K.J.SOMAIYA COLLEGE OF ARTS AND

COMMERCE

PROJECT ON

ASEAN – AN ECONOMIC INTEGRATION

SUBMITTED BY:

MISS. BHAVNA HASMUKHBHAI RAVAL

ROLL NO. : - 46

M COM PART – 1 (SEMESTER - 1)

2013 - 2014

INTERNAL ASSESSMENT

ECONOMICS OF GLOBALE TRADE AND FINANCE

PREPARED UNDER THE GUIDANCE OF

DR.C.V. HARI NARAYANAN

AFFILIATED TO:

ACKNOWLEDGEMENT

I would like to thank all the people who helped me in

undertaking the study and completing the project, by imparting me with

valuable information and guidance that was required at every stage of

my project work.

I would like to thank our Principal Dr. Sudha Vyas and

course co-ordinate Miss. Sonali Deogirikar, for giving me an

opportunity and encouragement to prepare the project.

Last but not the least, I would like to thank my project

guide Dr. C. V. HARI NARAYANAN for guiding and helping me

throughout the preparation of my project, right from selection of the

topic till its completion.

Bhavna H. Raval

Roll No:-46

DECLARATION BY THE STUDENT

I, BHAVNA HASMUKHBHAI RAVAL, Roll

Number:-46 student of M.Com Accountancy Part- 1 hereby

declare that the project for the paper Economics of

Global Trade & Finance titled, “ASEAN – AN

ECONOMIC INTEGRATION” Submitted by me for

Semester - 1 during the academic year 2013 – 2014, Is

based on actual work carried out by me under the

guidance and supervision of

Dr. C.V. HARI NARAYANAN.

I further state that this work is original and not

submitted anywhere else for any examination.

Signature of Student

(Bhavna H. Raval)

Roll No:-46

K. J. SOMAIYA COLLEGE OF ARTS & COMMERCE

VIDYAVIHAR (EAST)

CERTIFICATE

(2013 – 2014)

This is to certify that the undersigned have assessed and

evaluated the project on “ASEAN – An Economic Integration”

submitted by BHAVNA H. RAVAL, Roll No:-46 student of M.Com

in Accountancy Part-1 for the academic year 2013-2014. This project

is original to the best of our knowledge and has been accepted

for Internal Assessment.

Date: - 26th SEPTEMBER, 2013

Place: - MUMBAI

Internal Examiner External Examiner Principal (Dr. C.V. HARI NARAYANAN) (Dr. SUDHA VYAS)

INDEX

Topics page number

1. Introduction 02

2. HISTORY 03

3. ABOUT ASEAN

Legal Personality 05

ASEAN Name 05

ASEAN Identity 06

ASEAN Motto 06

ASEAN Member States 06

Admission of New Members 12

ASEAN Flag 12

ASEAN Emblem 13

ASEAN Day 14

ASEAN Anthem 14

4. PURPOSE 15

5. PRINCIPLES 17

6. charter 19

Interpretation of Charter 20

Original Text 20

Registration Of The ASEAN Charter 20

7. Structure 21

8. Settlement of dispute

General Principles 23

Good Offices, Conciliation 23

Dispute Settlement Mechanism in Specific Instruments 23

Establishment of Dispute Settlement Mechanisms 24

Unsolved Disputes 24

Compliance 24

9. DECISION MAKING

Consultation & Consensus 24

Implementation 25

10. BUDGET & FINANCE

General Principles 25

Operational Budget & Finances of the ASEAN Secretariat 25

11. ADMISSION & PROCEDURE

Chairman of ASEAN 26

Role of the Chairman of ASEAN 26

Working Language 27

12. ORGANS

ASEAN Summit 29

ASEAN Coordinating Council 29

ASEAN Community Councils 30

ASEAN Sectoral Ministerial Bodies 31

Secretary-General of ASEAN & ASEAN Secretariat 31

Committee of Permanent representatives to ASEAN 33

ASEAN National Secretatriats 34

ASEAN Human Rights Body 34

ASEAN Foundation

13. ASEAN HEADS OF DEPARTMENT 35

14. ENTITIES ASSOCIATED WITH ASEAN

Parliamentarians 36

Business Organisation 36

Think Thank & Academic Institution 37

AEAN – Accredited Civil Society Organisations (CSOs) 37

15. EXTERNAL RELATION

Conduct of External Relation 38

Dialogue Co-ordinator 39

Status of External Parties 39

16. ASEAN – India Free Trade Area 40

Background 41

History 42

Tariffs 43

Criticism 43

17. CONCLUSION 44

18. BIBLIOGRAPHY 46

ASEAN – AN ECONOMIC INTEGRATION

INTRODUCTION:

The Association of Southeast Asian Nations (ASEAN) was founded on August 8 1967 by

Indonesia, Malaysia, the Philippines, Singapore and Thailand. They were subsequently

joined by Brunei, Cambodia, Laos, Myanmar and Vietnam. ASEAN activities are

coordinated by the ASEAN Secretariat, which is based in Jakarta, Indonesia.

ASEAN has emphasized regional cooperation on the three pillars of security and socio-

cultural and economic integration. It has made most progress in economic integration and

aims to create an ASEAN Economic Community (AEC) by 2015. The AEC would have a

combined population of over 566 million people and a gross domestic product of over

$1.173 trillion.

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. Other

elements of economic integration, such as the free flow of investment and services and

the elimination of non-tariff barriers, have been added by the ASEAN leaders.

Through agreements such as the ASEAN Charter, signed in November 2007, ASEAN's

leaders are attempting to build a single market, but without either a strong central

executive (comparable to the European Commission in the European Union) or a well-

developed body of laws and dispute settlement mechanisms (like those of the North

American Free Trade Association (NAFTA)). ASEAN members' historical reluctance to

encourage either of these elements stems from a fear of impinging on ASEAN’s long-

held principles of non-interference and consensus. However, failure to integrate

ASEAN's diverse markets will mean a loss of investment and economic opportunities to

regional competitors, such as China and India. This tension between the need to integrate

and the reluctance to yield national sovereignty is the main factor affecting the

development of the AEC.

HISTORY:

Much of Southeast Asia was colonized by Western powers prior to World War II. During

the war Japan took control of the region, but was forced out following the war as

Southeast Asia countries pushed for independence. Though they were independent, the

countries found that stability was hard to come by, and they soon looked to each other for

answers.

ASEAN was preceded by an organisation called the Association of Southeast Asia,

commonly called ASA, an alliance consisting of the Philippines, Malaysia and Thailand

that was formed in 1961. The bloc itself, however, was established on 8 August 1967,

when foreign ministers of five countries – Indonesia, Malaysia, the Philippines,

Singapore, and Thailand – met at the Thai Department of Foreign Affairs building in

Bangkok and signed the ASEAN Declaration, more commonly known as the Bangkok

Declaration. The five foreign ministers – Adam Malik of Indonesia, Narciso Ramos of

the Philippines, Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and Thanat

Khoman of Thailand – are considered the organisation's Founding Fathers.

It was a short, simply-worded document containing just five articles. It declared the

establishment of an Association for Regional Cooperation among the Countries of

Southeast Asia to be known as the Association of Southeast Asian Nations (ASEAN) and

spelled out the aims and purposes of that Association. These aims and purposes were

about cooperation in the economic, social, cultural, technical, educational and other

fields, and in the promotion of regional peace and stability through abiding respect for

justice and the rule of law and adherence to the principles of the United Nations Charter.

It stipulated that the Association would be open for participation by all States in the

Southeast Asian region subscribing to its aims, principles and purposes. It proclaimed

ASEAN as representing “the collective will of the nations of Southeast Asia to bind

themselves together in friendship and cooperation and, through joint efforts and

sacrifices, secure for their peoples and for posterity the blessings of peace, freedom and

prosperity.”

The motivations for the birth of ASEAN were so that its members’ governing elite could

concentrate on nation building, the common fear of communism, reduced faith in or

mistrust of external powers in the 1960s, and a desire for economic development.

The bloc grew when Brunei Darussalam became the sixth member on 8 January 1984,

barely a week after gaining independence on 1 January.

On 28 July 1995, Vietnam became the seventh member. Laos and Myanmar (Burma)

joined two years later on 23 July 1997. Cambodia was to have joined together with Laos

and Burma, but was deferred due to the country's internal political struggle. The country

later joined on 30 April 1999, following the stabilisation of its government.

During the 1990s, the bloc experienced an increase in both membership and drive for

further integration. In 1990, Malaysia proposed the creation of an East Asia Economic

Caucus comprising the then members of ASEAN as well as the People's Republic of

China, Japan, and South Korea, with the intention of counterbalancing the growing

influence of the United States in the Asia-Pacific Economic Cooperation (APEC) and in

the Asian region as a whole. This proposal failed, however, because of heavy opposition

from the United States and Japan. Despite this failure, member states continued to work

for further integration and ASEAN Plus Three was created in 1997.

In 1992, the Common Effective Preferential Tariff (CEPT) scheme was signed as a

schedule for phasing tariffs and as a goal to increase the region’s competitive advantage

as a production base geared for the world market . This law would act as the framework

for the ASEAN Free Trade Area. After the East Asian Financial Crisis of 1997, a revival

of the Malaysian proposal was established in Chiang Mai, known as the Chiang Mai

Initiative, which calls for better integration between the economies of ASEAN as well as

the ASEAN Plus Three countries (China, Japan, and South Korea).

Aside from improving each member state's economies, the bloc also focused on peace

and stability in the region. On 15 December 1995, the Southeast Asian Nuclear-Weapon-

Free Zone Treaty was signed with the intention of turning Southeast Asia into a Nuclear-

Weapon-Free Zone. The treaty took effect on 28 March 1997 after all but one of the

member states have ratified it. It became fully effective on 21 June 2001, after the

Philippines ratified it, effectively banning all nuclear weapons in the region.

ABOUT ASEAN:

ARTICLE 1 => LEGAL PERSONALITY OF ASEAN

ASEAN, as an inter-governmental organization, is hereby conferred legal personality.

ARTICLE 2 => ASEAN Name

A. Guidelines on the Use of the Name “ASEAN”

1. The Name “ASEAN” refers to the “Association of Southeast Asian Nations”.

2. The Name “ASEAN” is the reserved copyright of ASEAN.

3. The Name “ASEAN” shall be used in a manner that promotes ASEAN and its

purposes and principles. It shall not be used for political propaganda or for activities that

harm the dignity of ASEAN.

B. Enquiries and Requests for the Use of the Name “ASEAN”

4. Enquiries and requests for the use of the name “ASEAN” shall be submitted in

writing, and accompanied with the following information:

• organisational profile; and

• purpose for the proposed use of the name “ASEAN”.

5. Such request should satisfy the following conditions:

• The entity should be indigenous to ASEAN;

• The usage of the name “ASEAN” should not have any negative effect on

the aims and objectives of ASEAN;

• The name “ASEAN” should not be brought into disrepute by its usage; and

• The use of the name “ASEAN” shall be in support of ASEAN purposes and

principles.

6. The ASEAN Secretariat shall consider the requests accordingly. The approval

granted shall be exclusive to the proposed activity. Such approval shall not be extended

to third parties.

7. Enquiries and requests for the use of the name “ASEAN” should be submitted to the

following address:

Public Outreach and Civil Society Division

The ASEAN Secretariat

70 A, Jl. Sisingamangaraja, Jakarta 12110

Indonesia

E-mail: public@asean.org

ARTICLE 3 => ASEAN IDENTITY

ASEAN shall promote its common ASEAN identity and a sense

of belonging among its peoples in order to achieve its shared

destiny, goals and values.

ARTICLE 4 => ASEAN MOTTO

The motto ASEAN is: "One Vision, One Identity, One

Community"

ARTICLE 5 => ASEAN MEMBER STATES

The Member States of ASEAN are Brunei Darussalam, the Kingdom of Cambodia, the

Republic of Indonesia, the Lao People’s Democratic Republic, Malaysia, the Union of

Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of

Thailand and the Socialist Republic of Viet Nam.

Brunei Darussalam

For Brunei Darussalam:

HAJI HASSANAL BOLKIAH

Sultan of Brunei Darussalam

Head of State : His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah

Capital : Bandar Seri Begawan

Language(s) : Malay, English

Currency : B$ (Brunei Dollar) Ministry of Foreign Affairs & Trade of Brunei Darussalam Website: www.mfa.gov.bn

Cambodia

For the Kingdom of Cambodia:

SAMDECH HUN SEN

Prime Minister

Head of State : His Majesty King Norodom Sihamoni

Head of Government : Prime Minister Hun Sen

Capital : Phnom Penh

Language : Khmer

Currency : Riel

Ministry of Foreign Affairs & International Cooperation of Cambodia

Website: www.mfaic.gov.kh

Indonesia

For the Republic of Indonesia:

DR. SUSILO BAMBANG YUDHOYONO

President

Head of State : President Susilo Bambang Yudhoyono

Capital : Jakarta

Language : Indonesian

Currency : Rupiah

Department of Foreign Affairs of Indonesia Website: www.deplu.go.id

Lao PDR

For the Lao People’s Democratic Republic:

BOUASONE BOUPHAVANH

Prime Minister

Head of State : President Choummaly Sayasone

Head of Government : Prime Minister Thongsing Thammavong

Capital : Vientiane

Language : Lao

Currency : Kip

Ministry of Foreign Affairs of Lao PDR Website: www.mofa.gov.la

Malaysia

For Malaysia:

DATO’ SERI ABDULLAH AHMAD BADAWI

Prime Minister

Head of Government : The Honourable Dato’ Sri Mohd Najib bin Tun Abdul Razak

Capital : Kuala Lumpur

Language(s) : Malay, English, Chinese, Tamil

Currency : Ringgit

Ministry of Foreign Affairs of Malaysia Website: www.kln.gov.my

ASEAN-Malaysia National Secretariat Website: www.kln.gov.my/myasean

Myanmar(Burma)

For the Union of Myanmar:

GENERAL THEIN SEIN

Prime Minister

Head of State : Senior General Than Shwe

Head of Government : Prime Minister General Thein Sein

Capital : Nay Pyi Taw

Language : Myanmar

Currency : Kyat

Ministry of Foreign Affairs of Myanmar Website: www.mofa.gov.mm

Philippines

For the Republic of the Philippines:

GLORIA MACAPAGAL-ARROYO

President

Head of State : President Benigno S. Aquino III

Capital : Manila

Language(s) : Filipino, English, Spanish

Currency : Peso

Department of Foreign Affairs of the Philippines Website: www.dfa.gov.ph

Singapore

For the Republic of Singapore:

LEE HSIEN LOONG

Prime Minister

Head of State : President S R Nathan

Head of Government : Prime Minister Lee Hsien Loong

Capital : Singapore

Language(s) : English, Malay, Mandarin, Tamil

Currency : S$ (Singapore Dollar)

Ministry of Foreign Affairs of Singapore Website: www.mfa.gov.sg

Thailand

For the Kingdom of Thailand:

GENERAL SURAYUD CHULANONT (RET.)

Prime Minister

Head of State : His Majesty King Bhumibol Adulyadej

Head of Government : Prime Minister Abhisit Vejjajiva

Capital : Bangkok

Language : Thai

Currency : Baht

Ministry of Foreign Affairs of Thailand Website: www.mfa.go.th

Viet Nam

For the Socialist Republic of Viet Nam:

NGUYEN TAN DUNG

Prime Minister

Head of State : President Nguyen Minh Triet

Head of Government : Prime Minister Nguyen Tan Dung

Capital : Ha Noi

Language : Vietnamese

Currency : Dong

Ministry of Foreign Affairs of Viet Nam Website: www.mofa.gov.vn

ARTICLE 6 => ADMISSION OF NEW MEMBERS

1. The procedure for application and admission to ASEAN

shall be prescribed by the ASEAN Coordinating Council.

2. Admission shall be based on the following criteria:

(a) location in the recognised geographical region of Southeast Asia;

(b) recognition by all ASEAN Member States;

(c) agreement to be bound and to abide by the Charter; and

(d) ability and willingness to carry out the obligations of Membership.

3. Admission shall be decided by consensus by the ASEAN Summit, upon the

recommendation of the ASEAN Coordinating Council.

4. An applicant State shall be admitted to ASEAN upon

signing an Instrument of Accession to the Charter.

ARTICLE 7 => ASEAN FLAG

The ASEAN flag shall be as shown in Annex 3.

Guidelines on the use of The ASEAN FLAG

1. The ASEAN Flag is a symbol of Member States’ unity & support for the principles

& endeavours of ASEAN & a means to promote greater ASEAN awareness & solidarity.

2. The ASEAN Flag represents a stable, peaceful, united and dynamic ASEAN. The

colours of the Flag – blue, red, white and yellow – represent the main colours of the flags

of all the ASEAN Member States.

3. The blue represents peace and stability. Red depicts courage and dynamism, white

shows purity and yellow symbolises prosperity.

4. The stalks of padi in the centre of the Emblem represent the dream of ASEAN’s

Founding Fathers for an ASEAN comprising all the countries in Southeast Asia, bound

together in friendship and solidarity.

5. The circle represents the unity of ASEAN.

6. The ASEAN Flag is the reserved copyright of ASEAN.

7. The specifications of the ASEAN Flag are annexed.

A. Dignity of the ASEAN Flag

8. The ASEAN Flag shall be treated with respect and shall not be subjected to

any indignity.

ARTICLE 8 => ASEAN EMBLEM

The ASEAN emblem shall be as shown in Annex 4.

Guidelines on the Use of the ASEAN Emblem

1. The ASEAN Emblem shall be the official emblem of ASEAN.

2. The ASEAN Emblem represents a stable, peaceful, united and dynamic ASEAN.

The colours of the Emblem — blue, red, white and yellow — represent the main colours

of the state crests of all the ASEAN Member States.

3. The blue represents peace and stability. Red depicts courage and dynamism, white

shows purity and yellow symbolises prosperity.

4. The stalks of padi in the centre of the Emblem represent the dream of ASEAN’s

Founding Fathers for an ASEAN comprising all the countries in Southeast Asia, bound

together in friendship and solidarity.

5. The circle represents the unity of ASEAN.

6. The ASEAN Emblem is the reserved copyright of ASEAN.

Note:

The Guidelines were adopted at the 6th Meeting of the ASEAN Coordinating Council

(ACC), Ha Noi, 8 April 2010.

ARTICLE 9 => ASEAN DAY

The 8th of August shall be observed as ASEAN Day.

ARTICLE 10 => ASEAN ANTHEM

Guidelines on the Use of the ASEAN Anthem

1. The ASEAN Anthem is an expression of ASEAN unity. It also strengthens the sense

of ASEAN identity and belonging among the peoples of the region.

2. The ASEAN Anthem is titled “THE ASEAN WAY”, with musical composition and

lyrics as attached.

A. Dignity of the ASEAN Anthem

4. The ASEAN Anthem shall be used in a proper and dignified manner. When the

Anthem is played, the audience shall rise.

5. The Anthem shall not be used in whole or in parts for commercial purposes or

political propaganda.

Audio, "The ASEAN Way"

The Asean Way / Original Version

By :

Mr.Kittikhun Sodprasert, Mr Sampow Triudom, Mrs.Payom Valaipatchra

Lyrics, "The ASEAN Way"

Raise our flag high, sky high

Embrace the pride in our heart

ASEAN we are bonded as one

Look-in out to the world.

For peace, our goal from the very start

And prosperity to last.

Note:

The Guidelines were adopted at the 6th Meeting of the ASEAN Coordinating Council

(ACC), Ha Noi, 8 April 2010.

PURPOSES:

The Purposes of ASEAN are:

1. To maintain and enhance peace, security, stability, ASEAN study

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 is stable, prosperous, highly

competitive and economically integrated with effective facilitation for trade &

investment in which there is free flow of goods, services and investment; facilitated

movement of business persons, professionals, talents and labour; & freer flow of capital;

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 region’s

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 well-being & livelihood of the peoples of ASEAN by providing them

with equitable access to opportunities for human development,social welfare & 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.

PRINCIPLES:

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) mutual 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 & 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

emphasizing 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 ASEAN’s

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.

(o) effective cooperation among themselves.

3. In 2003 the group agreed on the pursuit of three pillars, or, "communities":

Security Community: No armed conflict has taken place among ASEAN’s members

since its inception four decades ago. Each member has agreed to resolve all conflicts by

use of peaceful diplomacy and without use of force.

Economic Community: Perhaps the most vital part of ASEAN's quest is to create a free,

integrated market in its region, much like that of the European Union. The ASEAN Free

Trade Area (AFTA) embodies this goal, eliminating virtually all tariffs (taxes on imports

or exports) in the region to increase competitiveness and efficiency. The organization is

now looking towards China and India to open up their markets in order to create the

largest free market area in the world.

Socio-cultural Community: To combat the pitfalls of capitalism and free trade, namely,

disparity in wealth and job loss, the socio-cultural community focuses on disadvantaged

groups such as rural workers, women, and children. Various programs are used to this

end, including those for HIV/AIDS, higher education, and sustainable development,

among others. The ASEAN scholarship is offered by Singapore to the other nine

members, and the University Network is a group of 21 higher education institutes that aid

each other in the region.

CHARTER:

The Secretariat of ASEAN at Jalan Sisingamangaraja No.70A, South Jakarta, Indonesia.

The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by

providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance.

The ASEAN Charter entered into force on 15 December 2008. A gathering of the ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark this very historic occasion for ASEAN.

With the entry into force of the ASEAN Charter, ASEAN will henceforth operate under a new legal framework and establish a number of new organs to boost its community-building process.

In effect, the ASEAN Charter has become a legally binding agreement among the 10

ASEAN Member States. It will also be registered with the Secretariat of the United Nations, pursuant to Article 102, Paragraph 1 of the Charter of the United Nations.

The importance of the ASEAN Charter can be seen in the following contexts:

New political commitment at the top level New and enhanced commitments New legal framework, legal personality New ASEAN bodies Two new openly-recruited DSGs

More ASEAN meetings More roles of ASEAN Foreign Ministers New and enhanced role of the Secretary-General of ASEAN Other new initiatives and changes

ARTICLE 11 => INTERPRETATION OF THE CHARTER

1. Upon the request of any Member State, the interpretation of the Charter shall be

undertaken by the ASEAN Secretariat in accordance with the rules of procedure

determined by the ASEAN Coordinating Council.

2. Any dispute arising from the interpretation of the Charter shall be settled in

accordance with the relevant provisions in Chapter VIII.

3. Headings and titles used throughout the Charter shall

only be for the purpose of reference.

ARTICLE 12 => ORIGINAL TEXT

The signed original text of this Charter in English shall be

deposited with the Secretary-General of ASEAN, who shall

provide a certified copy to each Member State.

ARTICLE 13 => REGISTRATION OF THE ASEAN CHARTER

This Charter shall be registered by the Secretary-General of

ASEAN with the Secretariat of the United Nations, pursuant to

Article 102, paragraph 1 of the Charter of the United Nations.

STRUCTURE:

The Chair of ASEAN is rotated among the ASEAN countries on an annual basis, and acts

as host of the Summit and key ministerial meetings. The Chair of ASEAN for 2013 is

Brunei, to be followed by Myanmar in 2014.

The ASEAN Secretariat, based in Jakarta, Indonesia, coordinates, initiates and

implements ASEAN activities. The Secretariat is headed by the Secretary-General of

ASEAN, who is appointed for a five-year term and accorded ministerial status. Le Luong

Minh, former Vice Minister of Foreign Affairs of Vietnam, assumed the post of

Secretary-General of ASEAN in January 2013.

Established by the ASEAN Charter, the Jakarta-based ASEAN Committee for Permanent

Representatives (CPR) is tasked to engage Dialogue Partners.

There are a number of decision-making bodies that comprise ASEAN, spanning from

international to the very local. The most important are listed below:

Meeting of the ASEAN Heads of State and Government: The highest body made up of

the heads of each respective government; meets annually.

Ministerial Meetings: Coordinates activities in many areas including agriculture and

forestry, trade, energy, transportation, science and technology, among others; meets

annually.

Committees for External Relations: Made up of diplomats in many of the world's major

capitals.

Secretary-General: The appointed leader of the organization empowered to implement

policies and activities; appointed to five year term. Currently Surin Pitsuwan of Thailand.

Not mentioned above are over 25 other committees and 120 technical and advisory

groups.

Source: David Irvine, Making haste less slowly: Asean from 1975, in Alison Broinski (editor), Understanding

Asean, Macmillan Press Ltd, London, 1983 p.53

SETTLEMENT OF DISPUTES:

ARTICLE 12 => GENERAL PRINCIPLES

1. Member States shall endeavour to resolve peacefully all disputes in a

timely manner through dialogue, consultation and negotiation.

2. ASEAN shall maintain and establish dispute settlement

mechanisms in all fields of ASEAN cooperation.

ARTICLE 13 => GOOD OFFICES, CONCILIATION AND MEDIATION

1. Member States which are parties to a dispute may at any time agree to

resort to good offices, conciliation or mediation in order to resolve the dispute

within an agreed time limit.

2. Parties to the dispute may request the Chairman of ASEAN or the

Secretary-General of ASEAN, acting in an exofficio capacity, to provide good

offices, conciliation or mediation.

ARTICLE 14 => DISPUTE SETTLEMENT MECHANISMS IN SPECIFIC

INSTRUMENTS

1. Disputes relating to specific ASEAN instruments shall be settled through

the mechanisms and procedures provided for in such instruments.

2. Disputes which do not concern the interpretation or application of any ASEAN

instrument shall be resolved

peacefully in accordance with the Treaty of Amity and

Cooperation in Southeast Asia and its rules of procedure.

3. Where not otherwise specifically provided, disputes which

concern the interpretation or application of ASEAN economic

agreements shall be settled in accordance with the ASEAN

Protocol on Enhanced Dispute Settlement Mechanism.

ARTICLE 15 => ESTABLISHMENT OF DISPUTE SETTLEMENT

MECHANISMS

Where not otherwise specifically provided, appropriate dispute settlement mechanisms,

including arbitration, shall be established for disputes which concern the interpretation or

application of this Charter and other ASEAN instruments.

ARTICLE 16 => UNRESOLVED DISPUTES

When a dispute remains unresolved, after the application of the preceding provisions of

this Chapter, this dispute shall be referred to the ASEAN Summit, for its decision.

ARTICLE 17 => COMPLIANCE

1. The Secretary-General of ASEAN, assisted by the ASEAN Secretariat or any other

designated ASEAN body, shall monitor the compliance with the findings,

recommendations or decisions resulting from an ASEAN dispute settlement mechanism,

and submit a report to the ASEAN Summit.

2. Any Member State affected by non-compliance with the findings, recommendations

or decisions resulting from an ASEAN dispute settlement mechanism, may refer the

matter to the ASEAN Summit for a decision.

DECISION-MAKING:

ARTICLE 18 => DECISION-MAKING CONSULTATION AND

CONSENSUS

1. As a basic principle, decision-making in ASEAN shall be

based on consultation and consensus.

2. Where consensus cannot be achieved, the ASEAN

Summit may decide how a specific decision can be made.

3. Nothing in paragraphs 1 and 2 of this Article shall affect the modes of decision-making

as contained in the relevant ASEAN legal instruments.

4. In the case of a serious breach of the Charter or noncompliance,

the matter shall be referred to the ASEAN Summit for decision.

ARTICLE 19 => IMPLEMENTATION AND PROCEDURE

1. Each ASEAN Community Council shall prescribe its own rules of procedure.

2. In the implementation of economic commitments, a

formula for flexible participation, including the ASEAN Minus X

formula, may be applied where there is a consensus to do so.

BUDGET AND FINANCE:

ARTICLE 20 => GENERAL PRINCIPLES

1. ASEAN shall establish financial rules and procedures in

accordance with international standards.

2. ASEAN shall observe sound financial management

policies and practices and budgetary discipline.

3. Financial accounts shall be subject to internal and external audits.

ARTICLE 21 => OPERATIONAL BUDGET AND FINANCES

OF THE ASEAN SECRETARIAT

1. The ASEAN Secretariat shall be provided with the

necessary financial resources to perform its functions effectively.

2. The operational budget of the ASEAN Secretariat shall be

met by ASEAN Member States through equal annual

contributions which shall be remitted in a timely manner.

3. The Secretary-General shall prepare the annual operational budget of the ASEAN

Secretariat for approval by the ASEAN Coordinating Council upon the recommendation of

the Committee of Permanent Representatives.

4. The ASEAN Secretariat shall operate in accordance with the financial rules and

procedures determined by the ASEAN Coordinating Council upon the recommendation of

the Committee of Permanent Representatives.

ADMINISTRATION AND PROCEDURE:

ARTICLE 22 => CHAIRMAN OF ASEAN

1. The Chairmanship of ASEAN shall rotate annually, based

on the alphabetical order of the English names of Member

States.

2. ASEAN shall have, in a calendar year, a single Chairmanship by which the

Member State assuming the Chairmanship shall chair:

(a) the ASEAN Summit and related summits;

(b) the ASEAN Coordinating Council; (c) the three ASEAN Community Councils; (d) where appropriate, the relevant ASEAN Sectoral

Ministerial Bodies and senior officials; and (e) the Committee of Permanent Representatives.

ARTICLE 23 => ROLE OF THE CHAIRMAN OF ASEAN

The Member State holding the Chairmanship of ASEAN shall:

(a) actively promote and enhance the interests and wellbeing of ASEAN, including efforts to build an ASEAN Community through policy initiatives, coordination, consensus and cooperation;

(b) ensure the centrality of ASEAN; (c) ensure an effective and timely response to urgent issues or crisis situations affecting

ASEAN, including providing its good offices and such other arrangements to immediately address these concerns; (d) represent ASEAN in strengthening and promoting closer relations with external partners; and

(e) carry out such other tasks and functions as may be mandated.

ARTICLE 24 => WORKING LANGUAGE OF ASEAN

The working language of ASEAN shall be English.

ORGANS:

ARTICLE 25 => ASEAN SUMMIT

1. The ASEAN Summit shall comprise the Heads of State or Government of the Member States. 2. The ASEAN Summit shall:

(a) be the supreme policy-making body of ASEAN;

(b) deliberate, provide policy guidance and take decisions on key issues

pertaining to the realization of the objectives of ASEAN, important matters of

interest to Member States and all issues referred to it by the ASEAN

Coordinating Council, the ASEAN Community Councils and ASEAN Sectoral

Ministerial Bodies;

(c) instruct the relevant Ministers in each of the Councils concerned to hold ad hoc

inter-Ministerial meetings, and address important issues concerning ASEAN that

cut across the Community Councils. Rules of procedure for such meetings shall

be adopted by the ASEAN Coordinating Council;

(d) address emergency situations affecting ASEAN by taking appropriate actions;

(e) decide on matters referred to it under Chapters VII and VIII;

(f) Authorise the establishment and the dissolution of

Sectoral Ministerial Bodies and other ASEAN institutions; and

(g) appoint the Secretary-General of ASEAN, with the

rank and status of Minister, who will serve with the

confidence and at the pleasure of the Heads of

State or Government upon the recommendation of

the ASEAN Foreign Ministers Meeting.

3. ASEAN Summit Meetings shall be:

(a) held twice annually, and be hosted by the Member State holding the ASEAN Chairmanship; and

(b) convened, whenever necessary, as special or ad

hoc meetings to be chaired by the Member State

holding the ASEAN Chairmanship, at venues to be

agreed upon by ASEAN Member States.

List of ASEAN Summits

ASEAN Summits Venue Date

First ASEAN Summit Bali, Indonesia 23-24 February 1976

Second ASEAN Summit Kuala Lumpur, Malaysia 4-5 August 1977

Third ASEAN Summit Manila, the Philippines 14-15 December 1987

Fourth ASEAN Summit Singapore 27-29 January 1992

Fifth ASEAN Summit Bangkok, Thailand 14-15 December 1995

First Informal ASEAN Summit Jakarta, Indonesia 30 November 1996

Second Informal ASEAN Summit Kuala Lumpur, Malaysia 14-16 December 1997

Sixth ASEAN Summit Ha Noi, Vietnam 15-16 December 1998

Third Informal ASEAN Summit Manila, the Philippines 27-28 November 1999

Fourth Informal ASEAN Summit Singapore 22-25 November 2000

Seventh ASEAN Summit and Related Summits

Bandar Seri Begawan, Brunei Darussalam

5-6 November 2001

Eight ASEAN Summit and Related Summits

Phnom Penh, Cambodia 4-5 November 2002

Ninth ASEAN Summit and Related Bali, Indonesia 7-8 November 2003

Summits

Tenth ASEAN Summit and Related

Summits Vientiane, Lao PDR 29-30 November 2004

Eleventh ASEAN Summit and

Related Summits Kuala Lumpur, Malaysia 12-14 December 2005

Twelfth ASEAN Summit and Related Summits

Cebu, the Philippines 9-15 January 2007

Thirteenth ASEAN Summit and Related Summits

Singapore 18-22 November 2007

Fourteenth ASEAN Summit and Related Summits

Cha-am Hua Hin, Thailand 26 February – 1

March 2009

Fifteenth ASEAN Summit and

Related Summits Cha-am Hua Hin, Thailand 23-25 October 2009

Sixteenth ASEAN Summit Ha Noi 28-30 October 2010

Seventeenth ASEAN Summit Ha Noi 28-30 October 2010

Eighteenth ASEAN Summit Jakarta 7-8 May 2011

Nineteenth ASEAN Summit Bali, Indonesia 14-19 November 2011

Twentieth ASEAN Summit Phnom Penh 03-04 April 2012

Twentyfirst ASEAN Summit Phnom Penh 18 November 2012

ARTICLE 26 => ASEAN COORDINATING COUNCIL

1. The ASEAN Coordinating Council shall comprise the ASEAN Foreign Ministers and meet at least twice a year.

2. The ASEAN Coordinating Council shall:

(a) prepare the meetings of the ASEAN Summit;

(b) coordinate the implementation of agreements & decisions of ASEAN Summit;

(c) coordinate with the ASEAN Community Councils to

enhance policy coherence, efficiency and cooperation among them;

(d) coordinate the reports of ASEAN Community Councils to ASEAN Summit;

(e) consider the annual report of the Secretary-General on the work of ASEAN;

(f) consider the report of the Secretary-General on the functions and operations

of the ASEAN Secretariat and other relevant bodies;

(g) approve the appointment and termination of the Deputy Secretaries-General

upon the recommendation of the Secretary-General; and

(h) undertake other tasks provided for in this Charter or such other functions as

may be assigned by the ASEAN Summit.

3. The ASEAN Coordinating Council shall be supported by the relevant senior officials.

ARTICLE 27 => 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.

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.

ARTICLE 28 => ASEAN SECTORAL MINISTERIAL BODIES

1. ASEAN Sectoral Ministerial Bodies shall:

(a) function in accordance with their respective established mandates;

(b) implement the agreements and decisions of the

ASEAN Summit under their respective purview;

(c) strengthen cooperation in their respective fields in support of

ASEAN integration and community building; and

(d) submit reports and recommendations to their respective Community Councils.

2. Each ASEAN Sectoral Ministerial Body may have under its purview the relevant

senior officials and subsidiary bodies to undertake its functions as contained in Annex 1.

The Annex may be updated by the Secretary-General of ASEAN upon the

recommendation of the Committee of Permanent Representatives without recourse to the

provision on Amendments under this Charter.

ARTICLE 29 => SECRETARY-GENERAL OF ASEAN AND ASEAN

SECRETARIAT

1. The Secretary-General of ASEAN shall be appointed by the ASEAN Summit for a

non-renewable term of office of five years, selected from among nationals of the ASEAN

Member States based on alphabetical rotation, with due consideration to integrity,

capability and professional experience, and gender equality.

2. The Secretary-General shall:

(a) carry out the duties & responsibilities of this high office in accordance with the

provisions of Charter & relevant ASEAN instruments,protocols & established practices;

(b) facilitate and monitor progress in the implementation of ASEAN agreements

and decisions, and submit an annual report on the work of ASEAN to ASEAN Summit;

(c) participate in meetings of the ASEAN Summit, the ASEAN Community

Councils, the ASEAN Coordinating Council, and ASEAN Sectoral Ministerial Bodies

and other relevant ASEAN meetings;

(d) present the views of ASEAN and participate in meetings with external parties

in accordance with approved policy guidelines and mandate given to the

Secretary-General; and

(e) recommend the appointment and termination of the Deputy Secretaries-General

to the ASEAN Coordinating Council for approval.

3. The Secretary-General shall also be the Chief Administrative Officer of ASEAN.

4. The Secretary-General shall be assisted by four Deputy Secretaries-General with the

rank and status of Deputy Ministers. The Deputy Secretaries-General shall be

accountable to the Secretary-General in carrying out their functions.

5. The four Deputy Secretaries-General shall be of different nationalities from the

Secretary-General and shall come from four different ASEAN Member States.

6. The four Deputy Secretaries-General shall comprise:

(a) two Deputy Secretaries-General who will serve a non-renewable term of three

years, selected from among nationals of the ASEAN Member States

based on alphabetical rotation, with due consideration to integrity, qualifications,

competence, experience and gender equality; and

(b) two Deputy Secretaries-General who will serve a term of three years, which

may be renewed for another three years. These two Deputy Secretaries-General shall be

openly recruited based on merit.

7. The ASEAN Secretariat shall comprise the Secretary-General and

such staff as may be required.

8. The Secretary-General and the staff shall:

(a) uphold the highest standards of integrity, efficiency, and

competence in the performance of their duties;

(b) not seek or receive instructions from any government or external

party outside of ASEAN; and

(c) refrain from any action which might reflect on their position as ASEAN

Secretariat officials responsible only to ASEAN.

9. Each ASEAN Member State undertakes to respect the exclusively ASEAN character

of the responsibilities of the Secretary-General and the staff, and not to seek to influence

them in the discharge of their responsibilities.

ARTICLE 30 => COMMITTEE OF PERMANENT REPRESENTATIVES

TO ASEAN

1. Each ASEAN Member State shall appoint a Permanent

Representative to ASEAN with the rank of Ambassador based in Jakarta.

2. The Permanent Representatives collectively constitute a

Committee of Permanent Representatives, which shall:

(a) support the work of the ASEAN Community

Councils and ASEAN Sectoral Ministerial Bodies;

(b) coordinate with ASEAN National Secretariats and

other ASEAN Sectoral Ministerial Bodies;

(c) liaise with the Secretary-General of ASEAN and the

ASEAN Secretariat on all subjects relevant to its work;

(d) facilitate ASEAN cooperation with external partners; and

(e) perform such other functions as may be determined

by the ASEAN Coordinating Council.

ARTICLE 31 => 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;

(e) promote ASEAN identity and awareness at the national level; and

(f) contribute to ASEAN community building.

ARTICLE 32 => ASEAN HUMAN RIGHTS BODY

1. In conformity with the purposes and principles of the ASEAN Charter relating to the

promotion and protection of human rights and fundamental freedoms, ASEAN shall

establish an ASEAN human rights body.

2. This ASEAN human rights body shall operate in

accordance with the terms of reference to be determined by the

ASEAN Foreign Ministers Meeting.

ARTICLE 33 => ASEAN FOUNDATION

1. The ASEAN Foundation shall support the Secretary-General of

ASEAN and collaborate with the relevant ASEAN bodies to support ASEAN community

building by promoting greater awareness of the ASEAN identity, people-to-people

interaction, and close collaboration among the business sector, civil society,

academia and other stakeholders in ASEAN.

2. The ASEAN Foundation shall be accountable to the

Secretary-General of ASEAN, who shall submit its report to the

ASEAN Summit through the ASEAN Coordinating Council.

ASEAN HEAD OF DEPARTMENT:

Source: David Irvine (1983). Making haste less slowly: Asean from 1975. In Alison Broinski (edt. Understanding Asean. London: Macmillan Press Ltd. pg 60

ENTITIES ASSOCIATED WITH ASEAN:

1. ASEAN may engage with entities which support the ASEAN Charter, in particular

its purposes and principles. These associated entities are listed in Annex

2. Rules of procedure and criteria for engagement shall be prescribed by the

Committee of Permanent Representatives upon the recommendation of the Secretary-

General of ASEAN.

3. Annex 2 may be updated by the Secretary-General of ASEAN upon the

recommendation of the Committee of Permanent Representatives without recourse to the

provision on Amendments under this Charter.

ARTICLE 34 => Parliamentarians

ASEAN Inter-Parliamentary Assembly (AIPA)

ARTICLE 35 => Business Organisations

• ASEAN Airlines Meeting

• ASEAN Alliance of Health Supplement Association (AAHSA)

• ASEAN Automotive Federation (AAF)

• ASEAN Bankers Association (ABA)

• ASEAN Business Advisory Council (ASEAN-BAC)

• ASEAN Business Forum (ABF)

• ASEAN Chamber of Commerce and Industry (ASEAN-CCI)

• ASEAN Chemical Industries Council

• ASEAN Federation of Textiles Industries (AFTEX)

• ASEAN Furniture Industries Council (AFIC)

• ASEAN Insurance Council (AIC)

• ASEAN Intellectual Property Association (ASEAN IPA)

• ASEAN International Airports Association (AAA)

• ASEAN Iron & Steel Industry Federation

• ASEAN Pharmaceutical Club

• ASEAN Tourism Association (ASEANTA)

• Federation of ASEAN Economic Associations (FAEA)

• Federation of ASEAN Shippers’ Council

• US-ASEAN Business Council

ARTICLE 36 => Think Tanks and Academic Institution

ASEAN-ISIS Network

ARTICLE 37 => ASEAN-Accredited Civil Society Organisations (CSOs)

Activities of ASEAN Accredited CSOs

AFA Dialogue with International Federation of Accountants Compliance Advisory Panel

(IFAC CAP), Bangkok, 19 January 2009

Note: The Guidelines were adopted at the 6th Meeting of the ASEAN Coordinating Council (ACC), Ha Noi, 8 April 2010.

• ASEANAPOL

• Federation of Institutes of Food Science and Technology in ASEAN

(FIFSTA)

• Southeast Asian Fisheries Development Centre (SEAFDEC)

• Working Group for an ASEAN Human Rights Mechanism

EXTERNAL RELATIONS:

ARTICLE 38 => CONDUCT OF EXTERNAL RELATIONS

1. ASEAN shall develop friendly relations and mutually

beneficial dialogue, cooperation and partnerships with countries

and sub-regional, regional and international organisations and

institutions.

2. The external relations of ASEAN shall adhere to the

purposes and principles set forth in this Charter.

3. ASEAN shall be the primary driving force in regional arrangements that it initiates

and maintain its centrality in regional cooperation and community building.

4. In the conduct of external relations of ASEAN, Member

States shall, on the basis of unity and solidarity, coordinate and

endeavour to develop common positions and pursue joint actions.

5. The strategic policy directions of ASEAN’s external

relations shall be set by the ASEAN Summit upon the

recommendation of the ASEAN Foreign Ministers Meeting.

6. The ASEAN Foreign Ministers Meeting shall ensure

consistency and coherence in the conduct of ASEAN’s external relations.

7. ASEAN may conclude agreements with countries or subregional,

regional and international organisations and institutions. The procedures for concluding

such agreements shall be prescribed by the ASEAN Coordinating Council in

consultation with the ASEAN Community Councils.

ARTICLE 39 => DIALOGUE COORDINATOR

1. Member States, acting as Country Coordinators, shall take turns to take overall

responsibility in coordinating and promoting the interests of ASEAN in its relations with

the relevant Dialogue Partners, regional and international organisations and institutions.

2. In relations with the external partners, the Country Coordinators shall, inter alia:

(a) represent ASEAN and enhance relations on the

basis of mutual respect and equality, in conformity with ASEAN’s principles;

(b) co-chair relevant meetings between ASEAN and external partners; and

(c) be supported by the relevant ASEAN Committees in

Third Countries and International Organisations.

ARTICLE 40 => STATUS OF EXTERNAL PARTIES

1. In conducting ASEAN’s external relations, the ASEAN

Foreign Ministers Meeting may confer on an external party the

formal status of Dialogue Partner, Sectoral Dialogue Partner,

Development Partner, Special Observer, Guest, or other status

that may be established henceforth.

2. External parties may be invited to ASEAN meetings or

cooperative activities without being conferred any formal status,

in accordance with the rules of procedure.

ASEAN–India Free Trade Area :

Asean, India, Manmohan Singh, Japan, Yukio Hatayama, East Asia Summit, India-Asean Round

Table, Thailand : http://www.thehindu.com

IN WITNESS WHEREOF, WE have signed this Framework Agreement on Comprehensive

Economic Cooperation between the Republic of India and the Association of South East Asian Nations.

DONE at Bali, this 8th day of October, 2003 in duplicate copies in the English Language.

Description for the Following image:

India ready to sign FTA in Services, Investment with ASEAN: PM

Manmohan to hold talks with Wen November 18, 2012

The ASEAN–India Free Trade Area (AIFTA) is a free trade area among the ten

member states of the Association of Southeast Asian Nations (ASEAN) and India. The

initial framework agreement was signed on 8 October 2003 in Bali, Indonesia. and the

final agreement was on 13 August 2009. The free trade area came into effect on

1st January 2010. India hosted the latest ASEAN-India Commemorative Summit in New

Delhi on December 20–21, 2012.

ARTICLE 41 => Background

The ASEAN–India Free Trade Area emerged from a mutual interest of both parties to

expand their economic ties in the Asia-Pacific region. India's "Look East" policy was

reciprocated by similar interests of many ASEAN countries to expand their interactions

westward.

After India became a sectoral dialogue partner of ASEAN in 1992, India saw its trade with

ASEAN increase relative to its trade with the rest of the world. Between 1993 and 2003,

ASEAN-India bilateral trade grew at an annual rate of 11.2%, from US$ 2.9 billion in 1993

to US$ 12.1 billion in 2003. Much of India's trade with ASEAN is directed towards

Singapore, Malaysia, and Thailand, with whom India holds strong economic relations.

In 2008, the total volume of ASEAN-India trade was US$ 47.5 billion. ASEAN’s export to

India was US$ 30.1 billion – a growth of 21.1 per cent in comparison with that of 2007.

ASEAN’s imports from India were US$ 17.4 billion – a growth of 40.2 per cent in

comparison to that of 2006. As for foreign direct investment (FDI), the inflow from India to

ASEAN Member States was US$ 476.8 million in 2008, accounting for 0.8 per cent of total

FDI in the region. Total Indian FDI into ASEAN from 2000 to 2008 was US$ 1.3 billion.

The ASEAN-Dialogue Partners trade and investment statistic data can be accessed through

http://www.asean.org/22122.htm.

Acknowledging this trend and recognising the economic potential of closer linkages, both

sides recognised the opportunities for deepening trade and investment ties, and agreed to

negotiate a framework agreement to pave the way for the establishment of an ASEAN–India

Free Trade Area (FTA).

ARTICLE 42 => History

At the Second ASEAN-India Summit in 2003, the ASEAN-India Framework Agreement on

Comprehensive Economic Cooperation was signed by the Leaders of ASEAN and India. The

Framework Agreement laid a sound basis for the eventual establishment of an ASEAN-India

Regional Trade and Investment Area (RTIA), which includes FTA in goods, services, and

investment.

ASEAN and India signed the ASEAN-India Trade in Goods (TIG) Agreement in Bangkok

on 13 August 2009, after six years of negotiations. The ASEAN-India TIG Agreement

entered into force on 1 January 2010. The 7th ASEAN-India Summit in Cha-am Hua Hin,

Thailand on 24 October 2009 agreed to revise the bilateral trade target to 70 billion USD to

be achieved in the next two years, noting that the initial target of USD 50 billion set in 2007

may soon be surpassed.

ASEAN-India trade grew at over 22 percent annually during the 2005-2011 period. Trade

between India and ASEAN in 2011-2012 increased by more than 37 percent to $79 billion,

which was more than the target of $70 billion set in 2009.

At the 10th ASEAN-India Summit in New Delhi on December 20, 2012, India and ASEAN

concluded negotiations for FTAs in services and investments. The two sides expect bilateral

trade to increase to $100 billion by 2015, and $200 billion within a decade.

ASEAN and India are also working on enhancing private sector engagement. Details on the

re-activation of the ASEAN-India Business Council (AIBC), the holding of the ASEAN-

India Business Summit (AIBS) and an ASEAN-India Business Fair (AIBF), are being

worked out by officials.

The Fourteenth ASEAN Transport Ministers (ATM) Meeting on 6 November 2008 in

Makati, Metro Manila, Philippines adopted the ASEAN-India Aviation Cooperation

Framework, which will lay the foundation for closer aviation cooperation between ASEAN

and India. The ASEAN-India Air Transport Agreement (AI-ATA) is being negotiated with

the implementation timeline of 2011.

ARTICLE 43 => Tariffs

The signing of the ASEAN-India Trade in Goods Agreement paves the way for the creation

of one of the world’s largest FTAs – a market of almost 1.8 billion people with a combined

GDP of US$ 2.8 trillion. The ASEAN-India FTA will see tariff liberalization of over 90

percent of products traded between the two dynamic regions, including the so-called “special

products,” such as palm oil (crude and refined), coffee, black tea and pepper. Tariffs on over

4,000 product lines will be eliminated by 2016, at the earliest.

ARTICLE 44 => Criticism

While there are many benefits to the ASEAN-India FTA, there is concern in India that the

agreement will have several negative impacts on the economy. As previously stated, the two

regions aim to reduce their tariffs on a majority of their traded goods. This will allow them to

increase the market access of their products. It is criticized, however, that India will not

experience as great an increase in market access to ASEAN countries as ASEAN will in

India. The economies of the ASEAN countries are largely export-driven, maintaining high

export-to-GDP ratios (in 2007, Malaysia had a ratio of almost 100%). Considering this, as

well as the global financial crisis and India's expansive domestic market, the ASEAN

countries will look eagerly towards India as a home for its exports.

Since the early 2000s, India has had an increasing trade deficit with ASEAN, with imports

exceeding exports by more than US$6 billion in 2007-2008. It is feared that a gradual

liberalization of traiffs and a rise in imported goods into India will threaten several sectors of

the economy, specifically the plantation sector, some manufacturing industries, and the

marine products industry. As a dominant exporter of light manufacturing products, ASEAN

has competitive tariff rates that make it difficult for India to gain access to the industry

market in ASEAN countries.

Before the agreement was signed, the Chief Minister of Kerala, V.S. Achuthanadan, led a

delegation to the Indian Prime Minister protesting against the FTA. The state of Kerala is an

important exporter in the national export of plantation products. It fears that cheap imports of

rubber, coffee, and fish would lower domestic production, adversely affecting farmers and

ultimately its economy. Kerala has already experienced a flooding of its market with

inexpensive imports under the South Asia Free Trade Agreement of 2006. Cheap coconuts

from Sri Lanka and palm oil from Malaysia has since hindered Kerala's coconut cultivation.

To alleviate the losses that arise from the initial stages of trade, the Government of India

must be able to effectively redistribute some of the wealth to those industries who suffer

from the increased competition with ASEAN markets. This way, total welfare gains in India

would increase and India would ultimately benefit from trade with ASEAN.

CONCLUSION:

To ensure political condition of Southeast Asia, ASEAN has struggled to implement various

efforts even though the implementation was little bit slowly. This show ASEAN spirit and

sense of belongings as what been stated by former Malaysia

Prime Minister Tun Dr. Mahathir Mohammad and it is the secret of ASEAN successful by

holding on 5 Cs which are Consolidation, Consultation, Consensus, Caring and Cornerstone.

Consultation is one way of decision making among ASEAN countries’ leader with frequent

contact and negotiation to gain Consensus or collective agreement in every decision made.

Caring is a concern feeling and each ASEAN country need to has high spirit and always

think about ASEAN interest besides their individual needs. Cornerstone is the direction that

is needs every ASEAN country to establish their foreign policy as an ASEAN country based

on ASEAN spirit.

Consolidation or unity required all ASEAN countries to unite in any action taken. ASEAN

was born while the world is having tension in Cold War and unsecured security. Because of

this, it has made ASEAN busy in political problems. Even though ASEAN countries possess

different strategic and security perspective, ASEAN unity has manage to come with big

success in creating peace. It can be seen when ZOPFAN concept was declared during

ASEAN Head of State Summit in Kuala Lumpur in 1971. The treaty based on sovereignty

respect principles of other countries, non-intervention on internal affairs, to solve regional

internal issues with peace and effective cooperation. The treaty also had come out with code

of conduct of peaceful solution for every conflict based on ASEAN principles as conflict

solving mechanism. Until now, ZOPFAN concept manage to be the only applied regional

diplomatic tool in providing mechanism and process for peaceful solution in any dispute.

ASEAN was not the organization or body to establish cooperation among Southeast Asia

countries but has become an important society to East Asia countries. Moreover, ASEAN

and East Asia are also defending their interest and direction and working together to increase

regional economic integration. In order to measure the effectiveness of economic

development, ASEAN needs several solid strategies to ensure member countries to enhance

their economic level accordance to ASEAN direction to prosperous regional economy. By

making China and Japan that have rapid growth in economy, it is an advantage for ASEAN

to develop cooperation and maintaining peace among member countries. With constructive

experiences and principles accepted by regional countries, ASEAN become stronger in

establishing stability and prosperous according to their own mould.

After 40 years, many consider ASEAN to be very successful in part because of the ongoing

stability in the region. Instead of worrying about military conflict, its member countries have

been able to focus on development of their political and economic systems.

The group has also made a strong stance against terrorism with regional partner, Australia. In

the wake of the terrorist attacks in Bali and Jakarta in the past eight years, ASEAN has

refocused its efforts to prevent incidents and capture perpetrators.

In November 2007 the group signed a new charter that established ASEAN as a rule-based

entity that would promote efficiency and concrete decisions rather than simply a large

discussion group it has sometimes been labeled. The charter also commits members to

advocate democratic ideals and human rights.

ASEAN is often criticized for saying on the one hand that democratic principles guide them,

while on the other allowing human rights violations to occur in Myanmar, and socialism to

rule in Vietnam and Laos. Protesters of free market who fear the loss of local jobs and

economies have appeared all over the region, most notably at the 12th ASEAN summit in

Cebu in the Philippines.

Despite any objections, ASEAN is well on its way to full economic integration and is making

great strides to fully assert itself on the world market.

BIBLIOGRAPHY:

Reference book

Dr. G. K. KalKoti

Dr. G. Rajalakshmy

on the Web

ASEAN Official Site http://www.asean.org/22122.htm. http://www.asil.org/aseanevent/sim_intro_to_asean.pdf http://www.asean.org/archive/publications/ASEAN-Charter.pdf http://commerce.nic.in/agree_asean.htm

http://www.thehindu.com

Suggested Reading

The United Nations

Commonwealth of Nations Introduction to the ASEAN Economic Community - International Law Office

THANK YOU !!!