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Open Regionalism and Deeper Integration: The Implementation of ASEAN Investment Area (AIA) and ASEAN Free Trade Area (AFTA)

Part 23

No reservation may be made with respect to any of the provisions of this agreement. However, the agreement is stated to be without prejudice to any existing or future bilateral or multilateral agreement entered into by member countries or the national laws of each member country relating to the protection and enforcement of intellectual property rights(144) . This provision weakens the agreement, and it seems to be inferior both to national laws and international agreements concluded by ASEAN countries. The agreement has no MFN provision, but ASEAN countries are in any case bound by the MFN obligation in the TRIPs agreement.

A Programme of Action was agreed for 1996-1998 to begin to implement the ASEAN Framework Agreement on IP Co-operation, through ASEAN Working Group on Intellectual Property Co-operation (AWGIPC) under the purview of SEOM. Activities in the Programme of Action include studying the feasibility of utilising the ASEANWEB for IP, setting up ASEAN electronic database on patent, design, geographical indication and trademark, facilitation of information exchange on the procedures, practices and administration among ASEAN IP offices, networking of institutes offering IP training course and exchange of personnel.

This summary of the IP agreement reflects its legal weakness. The agreement is a co-operation scheme, it is not per se a legal binding instrument for implementation of ASEAN harmonised regulations on IP even though the agreement aims to develop co-operation among ASEAN countries on IP laws.

In fact, the agreement is only a statement of intention of the ASEAN countries to co-operate on IP laws and enforcement and protection of IP rights. The loose form of the agreement is typical of all ASEAN agreements. There is no specific time-frame, nor any detailed provisions for implementing the agreement.

The second point is that the agreement has no priority, as it does not affect either existing or future agreements of ASEAN member countries. Furthermore, the agreement is subordinate to national law(145) . This shows the reluctance of ASEAN countries to regionalise this area of laws.

The third point is the lack of sufficient mechanisms and institutional arrangements. The implementation of the agreement relies on temporarily set up forums, a Group of experts and a Forum of representatives of the member countries, and they report to the SEOM and the ASEAN Secretariat. There is no permanent institution or mechanism to operate and implement the agreement officially. No officials or specialists have been appointed to help facilitate the process of harmonisation or mutual recognition of the ASEAN countries' laws on IP, so it is unrealistic to expect the development of an ASEAN system of such laws or of ASEAN standards and practices on IP.

The fourth point is the lack of a dispute settlement mechanism. The agreement just relies on amicable settlement and consultation between the member countries for disputes arising from the differences in interpretation and applications of the agreements.

Therefore, ASEAN needs to elaborate more specific and detailed agreements with specified time-frames and efficient mechanisms. ASEAN needs to further strengthen its institutional and legal framework for implementing the objectives of these new agreements. The most important issue is to cultivate political will supporting regional integration. ASEAN should be more realistic than rhetorical, as it has been over the past decades. The following section will discuss patterns of regionalisation and consider the direction of ASEAN integration.

The Complementarity between ASEAN Regionalism, APEC Liberalisation, and Global Liberalisation

ASEAN regionalism is quite different from the conventional regionalism implemented elsewhere. As stated earlier and also in various studies on this issue, such as Pelkmans (1997: 199-243), ASEAN integration schemes are not about integration among ASEAN members for forming a "closed or discriminatory trading bloc", but rather a way for ASEAN countries to co-operate to increase their international competitiveness and integration with the world. In this sense, the ultimate objective of ASEAN regionalism is to increase the region's competitive edge as a production base geared toward the global market (ASEAN Secretariat, 1995: 1). On the other hand, ASEAN integration is a means to create an enlarged regional market for attracting inflows of trade and investment. This is because the economies of scale generated by ASEAN integration have enhanced its attractiveness as an investment location or a production platform for global markets as well as the regional market. Economic integration in ASEAN is largely market driven, so ASEAN does not focus solely on the region but is also globally oriented. It is clear that AFTA, AIA, and AFAS are driven primarily by the recognition by ASEAN of the necessity to continue to sharpen its international competitiveness. Therefore, ASEAN states are integrating among themselves in order to integrate with the world, and AFTA, AIA, as well as AFAS would be a means for achieving this.

Thus, it is not surprising that the rationale of ASEAN integration is not primarily to pursue a rising share of intra-regional trade in its total trade, but rather to develop the free flow of goods and mobilisation of investment intra-ASEAN. In consequence, it facilitates a further degree of market integration so that ASEAN would be increasingly attractive as an area of trade and investment in the global economy. This is the meaning of the "Open Regionalism" approach adopted by ASEAN. Pelkmans explains the term as follows:

"Open Regionalism means that regional economic intercourse is to be promoted if and only if it is consistent with GATT/WTO and not to the detriment of other economies" (Pelkmans, 1997: 226).

AFTA, AIA and AFAS would be major instruments to facilitate the trade and production linkage within the region and with the world through TNC networks located regionally and globally. As discussed earlier in relation to each ASEAN scheme, liberalisation is realised regionally and internationally through liberal rules of establishment under AIA, and for commercial presence (ASEAN service provider) under AFAS, as well as the ASEAN rule of origin under AFTA that facilitates trade flows from outside into ASEAN. These new ASEAN schemes clearly facilitate and balance ASEAN regional integration and globalisation. Therefore, ASEAN integration is implemented consistently and complementarily with the WTO rules and obligations as it encourages free trade and liberalises investment at regional and international level.

Part 24


(144) Art. 6 of the ASEAN Framework Agreement on Intellectual Property Co-operation.

(145) Art. 6 of the Agreement on IP co-operation.