Eria and Asean provide a model

To their credit, Asean governments and officials sought honest assessment rather than comfort in distorted data. ERIA was commissioned to conduct a Mid-Term Review of the AEC. It constructed a “scorecard”, which is not a checklist of declared objectives but a genuine scrutiny of what was intended, a careful review of whether declared intentions have been implemented, and an assessment of whether expected economic outcomes are being realised.

The resulting review provides a generally positive assessment of how the AEC will be in place in 2015. There will be gaps, and governments have been given guidance on what should be priorities.

This exercise has interesting implications. It shows that reaching a desired end does not depend on an external agency able to impose sanctions. Learning from European experience requires effort, and notions that Asean is copying the EU are simplistic. Nobody can look at European experience in recent years and think that making obligations subject to supranational monitoring guarantees implementation. What is important is not declarations and agreements, but commitment to shared objectives and frequent discussion of how barriers to implementation can be overcome, including through cooperation. The “Asean Way” has a great future.

Secondly, engagement of an independent but “inside” agent like ERIA can reconcile technocratic expertise with democratic control. Asean governments retain control and answer directly to their electorates. “Track 1.5” ERIA benefits from official information and respects confidentiality, but informs governments, officials and the public about where expectations are not being realised and what can be done about it.

There are many areas of economic diplomacy where a similar mechanism could be useful. An especially important one is in relation to accession clauses in plurilateral agreements. At present we are relying on forming groups that are not closed but promise to welcome new members. The idea that rules can be written and then membership be accorded to any economy willing to accept their applicability is not workable. Any major economy, and most minor ones, will have some features that require serious consideration of how rules should be applied. The existing P4 agreement among Brunei, Chile, New Zealand and Singapore has a “clean” accession clause; the succession of TPP negotiating rounds shows what the US thought of simply accepting existing rules.

No major economy will accept that it should be subject to a veto by any existing member as it adjusts it own arrangements to conform with membership requirements. And yet that is what is envisaged. We will not get to the desired end point of a set of plurilateral agreements that preserve as much multilateralism as possible if we persist with current plans.

Asean has shown a way forward. Make the process of entry as technocratic as possible by engaging a Track 1.5 institution like ERIA to assess whether an applicant is indeed reforming its own institutions and processes in a sensible way so as to satisfy the collective’s ambitions. There will still be plenty of room for political debate, but it will be constrained.

More than accession clauses is at stake, important though they are. Designing standards so that they promote inter-operability and innovation, and are not mechanisms for disguised protectionism, similarly requires a distinction between technocratic expertise and political advocacy. This is important for helping SMEs to participate in international production networks, which are such a prominent part of modern economic integration. Another area calling for technocratic expertise is designing intellectual property rules that facilitate innovation and do not merely extract rents for past contributions. We are unlikely to reach desired ends if we rely on traditional trade negotiators, especially those who are beholden to vested interests.

Managing economic integration in a world of international production networks requires fresh thinking about what is important and how agreements should be formed. Asean and ERIA have shown how to use a Track 1.5 institution.

 

Gary Hawke is foundation head of the School of the Government at Victoria University of Wellington, New Zealand, emeritus professor, and a member of the Academic Advisory Council of ERIA.