The ASEAN Economic Community and the European Experience

01.09.2006 | HWWI Research Paper | von Reid W. Click, Michael G. Plummer

In November 2002, it was proposed at the Association of Southeast Asian Nations (ASEAN) Heads of Government meeting in Phnom Penh that the region should consider the possibility of creating an "ASEAN Economic Community" (AEC) by 2020. The name is evocative, for an "Economic Community" immediately brings to mind the European experience. In fact, when the Asian Pacific Economic Cooperation (APEC) was "re-inventing" itself, it was proposed that the words behind the organization's acronym be replaced with "Asia-Pacific Economic Community." This idea was rejected explicitly for fear that it would give the impression that APEC was intending to move in the direction of the EC model, which was thought to be too controversial. That the ASEAN Heads of Government should consider an "Economic Community," even with the baggage the term brings, is in some sense nothing new. ASEAN has always studied carefully European economic integration and seen it as a sort of "role model," though certainly to be adapted in the Southeast Asian development context. In this paper, we will consider what lessons the European experience might hold for ASEAN, as well as extend some suggestions — based in part on the EU experience — as to how ASEAN might evolve into an AEC. We begin with a brief contextual consideration of ASEAN intra-regional economic interaction, in particular with respect to trade, with some comparison to the early years of the EU. This is followed in Section III by a review of the evolution of ASEAN economic integration, culminating in the AEC. Section IV then proceeds to delineate some salient lessons of the EU experience for ASEAN. Finally, we give some suggestions as to how the AEC might proceed in Section V.