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Mutual benefits?

Asean

Asean will never be the same again. At a summit beginning on Sunday, in Singapore, leaders of the 10 member states of the Association of Southeast Asian Nations are scheduled to sign a charter laying out binding commitments to an integrated community by 2015.

Once leaders put their signatures to the document, Asean will legally become an official organisation able to attend, for example, diplomatic meetings.

Since its inception in 1967, Asean has been legally invisible. This reflects the founding preference for flexibility and consensus in place of binding commitments and institutions. But this approach is inadequate for the economic and political challenges it now faces.

Hence the charter. Expectations are high that it will introduce rules, binding resolutions and possibly majority voting on some issues, enabling Asean to move forward even if some states disagree. There are already tentative signs that the bare bones of the secretariat in Jakarta will be beefed up.

Member states are going to send permanent ambassadors there, while the secretary general will be empowered to push the agenda and keep plans on track.

The most significant, complex and ambitious part of the plan is economic integration. Asean is promising to let goods, services and investment flow freely. Some of these ideas have been around since the mid-1990s but suffer from half-baked implementation. The secretariat's website last updated progress on free trade and investment in September 1999.

There has been some progress since then, however. Tariffs have tumbled to less than 5 per cent for most goods traded among Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, Asean's original free-market economies. But, in practice, exporters are often put off by the onerous conditions and paperwork.

If this were not enough, Asean will also hold summit meetings concurrently with China, South Korea and Japan, which together make up the 'Asean plus three' ad hoc group. Later, Australia, India and New Zealand will sit down with them for 'Asean plus six'.

Finally, Asean is due to meet three states representing the European Union, although if Myanmar's delegate insists on attending, the Europeans may pull out in protest over the Myanmese junta's recent harsh crackdown on demonstrators.

Perhaps the most important partner is China, whose interests have risen along with its purchases of gas, minerals and palm oil from Southeast Asia. China is almost certainly the largest investor and biggest influence on Cambodia, Laos and Myanmar. It might, in due course, take a similar position in Indonesia and the Philippines.

China has trumped its peers by treating Asean as an equal on the diplomatic stage, while working extremely hard to tighten bilateral political and commercial relations with key members.

Nevertheless, feelings are mixed within the grouping. Some see China as a competitor, others as an opportunity. The latter view seems to prevail, for now, resulting in a rush to implement the China-Asean free-trade area by 2010.

But the former view may be gaining currency, not least because the mainland's manufacturers are producing more intermediate electronic components which compete against key imports from Southeast Asia.

Growing trade and increasing competition from China and its rivals -India, South Korea and Japan - is also changing Asean members' interests and altering the currents of influence.

If Asean members fail to present a strong front, the group could wither to irrelevance.

Most observers remain sceptical. Asean is preceded by its reputation for saying all the right things but doing little. Commercial interests would probably be happier to see strong action on harmonisation of product and regulatory standards across Asean - with efficient, honest customs - as a first step, instead of grand gestures and big ideas.

Making Asean work and building some much-needed credibility is not going to be cheap. For starters, members need to show a resolute commitment to binding regulations and negotiate as a group rather than bilaterally. If the charter and other promises and declarations - such as those about the environment, which will feature strongly at the summit - are not matched by substantial budgets, expectations will doubtless fade.

Big budgets are needed to establish an Asean civil service immune from corruption and to develop an Asean expressway and high-capacity rail network to help open up and integrate newer, poorer members.

It would be premature to write off Asean, given the potential that lies within its 550 million people. But the past does not inspire.

David Fullbrook is a freelance writer and political analyst

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