Page 18 - ASEAN-EU Dialogue 2018: Regional and Inter-Regional Economic Cooperation: Identifying Priorities for ASEAN and the EU

So, the phenomenon which was one of the initial triggers of trade liberalisation and regional
economic integration became active in ASEAN at a later stage and is more active today than
ever before. Establishment of AFTA, FTAs with external players such as China and India,
Japan, Korea and others have accelerated this process. The RCEP and AEC have a key role to
play in that regard.

Second parameter is the institutional mechanism. EU has many institutional mechanisms with
a powerful secretariat. ASEAN, however, does not have a strong centralised mechanism. EU’s
foremost priority has been to integrate policy responses through policy synchronisation among
members first and then reach out to external players. There is huge disparity among ASEAN
member states in that regard. Additionally, ASEAN before integrating amongst themselves
first, began to engage dialogue partners. Through its long history, the EU has established a
strong institutional mechanism, such as its own Constitution, Parliament with parliament
members, and a common currency; whereas in the light of the diversity of ASEAN in terms of
economic standards and social systems, a strong and binding structure would face opposition
from member states (Sanake, 2017).

Third parameter with regard to a comparative study of ASEAN and the EU is the crises
management and lessons learnt. Both these regional groupings begun the process of greater
trade liberalisation, regional economic integration and move towards greater regional economic
governance after they faced massive economic crises in their respective regions. So, in case of
ASEAN, after the Asian financial crisis, the efforts on part of the ASEAN countries to move
towards establishing stronger institutional mechanisms for trade liberalisation and regional
economic integration could be noticed. The ASEAN Plus three, AEC, and over the years the
efforts to move towards the RCEP where economies are much more diverse, and in some cases
much more competitive and bigger than the rest. In case of Europe, the 2008 crisis led to the
birth of the European Stability mechanism.

The fourth parameter is: Dealing with intra-regional disparities and taking care of the
vulnerable sectors. Considering the diversity in the political and economic governance
structures of member countries of ASEAN, non-tariff barriers are likely to remain a key
challenge, of which there is no easy solution in the foreseeable future. In case of the EU, it has
pursued an open trade agenda for the past several decades. In 2016, the EU accounted for
almost 17 percent of total world trade in goods and services. If the liberalisation of tariff
structures and non-tariff barriers are considered, it is clear that the degree of EU liberalisation
in comparison with others is far wider and greater.

An important sector in trade liberalisation in the EU is agriculture. In case of ASEAN countries
that has been a touchy issue. Countries such as Myanmar, Cambodia, and Laos, and even
Indonesia and Malaysia are not favourable to a blanket liberalisation on agricultural products.

The final parameter is the people’s perception and the consumer’s perspective. Any discussion
on trade policies in general and specifically on trade liberalisation is incomplete without trying
to make sense of what the common people think. This is more important in case of developing
countries which have democratic electoral system in place. And on that count, both in the EU
and ASEAN region, the perceptions have not been overwhelmingly positive. According to a
study conducted by the European Commission in 2010, only 44 percent of Europeans think
that they benefitted from more open trade with other countries and regions. In case of ASEAN,
the percentage would be far higher than the EU, which can also be sensed from the fact that

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