle tipped the scales just enough to ensure its inclusion in the charter. While they could not control the initiative alone, shared norms and metis sufficed to bring an ambiguous commitment across the line.
In this chapter, we examine the links between peaceful borders among the Southeast Asian countries and the occurrence and proliferation of illicit transnational flows, especially with regard to drug trafficking, human trafficking and smuggling, and arms trafficking. Southeast Asia is the most stable and peaceful among the Asian regions. Regional peace in the Southeast Asian region, especially after 1991, has contributed to its phenomenal economic growth and development, which, in turn, has led to higher levels of integration. At the same time, expanding economic and infrastructure links around region have also facilitated the occurrence of illicit transnational flows, including transnational organized crime and terrorism. The issue of transnational crime addresses the question of national sovereignty. On the one hand, illicit transnational flows pose a threat to the national sovereignty and the territorial integrity of independent states. On the other hand, effective cooperation in combating transnational crime and terrorism requires a political decision by national governments to surrender some parts and pieces of their sovereignty. In this sense, the Southeast Asian countries have traditionally been strong defenders of the sanctity of national sovereignty and nonintervention.
After eight years of effort, the 15 Asian members involved in the Regional Comprehensive Economic Partnership (RCEP) met in a virtual ceremony to sign the final document on Sunday, 15 November 2020. The final deal matches the original objective – to knit the region together and allow firms to build supply chains across the region to deliver goods, services, and investment to Asian markets more seamlessly. Getting this free trade agreement (FTA) to this point involved repeated missed deadlines, the loss of one important negotiating partner, and thousands of miles of travel for a rotating cast of officials, trade ministers, and leaders. RCEP began in late 2012 as an effort to unravel what has often been called the ‘spaghetti or noodle bowl’ of overlapping and inconsistent rules that can impede trade. While most of the countries in the region have extensive experience in trade and are outward oriented, trade in Asia has been bedeviled with challenges. This includes a range of both tariff and non-tariff obstacles that have made it more difficult than might be expected to trade, especially for final products, within the region.
This chapter provides an introduction to preferential trade agreements or regional trade agreements. It considers trade creation and trade diversion within a supply and demand framework of PTAs. It then summarizes the examples of the European Union, NAFTA, Mercosur, ASEAN and its AFTA, and the Trans-Pacific Partnership.
Forming a line of linkage and transition between national orders and the international order, regional structures influence, and are influenced by, these orders. Regional structures that accommodate sub-components of geopolitical, geo-economic and geo-cultural lines are sometimes unifying, sometimes divisive, but always dynamic in terms of their order-forming mission. While this dynamism plays a seminal role in the formation of order when appraised with an inclusive approach, it can also lay the ground for regional chaos in conditions of exclusionary polarization.
The seventh chapter of the book discusses the possibility and conditions of an inclusive regional governance under the light of lessons from recent regional initiatives of Turkey (Platform for Neighbors of Iraq, Syria-Israeli Peace talks and Tehran Agreement) and recommends the following principles of stability: shared destiny/common security, high level political dialogue, economic interdependence and cultural pluralism and co-existence.
Pan-Americanism’s promotion of liberal internationalism and pan-Africanism’s appeals to transnational solidarity among African people(s) provided useful frames for critics of non-interference to make it the subject of debate. I argue that the content and political salience of pan-Americanism & pan-Africanism empowered – or even inspired – critics of non-interference in these regions. In this chapter I offer a long-term account of the (uneven) erosion of non-interference at the regional level in the global South, an account centering on the contestedness of this norm within the OAS and OAU compared to ASEAN during the Cold War period. This contestation (at the level of discourse) contributed over time to norm erosion (at the level of law and practice). Pan-Asianism did not serve the same function. Since non-interference was less contested in Southeast Asia (and not on these grounds), it was therefore more robust or resilient over time. Because of the history of norm contestation and erosion, the three regional groupings arrived at the 1980s with different normative priors. This meant that Latin America and Africa were more amenable to the intrusive regionalism trend than was Southeast Asia.
Because of variation in the discursive foundations of regionalism and in the degree and nature of norm contestation and erosion, Latin America, Africa, and Southeast Asia arrived at the end of the Cold War with different normative priors. These normative priors interacted with other key variables during the second wave of regionalism, one of which is regime type. Democratization in Latin America during the 1980s was extensive, and, by the end of this decade, the region boasted a high “density” of democracy. The achievement of this critical mass of democracies contributed to the renewal of the development of intrusive regionalism (especially aimed at democracy promotion) in the region. Neither Africa nor Southeast Asia has achieved this density. Although average democracy scores in these other regions have been on the rise in the last twenty years, they remain in the “anocracy” range. Even though high democratic density was not achieved in these two regions, though, individual states democratized, and emerging democracies with regional leadership aspirations, like South Africa and Indonesia, have been at the forefront of regional reform campaigns.
This conclusion both briefly revisits the causal arguments that make up the book’s general(izable) framework and highlights the role of idiosyncrasy, contingency, and agency in the divergent normative trajectories of regional societies of Latin America, Africa, and Southeast Asia. It then considers the applicability of the book’s theory to a new case – the “Arab” region (defined by membership in the League of Arab States).The last section of the chapter discusses the status of sovereignty in the South today; challenges for intrusive regionalism moving forward; and the normative implications of non-interference and its institutionalized violations.
This chapter examines Third World regional organizations’ discursive foundations, focusing on macronationalism as a movement and discourse, and tracing the development of the OAS, the OAU, and ASEAN. Decolonization produced sovereignty-sensitive states. It also, in some cases, produced regional international societies founded on macronational ideologies, like pan-Americanism and pan-Africanism. And because macronationalism appeals to values and solidarities that transcend the nation state, it holds the potential to challenge strict sovereignty norms. In Latin America and Africa, the establishment of regional organizations in some ways culminated pan-American and pan-African movements, but the formation of ASEAN did not culminate pan-Asianism – the latter had long lost favor in the wider region due to its cooptation by imperial Japan. ASEAN’s discursive foundations served more to reinforce strict sovereignty norms – in the long run – than to create openings for contestation of them. Non-interference did not have to compete with transnational pan-Asian discourses or liberal ideas about human rights and democracy that were more prominent in the African and Latin American cases.
This chapter addresses a puzzle set up in Chapter 5: Why did Africa become so much more intrusive than Southeast Asia in the post–Cold War period, given that neither region experienced widespread democratization? A partial explanation for this variation in outcomes is that Africa’s normative priors were different – by the time these regions arrived at the 1980s, the norm of non-interference had already eroded to a greater extent in Africa than Southeast Asia. In this chapter, I make the case for another more proximate factor – economic performance. Poor economic performance renders states materially and socially vulnerable and creates legitimacy deficits, and these vulnerabilities make states more open to normative and institutional reform. In Africa, reform took the form of more intrusive regional norms and institutions. Southeast Asia’s stellar economic performance prior to the 1997 financial crisis served to reaffirm and reinforce its norm set – including non-interference. The crisis prompted some reform (and some erosion of non-interference) but not to the same degree as in Africa.
This chapter takes a regionalist perspective in exploring ways ASEAN can protect and advance consumer interests regarding consumer finance. Presently, ASEAN, as an organisation, is paying relatively little attention to the opportunities and challenges presented. The chapter explores some of the ‘traditional’ issues arising at the domestic level, including lenders: charging excessive interest rates; misleading and deceiving consumers; and harassing them or engaging in illegal activity when recovering loan repayments. Emerging issues include the rise of fintech. It offers new opportunities for financial inclusion, but also presents new challenges due to the rise of non-financial institution lenders, including those operating online platforms. Lack of proper regulation of these lenders risks regional financial instability and the exploitation of low-income consumers. Given the pace and complexity of change and the increasingly borderless nature of fintech, a regional approach could best assist with developing appropriate responses. The chapter proposes that enhanced shared knowledge and more effective networking amongst key players within ASEAN would advantage the region as a whole.
What is ‘ASEAN’ exactly? Is it a collective noun for describing ten states in Southeast Asia, or is ASEAN something more than that – and if so, what? These deceptively simple questions need answering to understand what has been achieved and what is achievable within and by ASEAN for consumers. This chapter therefore examines what is meant by the so-called ‘ASEAN way’ – a term frequently adopted by key players to explain and justify ASEAN’s role and existence. It also explores the influences of the European Union’s structures and instruments on ASEAN’s use of formal governance mechanisms and its use of concepts such as an ‘economic community’ to define itself. The chapter also considers ASEAN’s meaning and purpose from a range of theoretical perspectives, including: new regionalism; game theory and reciprocity; collective action; and social networks and the networked polity. The chapter further explores ways ASEAN can become more effective in advancing consumer interests through transgovernmentalism, ‘trading up’ and legal transplantation. Some of these perspectives are adopted when examining the topics covered in the following chapters in this volume.