Could a ‘Brexit’ style event happen in the AEC?


Could a ‘Brexit’ style event happen in the AEC?

The European Union (EU) was the prototype around which the Asean Economic Community (AEC) was modeled. As Britain, the fifth-largest economy in the world, has now voted to exit the EU, there is speculation that other member states may follow and the entire edifice will come crashing down. How does that prospect play out for the AEC, which only started life on 31 December 2015?

Unlike the EU treaty, the Asean Charter does not provide for the departure of a

member state. Nor does it allow for the expulsion of a member state either.

As well, unlike the EU, Asean’s economic agreements have measures in place which do allow for a member state to retreat in some measure from its commitments as part of the AEC.

As one example, the Asean Trade in Goods Agreement (ATIGA) contains a reciprocity clause that provides that an Asean member can enjoy tariff privileges only to the extent that it provides them to other Asean members. So, an Asean member state could elect to withdraw from its ATIGA commitments, but only on condition that the other ASEAN members do the same.

As well, the current ‘Asean-X’ formula in the Asean Charter, which allows a sub-grouping of Asean members to progress faster with economic integration, could be interpreted to allow a sub-grouping of Asean members to go slower or even withdraw from economic integration. Either way, the wayward Asean member state would still remain within the Asean grouping.

Of course, the recalcitrant member state or states, would eventually have a way to come back within the fold over time, as economic conditions improved or it recognised that being ‘inside the tent’ was better than being effectively outside.

As well, the effect of Brexit could be viewed as a strong motivation to get the AEC agenda right.

Part of this will be to ensure that all member states become convinced that the economic benefits of regional integration are appreciated. This will largely be achieved through the business sector working in harmony with national governments, although cultural, and even religious, differences will take some time to be diluted.

After all, the average Thai national looks down his or her collective nose at neighbours such as Cambodia, Laos and Myanmar, a legacy of hundreds of years of conflict and intermittent control between them; equally, Thailand has had an adversarial relationship with Vietnam for centuries.

So, recalibrating the ingrained psyche of the populations within these mainland Southeast Asian nations is something that’s going to realistically take a generation or more.