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A

Project Report
on

ASEAN

Submitted to: Prepared by:


Dr. Y.C.Joshi Hiral Dalwadi
Jignesh Mistry
Sayooj Shreedharan

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ABSTRACT
ASEAN,Association of SouthEast Asian Nations, is a unique example of regional
co-operation and development. Having come into existence in 1967 with 5 regional
member countries, ASEAN has grown tremendously in the coverage and impact by
including 5 more countries.. The region has population of 560 million. Its combined
gross domestic product exceeded US$1100 billion and a total trade of US$ 1400 billion.
With certain fundamental principles, ASEAN has grown to a greater stature and helped
its member countries immensely in economic growth and development. As a result,
ASEAN vision 2020 was spelt out at Kuala Lapmer in the yaer 1997. On the other,
declaration of ASEAN concord II was spelt out at Bali in 2003.Both these documents
spell out wider vision of co-operation and development for the ASEAN through the
strategy of dialogues and interaction with many countries and economic unions/regional
parts.

In 1994, with the ASEAN launching of ASEAN regional Forum(ARF), there


started close dialogues with all Asia Pacific Region Countries. The present participants
in the ARF include more than 20 countries, satrting from Australia to Canada,from
China to European Union,from India to Russian Federation,from New Zealand to USA.
Thus, ASEAN has evolved very fast fron ASEAN free trade Area(AFTA) agreement to
the ASEAN vision 2020. Now, ASEAN attempts at forging greater economic integration
within the region. More than this, within 3 years, from the launching fo AFTA, exports
among ASAEN countries grew from US$ 43 billion in 1993 to US$ 80 billion in 1996,
nearing doubling the amount. The share of intra regional trade in SEAN total trade rose
from 20% to about 25% and registered average yearly growth rate of 28%.

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INDEX

1. Overview 4

2. History 11

3. Organizational Structure 15

4. ASEAN Trade 17

5. Recent Issues and Concerns 19

6. ASEAN Vision 2020 24

Bibliography 26

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ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)

Overview
ESTABLISHMENT
The Association of Southeast Asian Nations or ASEAN was established on 8
August 1967 in Bangkok by the five original Member Countries, namely, Indonesia,
Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8
January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and
Cambodia on 30 April 1999.
As of 2006, the ASEAN region has a population of about 560 million, a total area
of 4.5 million square kilometers, a combined gross domestic product of almost US$
1,100 billion, and a total trade of about US$ 1,400 billion.

OBJECTIVE

The ASEAN Declaration states that the aims and purposes of the Association
are: (1) to accelerate economic growth, social progress and cultural development in the
region and (2) to promote regional peace and stability through abiding respect for justice
and the rule of law in the relationship among countries in the region and adherence to
the principles of the United Nations Charter.
The ASEAN Vision 2020, adopted by the ASEAN Leaders on the 30th
Anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert of Southeast
Asian nations, outward looking, living in peace, stability and prosperity, bonded together
in partnership in dynamic development and in a community of caring societies. In 2003,
the ASEAN Leaders resolved that an ASEAN Community shall be established
comprising three pillars, namely, ASEAN Security Community, ASEAN Economic
Community and ASEAN Socio-Cultural Community.
FUNDAMENTAL PRINCIPLES
ASEAN Member Countries have adopted the following fundamental principles in
their relations with one another, as contained in the Treaty of Amity and Cooperation in
Southeast Asia (TAC):

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• Mutual respect for the independence, sovereignty, equality, territorial integrity,
and national identity of all nations;
• The right of every State to lead its national existence free from external
interference, subversion or coercion;
• Non-interference in the internal affairs of one another;
• Settlement of differences or disputes by peaceful manner;
• Renunciation of the threat or use of force; and
• Effective cooperation among themselves.

ASEAN SECURITY COMMUNITY


Through political dialogue and confidence building, no tension has escalated into
armed confrontation among ASEAN Member Countries since its establishment more
than three decades ago. To build on what has been constructed over the years in the
field of political and security cooperation, the ASEAN Leaders have agreed to establish
the ASEAN Security Community (ASC). The ASC shall aim to ensure that countries in
the region live at peace with one another and with the world in a just, democratic and
harmonious environment.
The members of the Community pledge to rely exclusively on peaceful processes
in the settlement of intra-regional differences and regard their security as fundamentally
linked to one another and bound by geographic location, common vision and
objectives. It has the following components: political development; shaping and sharing
of norms; conflict prevention; conflict resolution; post-conflict peace building; and
implementing mechanisms. It will be built on the strong foundation of ASEAN
processes, principles, agreements, and structures, which evolved over the years and
are contained in the following major political agreements:
ASEAN Declaration, Bangkok, 8 August 1967; Zone of Peace, Freedom and
Neutrality Declaration, Kuala Lumpur, 27 November 1971; Declaration of ASEAN
Concord, Bali, 24 February 1976; Treaty of Amity and Cooperation in Southeast Asia,
Bali, 24 February 1976; ASEAN Declaration on the South China Sea, Manila, 22 July
1992; Treaty on the Southeast Asia Nuclear Weapon-Free Zone, Bangkok, 15
December 1997; ASEAN Vision 2020, Kuala Lumpur, 15 December 1997; and
Declaration of ASEAN Concord II, Bali, 7 October 2003.
In recognition of security interdependence in the Asia-Pacific region, ASEAN
established the ASEAN Regional Forum (ARF) in 1994. The ARF’s agenda aims to
evolve in three broad stages, namely the promotion of confidence building, development
of preventive diplomacy and elaboration of approaches to conflicts. The present
participants in the ARF include: Australia, Brunei Darussalam, Cambodia, Canada,
China, European Union, India, Indonesia, Japan, Democratic Republic of Korea,
Republic of Korea (ROK), Lao PDR, Malaysia, Mongolia, Myanmar, New Zealand,
Pakistan, Papua New Guinea, the Philippines, the Russian Federation, Singapore,
Thailand, the United States, and Viet Nam. The ARF discusses major regional security
issues in the region, including the relationship amongst the major powers, non-

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proliferation, counter-terrorism, transnational crime, South China Sea and the Korean
Peninsula, among others.

ASEAN ECONOMIC COMMUNITY


The ASEAN Economic Community shall be the end-goal of economic integration
measures as outlined in the ASEAN Vision 2020. Its goal is to create a stable,
prosperous and highly competitive ASEAN economic region in which there is a free flow
of goods, services, investment and a freer flow of capital, equitable economic
development and reduced poverty and socio-economic disparities in year 2020. The
ASEAN Economic Community shall establish ASEAN as a single market and production
base, turning the diversity that characterises the region into opportunities for business
complementation and making the ASEAN a more dynamic and stronger segment of the
global supply chain. ASEAN’s strategy shall consist of the integration of ASEAN and
enhancing ASEAN’s economic competitiveness.
In moving towards the ASEAN Economic Community, ASEAN has agreed on the
following:
• Institute new mechanisms and measures to strengthen the implementation of its
existing economic initiatives including the ASEAN Free Trade Area (AFTA),
ASEAN Framework Agreement on Services (AFAS) and ASEAN Investment
Area (AIA);
• Accelerate regional integration in the following priority sectors by 2010: air travel,
agro-based products, automotives, e-commerce, electronics, fisheries,
healthcare, rubber-based products, textiles and apparels, tourism, and wood-
based products.
• Facilitate movement of business persons, skilled labour and talents; and
• Strengthen the institutional mechanisms of ASEAN, including the improvement of
the existing ASEAN Dispute Settlement Mechanism to ensure expeditious and
legally-binding resolution of any economic disputes.

Launched in 1992, the ASEAN Free Trade Area (AFTA) is now in place. It aims to
promote the region’s competitive advantage as a single production unit. The elimination
of tariff and non-tariff barriers among Member Countries is expected to promote greater
economic efficiency, productivity, and competitiveness.
As of 1 January 2005, tariffs on almost 99 percent of the products in the Inclusion
List of the ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, the Philippines,
Singapore, and Thailand) have been reduced to no more than 5 percent. More than 60
percent of these products have zero tariffs. The average tariff for ASEAN-6 has been
brought down from more than 12 percent when AFTA started to 2 percent today. For
the newer Member Countries, namely, Cambodia, Lao PDR, Myanmar, and Viet Nam
(CLMV), tariffs on about 81 percent of their Inclusion List have been brought down to
within the 0-5 percent range.

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Other major integration-related economic activities of ASEAN include the following:
• Roadmap for Financial and Monetary Integration of ASEAN in four areas,
namely, capital market development, capital account liberalisation, liberalisation
of financial services and currency cooperation;
• Trans-ASEAN transportation network consisting of major inter-state highway and
railway networks, including the Singapore to Kunming Rail-Link, principal ports,
and sea lanes for maritime traffic, inland waterway transport, and major civil
aviation links;
• Roadmap for Integration of Air Travel Sector;
• Interoperability and interconnectivity of national telecommunications equipment
and services, including the ASEAN Telecommunications Regulators Council
Sectoral Mutual Recognition Arrangement (ATRC-MRA) on Conformity
Assessment for Telecommunications Equipment;
• Trans-ASEAN energy networks, which consist of the ASEAN Power Grid and the
Trans-ASEAN Gas Pipeline Projects;
• Initiative for ASEAN Integration (IAI) focusing on infrastructure, human resource
development, information and communications technology, and regional
economic integration primarily in the CLMV countries;
• Visit ASEAN Campaign and the private sector-led ASEAN Hip-Hop Pass to
promote intra-ASEAN tourism; and
• Agreement on the ASEAN Food Security Reserve.

ASEAN SOCIO-CULTURAL COMMUNITY


The ASEAN Socio-Cultural Community, in consonance with the goal set by
ASEAN Vision 2020, envisages a Southeast Asia bonded together in partnership as a
community of caring societies and founded on a common regional identity. The
Community shall foster cooperation in social development aimed at raising the standard
of living of disadvantaged groups and the rural population, and shall seek the active
involvement of all sectors of society, in particular women, youth, and local communities.
ASEAN shall ensure that its work force shall be prepared for, and benefit from,
economic integration by investing more resources for basic and higher education,
training, science and technology development, job creation, and social protection.
ASEAN shall further intensify cooperation in the area of public health, including in the
prevention and control of infectious and communicable diseases.
The development and enhancement of human resources is a key strategy for
employment generation, alleviating poverty and socio-economic disparities, and
ensuring economic growth with equity. Among the on-going activities of ASEAN in this
area include the following:
• ASEAN Work Programme for Social Welfare, Family, and Population;
• ASEAN Work Programme on HIV/AIDS;
• ASEAN Work Programme on Community-Based Care for the Elderly;
• ASEAN Occupational Safety and Health Network;

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• ASEAN Work Programme on Preparing ASEAN Youth for Sustainable
Employment and Other Challenges of Globalisation;
• ASEAN University Network (AUN) promoting collaboration among seventeen
member universities ASEAN;
• ASEAN Students Exchange Programme, Youth Cultural Forum, and the ASEAN
Young Speakers Forum;
• The Annual ASEAN Culture Week, ASEAN Youth Camp and ASEAN Quiz;
• ASEAN Media Exchange Programme; and
• Framework for Environmentally Sustainable Cities (ESC) and ASEAN Agreement
on Transboundary Haze Pollution.

EXTERNAL RELATIONS

• The ASEAN Vision 2020 affirmed an outward-looking ASEAN playing a pivotal


role in the international community and advancing ASEAN’s common interests.
• Building on the Joint Statement on East Asia Cooperation of 1999, cooperation
between the Southeast and Northeast Asian countries has accelerated with the
holding of an annual summit among the leaders of ASEAN, China, Japan, and
the Republic of Korea (ROK) within the ASEAN Plus Three process.
• ASEAN Plus Three relations continue to expand and deepen in the areas of
security dialogue and cooperation, transnational crime, trade and investment,
environment, finance and monetary, agriculture and forestry, energy, tourism,
health, labour, culture and the arts, science and technology, information and
communication technology, social welfare and development, youth, and rural
development and poverty eradication. There are now thirteen ministerial-level
meetings under the ASEAN Plus Three process.
• Bilateral trading arrangements have been or are being forged between ASEAN
Member Countries and China, Japan, and the ROK. These arrangements will
serve as the building blocks of an East Asian Free Trade Area as a long term
goal.
• ASEAN continues to develop cooperative relations with its Dialogue Partners,
namely, Australia, Canada, China, the European Union, India, Japan, the ROK,
New Zealand, the Russian Federation, the United States of America, and the
United Nations Development Programme. ASEAN also promotes cooperation
with Pakistan in some areas of mutual interest.
• Consistent with its resolve to enhance cooperation with other developing regions,
ASEAN maintains contact with other inter-governmental organisations, namely,
the Economic Cooperation Organisation, the Gulf Cooperation Council, the Rio
Group, the South Asian Association for Regional Cooperation, the South Pacific
Forum, and through the recently established Asian-African Sub-Regional
Organisation Conference.
• Most ASEAN Member Countries also participate actively in the activities of the
Asia-Pacific Economic Cooperation (APEC), the Asia-Europe Meeting (ASEM),
and the East Asia-Latin America Forum (EALAF).

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STRUCTURE AND MECHANICS

• The highest decision-making organ of ASEAN is the Meeting of the


ASEAN Heads of State and Government. The ASEAN Summit is convened
every year. The ASEAN Ministerial Meeting (Foreign Ministers) is held
annually.
• Ministerial meetings on the following sectors are also held regularly: agriculture
and forestry, economics (trade), energy, environment, finance, health,
information, investment, labour, law, regional haze, rural development and
poverty alleviation, science and technology, social welfare, telecommunications,
transnational crime, transportation, tourism, youth. Supporting these ministerial
bodies are committees of senior officials, technical working groups and task
forces.
• To support the conduct of ASEAN’s external relations, ASEAN has established
committees composed of heads of diplomatic missions in the following capitals:
Beijing, Berlin, Brussels, Canberra, Geneva, Islamabad, London, Moscow, New
Delhi, New York, Ottawa, Paris, Riyadh, Seoul, Tokyo, Washington D.C. and
Wellington. The Secretary-General of ASEAN is appointed on merit and
accorded ministerial status. The Secretary-General of ASEAN, who has a five-
year term, is mandated to initiate, advise, coordinate, and implement ASEAN
activities. The members of the professional staff of the ASEAN Secretariat are
appointed on the principle of open recruitment and region-wide competition.
• ASEAN has several specialized bodies and arrangements promoting inter-
governmental cooperation in various fields including the following: ASEAN
Agricultural Development Planning Centre, ASEAN-EC Management Centre,
ASEAN Centre for Energy, ASEAN Earthquake Information Centre, ASEAN
Foundation, ASEAN Poultry Research and Training Centre, ASEAN Regional
Centre for Biodiversity Conservation, ASEAN Rural Youth Development Centre,
ASEAN Specialized Meteorological Centre, ASEAN Timber Technology Centre,
ASEAN Tourism Information Centre, and the ASEAN University Network.
• In addition, ASEAN promotes dialogue and consultations with professional and
business organizations with related aims and purposes, such as the ASEAN-
Chambers of Commerce and Industry, ASEAN Business Forum, ASEAN Tourism
Association, ASEAN Council on Petroleum, ASEAN Ports Association,
Federation of ASEAN Ship owners, ASEAN Confederation of Employers, ASEAN
Fisheries Federation, ASEAN Vegetable Oils Club, ASEAN Intellectual Property
Association, and the ASEAN-Institutes for Strategic and International Studies.
Furthermore, there are 58 Non-Governmental Organizations (NGOs), which have
formal affiliations with ASEAN.

Basic Philosophy

Development is by definition a process by which a societal problem is to be


solved by implementing a systematic and well-defined change process. An approach of
addressing issues and solving problems through development activities is often referred

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to as carrying out “development intervention”. Outcomes of a development intervention
are typically measured by the impacts that it produces in providing solutions to the
problem being addressed. In ASEAN development cooperation, the same basic
philosophy is used. Regional development activities carried out under ASEAN
cooperation are always aimed at addressing regional problems and issues through
development interventions which are best carried out at the regional level. As ASEAN
represents the interest of its Member Countries as a group, development intervention
carried out at the regional level would naturally have to suit the needs of the group
without duplicating efforts that can be better implemented at the national or local levels.
In this context a regionality criteria has become very useful in checking if an idea for a
regional development intervention is truly region.

There are two primary criteria that can be used to examine if a given problem is truly
regional:

a. The problem or need is regional, and not national by definition: which means that the
problem exists above the national level.
An example of a regional problem according to these criteria would be a question of:
“How should import tariffs in all Member Countries be adjusted and coordinated as to
allow more flow of goods among them taking advantage of the larger market size of all
the Countries combined?” More flow of goods in a larger market would make
production more efficient and make the region more competitive. But, to achieve it each
country cannot act alone or even in pairs, but would have to work together as a group.
The solution to the problem would be for all Member Countries to jointly develop
regional trade scheme and coordinate the implementation of consistent import tariff
structures for the scheme. The development intervention would be to carry out
exercises to initiate the chain or sub-chain of processes from the development of the
tariff scheme, development of harmonized tariff nomenclature, translation of the scheme
into binding agreements, and implementation of the agreement in the field.

b. The problem or need requires regional cooperation in order to bring about a solution.
An example of a regional problem which requires regional cooperation to solve would
be a question of: “How to improve the efficiency and use values of the natural resource
products from ASEAN countries by eliminating trade of illegally harvested low-priced
commodities?” More efficient use of ASEAN’s natural resources would ensure longer-
lasting comparative and competitive advantages of the region. The solution to the
problem would be for all Member Countries to apply consistent trade regime to prevent
the sale of illegally harvested products, and to share the benefit together. The
development intervention would be to carry out exercises to initiate the chain or sub-
chain of processes from the mutual recognition of the legally harvested products,
applying consistent and sharing the cost of enforcements against illegal products,
spreading the production and market incentives for trading legal products only.

In the actual project development stage, some regional problems would often
come to a surface as a result of the lack of options to solve the problems at national or

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local levels. Problems such as trans-boundary haze from land fires, or pressures
against regional currencies, for example, cannot be effectively dealt but through
regional cooperation.

HISTORY
The Founding of ASEAN:
On 8 August 1967, five leaders - the Foreign Ministers of Indonesia, Malaysia,
the Philippines, Singapore and Thailand - sat down together in the main hall of the
Department of Foreign Affairs building in Bangkok, Thailand and signed a document. By
virtue of that document, the Association of Southeast Asian Nations (ASEAN) was born.
The five Foreign Ministers who signed it - Adam Malik of Indonesia, Narciso R. Ramos
of the Philippines, Tun Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and
Thanat Khoman of Thailand - would subsequently be hailed as the Founding Fathers of
probably the most successful inter-governmental organization in the developing world
today. And the document that they signed would be known as the ASEAN Declaration.
It was a short, simply-worded document containing just five articles. It declared
the establishment of an Association for Regional Cooperation among the Countries of
Southeast Asia to be known as the Association of Southeast Asian Nations (ASEAN)
and spelled out the aims and purposes of that Association. These aims and purposes
were about cooperation in the economic, social, cultural, technical, educational and
other fields, and in the promotion of regional peace and stability through abiding respect
for justice and the rule of law and adherence to the principles of the United Nations
Charter. It stipulated that the Association would be open for participation by all States in
the Southeast Asian region subscribing to its aims, principles and purposes. It
proclaimed ASEAN as representing "the collective will of the nations of Southeast Asia
to bind themselves together in friendship and cooperation and, through joint efforts and
sacrifices, secure for their peoples and for posterity the blessings of peace, freedom
and prosperity."

Yet it was by no means an easy process: each man brought into the
deliberations a historical and political perspective that had no resemblance to that of
any of the others. But with goodwill and good humor, as often as they huddled at the
negotiating table, they finessed their way through their differences as they lined up their
shots on the golf course and traded wisecracks on one another's game, a style of
deliberation which would eventually become the ASEAN ministerial tradition.
The fragmented economies of Southeast Asia,(with) each country pursuing its
own limited objectives and dissipating its meager resources in the overlapping or even
conflicting endeavors of sister states carry the seeds of weakness in their incapacity for
growth and their self-perpetuating dependence on the advanced, industrial nations.
ASEAN, therefore, will marshal the still untapped potentials of this rich region through
more substantial united action. The countries of Southeast Asia should also be willing
to take responsibility for whatever happens to them, vision of an ASEAN was to include

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all the countries of Southeast Asia. The countries of the region should recognize that
unless they assumed their common responsibility to shape their own destiny and to
prevent external intervention and interference, According to the members Southeast
Asia would remain fraught with danger and tension. And unless they took decisive and
collective action to prevent the eruption of intra-regional conflicts, the nations of
Southeast Asia would remain susceptible to manipulation, one against another.
The goal of ASEAN, then, was to create, not to destroy. The countries of
Southeast Asia had no choice but to adjust to the exigencies of the time, to move
toward closer cooperation and even integration. Elaborating ASEAN objectives,
"Building a new society that will be responsive to the needs of our time and efficiently
equipped to bring about, for the enjoyment and the material as well as spiritual
advancement of our peoples, conditions of stability and progress. Particularly what
millions of men and women in our part of the world want is to erase the old and obsolete
concept of domination and subjection of the past and replace it with the new spirit of
give and take, of equality and partnership. More than anything else, they want to be
master of their own house and to enjoy the inherent right to decide their own destiny.
While the nations of Southeast Asia prevent attempts to deprive them of their freedom
and sovereignty, they must first free themselves from the material impediments of
ignorance, disease and hunger. Each of these nations cannot accomplish that alone,
but by joining together and cooperating with those who have the same aspirations,
these objectives become easier to attain.
And that was how ASEAN was conceived, given a name, and born. Barely 14
months since Thanat Khoman brought up the ASEAN idea in his conversations with his
Malaysian and Indonesian colleagues. In about three more weeks, Indonesia had fully
restored diplomatic relations with Malaysia, and soon after that with Singapore. That
was by no means the end to intra-ASEAN disputes, for soon the Philippines and
Malaysia would have a falling out on the issue of sovereignty over Sabah. Many
disputes between ASEAN countries persist to this day. But all Member Countries are
deeply committed to resolving their differences through peaceful means and in the spirit
of mutual accommodation. Every dispute would have its proper season but it would not
be allowed to get in the way of the task at hand. And at that time, the essential task was
to lay the framework of regional dialogue and cooperation.
The two-page Bangkok Declaration not only contains the rationale for the
establishment of ASEAN and its specific objectives. It represents the organization’s
modus operandi of building on small steps, voluntary, and informal arrangements
towards more binding and institutionalized agreements. All the founding member states
and the newer members have stood fast to the spirit of the Bangkok Declaration. Over
the years, ASEAN has progressively entered into several formal and legally-binding
instruments, such as the 1976 Treaty of Amity and Cooperation in Southeast Asia and
the 1995 Treaty on the Southeast Asia Nuclear Weapon-Free Zone.
Against the backdrop of conflict in the then Indochina, the Founding Fathers had
the foresight of building a community of and for all Southeast Asian states. Thus the
Bangkok Declaration promulgated that “the Association is open for participation to all
States in the Southeast Asian region subscribing to the aforementioned aims, principles

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and purposes.” ASEAN’s inclusive outlook has paved the way for community-building
not only in Southeast Asia, but also in the broader Asia Pacific region where several
other inter-governmental organizations now co-exist.
The original ASEAN logo presented five brown sheaves of rice stalks, one for
each founding member. Beneath the sheaves is the legend "ASEAN" in blue. These are
set on a field of yellow encircled by a blue border. Brown stands for strength and
stability, yellow for prosperity and blue for the spirit of cordiality in which ASEAN affairs
are conducted. When ASEAN celebrated its 30th Anniversary in 1997, the sheaves on
the logo had increased to ten - representing all ten countries of Southeast Asia and
reflecting the colors of the flags of all of them. In a very real sense, ASEAN and
Southeast Asia would then be one and the same, just as the Founding Fathers had
envisioned.

The Member Countries


Brunei
Darussalam Cambodia Indonesia Laos Malaysia
Myanmar Philippines Singapore Thailand Vietnam

THE ASEAN SECRETARIAT:


BASIC MANDATE, FUNCTIONS AND COMPOSITION

1. The ASEAN Secretariat was established on 24 February 1976 by the Foreign


Ministers of ASEAN. The Agreement on the Establishment of the ASEAN
Secretariat stated that the basic mandate of the ASEAN Secretariat is "to provide
for greater efficiency in the coordination of ASEAN organs and for more effective
implementation of ASEAN projects and activities". The more detailed functions
of the ASEAN Secretariat were embodied in the functions and powers of the
Secretary-General (See Annex A). The ASEAN Secretariat was established with
the following composition: Secretary-General, three Bureau Directors, a Foreign
Trade and Economic Relations Officer, an Administrative Officer, a Public
Information Officer and an Assistant to the Secretary-General.
2. Several amendments to the 1976 basic Agreement have been made since
then. The 1983 amendment was made to provide for the possibility of expanding
the composition of the ASEAN Secretariat staff by adding a clause under Article
4 "and such other officers, as the Standing Committee may deem necessary".
3. In 1985, the tenure of office of the Secretary-General was changed from 2 years
to 3 years.
4. In 1989, the posts of Deputy Secretary-General and nine Assistant Directors
were created.
5. The Singapore Summit of 1992 agreed on the restructuring of ASEAN
institutions. These included (a) regularizing the formal and informal summits, (b)
the dissolution of the five ASEAN economic committees and the establishment of
SEOM and AFTA Council, (c) the redesignation of the Secretary-General of the
ASEAN Secretariat into the Secretary-General of ASEAN with an enlarged

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mandate to initiate, advise, coordinate and implement ASEAN activities and (d)
the professionalization of the ASEAN Secretariat staff on the principle of open
recruitment.
6. The Manila Protocol of 22 July 1992 implemented the Singapore Summit
decision. The tenure of office of the Secretary-General was increased to five
years. Changes in the basic functions of the ASEAN Secretariat have been
reflected in the functions and powers of the Secretary-General, which appears as
Annex B.
7. In 1997, an additional post of Deputy Secretary-General was created.
8. The Sixth ASEAN Summit mandated the review of the overall organizational
structure of ASEAN in order to further improve efficiency and effectiveness,
taking into account the expansion of ASEAN activities, the enlargement of
ASEAN membership, and the current regional situation. As part of this review,
the Summit also decided to “review the role, functions and capacity of the
ASEAN Secretariat to meet the increasing demands of ASEAN and to support
the implementation of the Hanoi Plan of Action”.
9. In pursuance of this mandate, the ASEAN Standing Committee established in
September 1998 a Special Directors-General Working Group on the Review of
the Role and Functions of the ASEAN Secretariat. To assist in the review
process, the ASC commissioned PriceWaterHouse Coopers in November
1998. The ASEAN Directors-General considered the consultant’s Final Report in
April 1999.
10. While upholding the basic mandate of the Secretary-General of ASEAN as set
out in the 1992 Protocol Amending the Agreement on the Establishment of the
ASEAN Secretariat, the ASEAN Standing Committee agreed that the ASEAN
Secretariat should function as coordinating Secretariat to help facilitate effective
decision-making within and amongst ASEAN bodies. The Secretariat would
emphasize more on substantive matter, while its tasks on servicing the various
meetings would be precisely defined.
11. The ASEAN Secretariat has now put in place a functional structure. One of the
two Deputy Secretaries-General has assumed the role of chief-of-staff who shall
be responsible for corporate affairs to ensure efficiency in the internal
management of the ASEAN Secretariat. The other Deputy Secretary-General
shall serve as chief operations who will support the Secretary-General in
operations and policy matters.
12. Corporate affairs shall include the following areas: administration; finance and
funding; human resources; public information; information technology; and
special projects. The operational bureaus will include the Task Force for
Financial Cooperation and Macroeconomic Surveillance; Economic and
Functional Cooperation; Trade, Investment and Services; and Programme
Coordination and External Relations.
13. The measures aimed at improving internal management of the ASEAN
Secretariat include (a) the formulation of annual operating plans to provide a
framework for determining the Secretariat’s priorities and resource allocation
decisions; (b) strengthening of corporate services, particularly in financial
management, it services, and human resources development; (c) considerable

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increase in professional Locally-Recruited Staff to free senior officers’ time from
administrative and secretarial tasks, enabling grater focus on strategic and
substantive matters.

The Organizational Structure of ASEAN

AEM : ASEAN Economic Ministers


AMM : ASEAN Ministerial Meeting
AFMM : ASEAN Finance Ministers Meeting
SEOM : Senior Economic Officials Meeting
ASC : ASEAN Standing Committee
SOM : Senior Officials Meeting
ASFOM : ASEAN Senior Finance Officials Meeting

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TRADE

The ASEAN Free Trade Area (AFTA)

The ASEAN Free Trade Area (AFTA) has now been virtually established. ASEAN
Member Countries have made significant progress in the lowering of intra-regional
tariffs through the Common Effective Preferential Tariff (CEPT) Scheme for AFTA. More
than 99 percent of the products in the CEPT Inclusion List (IL) of ASEAN-6, comprising
Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand, have
been brought down to the 0-5 percent tariff range.

ASEAN’s newer members, namely Cambodia, Laos, Myanmar and Viet Nam, are not
far behind in the implementation of their CEPT commitments with almost 80 percent of
their products having been moved into their respective CEPT ILS. Of these items, about
66 percent already have tariffs within the 0-5 percent tariff band. Viet Nam has until
2006 to bring down tariff of products in the Inclusion List to no more than 5 percent
duties, Laos and Myanmar in 2008 and Cambodia in 2010.

Following the signing of the Protocol to Amend the CEPT-AFTA Agreement for the
Elimination of Import Duties on 30 January 2003, ASEAN-6 has committed to eliminate
tariffs on 60 percent of their products in the IL by the year 2003. As of this date, tariffs
on 64.12 percent of the products in the IL of ASEAN-6 have been eliminated. The
average tariff for ASEAN-6 under the CEPT Scheme is now down to 1.51 percent from
12.76 percent when the tariff cutting exercise started in 1993.

The implementation of the CEPT-AFTA Scheme was significantly boosted in January


2004 when Malaysia announced its tariff reduction for completely built up (CBUs) and
completely knocked down (CKDs) automotive units to gradually meet its CEPT
commitment one year earlier than schedule. Malaysia has previously been allowed to
defer the transfer of 218 tariff lines of CBUs and CKDs until 1 January 2005.

Products that remain out of the CEPT-AFTA Scheme are those in the Highly Sensitive
List (i.e. rice) and the General Exception List. The Coordinating Committee on the
Implementation of the CEPT Scheme for AFTA (CCCA) is currently undertaking a
review of all the General Exception Lists to ensure that only those consistent with Article
9(b)1 of the CEPT Agreement are included in the lists.

ASEAN Member Countries have also resolved to work on the elimination of non-tariff
barriers. A work programme on the elimination of non-tariff barriers, which includes,
among others, the process of verification and cross-notification; updating the working
definition of Non-Tariff Measures (NTMs)/Non-Tariff Barriers (NTBs) in ASEAN; the
setting-up of a database on all NTMs maintained by Member Countries; and the
eventual elimination of unnecessary and unjustifiable non-tariff measures, is currently
being finalized.

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In an effort to improve and strengthen the rules governing the implementation of the
CEPT Scheme, to make the Scheme more attractive to regional businessmen and
prospective investors, the CEPT Rules of Origin and its Operational Certification
Procedures have been revised and implemented since 1 January 2004. Among the
features of the revised CEPT Rules of Origin and Operational Certification Procedures
include: (a) a standardized method of calculating local/ASEAN content; (b) a set of
principles for determining the cost of ASEAN origin and the guidelines for costing
methodologies; (c) treatment of locally-procured materials; and (d) improved verification
process, including on-site verification.

In order to promote greater utilization of the CEPTAFTA Scheme, substantial


transformation has also been adopted as an alternative rule in determining origin for
CEPT products. The Task Force on the CEPT Rules of Origin is currently working out
substantial transformation rules for certain product sectors, including wheat flour, iron
and steel and the 11 priority integration sectors covered under the Bali Concord II.
Direction of Trade ASEAN’s exports had regained its upward trend in the two years
following the financial crisis of 1997- 1998 reaching its peak in 2000 when a total export
was valued at US$ 408 billion. After declining to US$ 366.8 billion in 2001, as a result of
the economic slowdown in the United States and Europe and the recession in Japan,
ASEAN exports recovered in 2002 when it was valued at US$ 380.2 billion. The upward
trend for ASEAN-6 continued up to the first two quarters of 2003. Intra-ASEAN trade for
the first two quarters of 2003 registered an increase of 4.2 and 1.6 percent for exports
and imports respectively.

Direction of Trade

ASEAN's exports had regained its upward trend in the two years following the financial
crisis of 1997-1998 reaching its peak in 2000 when total exports was valued US$ 408
billion. After declining to US$ 366.8 billion in 2001, as a result of the economic slowdon
in the United States and Europe and the recession in Japan, ASEAN expots recovered
in 2002 when it was valued at US$ 380.2 billion. The upward trend for ASEAN-6
continued up to first two quarters of 2003. Intra-ASEAN trade for the first two quarters of
2003 registered an increase of 4.2 and 1.6 percent for exports and imports respectively.

ASEAN Trade with Selected Trading Partners

The United States, the European Union and Japan continued to be ASEAN’s largest
export markets. Japan, followed by the U.S. and EU, were the largest sources of
ASEAN imports. During the first half of 2002-2003, ASEAN-6 trade with major markets
as a whole increased by 11.71 percent for exports and 6.91 percent for imports.
However, ASEAN exports to the U.S. and India and imports from Canada and India
declined during the same period

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THE DIALOGUE SYSTEM

At the Second Summit in Kuala Lumpur the ASEAN heads of government agreed
that the association’s economic relations with other countries or groups of countries
needed to be expanded and intensified.

On that occasion, the ASEAN heads of government met with the Prime Ministers of
Australia, Japan and New Zealand, the first time that they had held consultations as a
group with the leaders of non-ASEAN countries.

The next year, the first Post ministerial Conference took place immediately after the
ASEAN Ministerial Meeting. This was a gathering among ASEAN and its dialogue
partners, which were then Australia, Canada, the European Union, Japan, New Zealand
and the United States.

Every year since then, the foreign ministers of dialogue countries have met at these
post ministerial conferences with their ASEAN counterparts. Between these
conferences, dialogues are held at various levels and wide-ranging projects are
undertaken. These relationships have become models for mutually beneficial relations
between North and South as well as for South-South cooperation.

Four more countries have since joined the ASEAN dialogue system: China (1996), India
(1996), the Republic of Korea (1991) and Russia (1996). The United Nations
Development Program (1977) is the only dialogue partner that is not a sovereign state.

RECENT ISSUES AND CONCERNS

It is in ASEAN’s ability and readiness to resolve political differences affecting its


members and other countries in the Asia-Pacific region that the association’s
commitment to political co-operation is put to the test. More often than not, that
commitment has been affirmed and the ASEAN approach to solving potentially
explosive issues vindicated.

These issues include territorial and jurisdictional disputes in the South China Sea; self-
determination for East Timor; nuclear proliferation in Northeast Asia and South Asia;
weapons of mass destruction; and the impact of globalization.

South China Sea. Like many other parts of the world, Southeast Asia faces territorial
disputes among its members and nearby states. In these disputes ASEAN has
consistently pursued a policy of cooperation in seeking the peaceful settlement of
differences.

In 1992, recognizing that any conflict in the South China Sea could directly affect peace
and stability in the region, ASEAN issued a declaration “urging all parties concerned to

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exercise restraint in order to create a positive climate for the eventual resolution of all
disputes.” ASEAN further “emphasized the necessity to resolve all sovereignty and
jurisdictional issues about the South China Sea by peaceful means, without resort to
force.”

The Manila Declaration of 1992, which proposed a modus vivendi in the South China
Sea, represents one of the most remarkable demonstrations of political solidarity among
ASEAN members on strategic issues of common concern.

On the suggestion of ASEAN, ASEAN and China have been working on a Code of
Conduct to govern state behavior in the South China Sea.

The ASEAN-China Senior Officials’ Consultations Working Group on the Code of


Conduct in the South China Sea met four times this year to negotiate a working draft
code of conduct covering principles and norms of state-to-state relations, peaceful
settlement of disputes and cooperation.

East Timor. ASEAN supported the implementation of the agreement between Indonesia
and Portugal on the question of East Timor and the 5 May 1999 agreements between
the United Nations and the Indonesian and Portuguese governments about the
modalities for the popular consultations of the East Timorese. The consultations were
held on 30 August 1999.

As violence rocked the territory following the referendum, the ASEAN leaders who were
in Auckland for the APEC Economic Leaders’ Meet-ing gathered to address the
problem. Some of them agreed to contribute, at great expense, to the International
Force for East Timor, which was formed upon Indonesia’s invitation. The UN
Transitional Administration in East Timor (UNTAET) was subsequently set up, with a
Filipino general taking over the command of the peacekeeping force. A Thai general
has since succeeded him.

Other ASEAN members have been extending humanitarian and other forms of
assistance to East Timor.

ASEAN has called on the international community to help East Timor achieve peace,
stability and prosperity during its transition to full independence, which would contribute
to the stability of Southeast Asia.

Following the separation of East Timor from Indonesia, ASEAN has declared its position
that a united, democratic and economically prosperous Indonesia is basic to the
maintenance of regional security. In this context, the association emphasised its support
for Indonesia’s territorial integrity.

Northeast Asia. At the Seventh ASEAN Regional Forum in July 2000, the participation
for the first time of the Democratic People’s Republic of Korea in the ARF process was
welcomed-a significant step in the rapid evolution of the situation on the Korean

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Peninsula and thus in the security environment of the Asia-Pacific region. North Korea’s
ARF membership provides additional opportunities for dialogue and exchanges
between North Korea and those ARF countries with key roles in the Korean situation.

ASEAN expressed support for the historic summit between the North and South Korean
leaders, held in Pyongyang on 13-15 June 2000. It also commended the 15 June North-
South Joint Declaration, the first agreement signed at the highest level since the division
of the Korean Peninsula in 1945.

Challenges of globalization. The Seventh ASEAN Regional Forum observed that


although the security outlook for the region remains positive, uncertainties and
challenges-particularly those posed by globalization-would increasingly require ARF’s
attention.

The Seventh ARF also considered the economic, social and human components of
security and the need to promote regional cooperation in dealing with regional security
issues. It discussed both the positive effects and the repercussions of globalization,
including greater economic interdependence among nations and the multiplication of
security threats like transnational crime. In responding to globalisation, ARF felt it
necessary for nations to strengthen their individual and collective capacities to meet the
challenges affecting their common security.

ARF has reaffirmed the need for Southeast Asian countries to continue efforts, through
dialogue and cooperation at national and international levels, in dealing with the
economic, social and political impacts of globalisation so as to ensure sustained
economic and social development.

CURRENT FOCUS

As ASEAN cooperation has reached maturity beyond exchange of best practices


among Member Countries, ASEAN development cooperation activities are now geared
toward achieving greater and deeper regional integration. Since the launch of ASEAN
Free Trade Area (AFTA) initiative in 1992, ASEAN had actually entered into the first
stage toward the process to reach full economic integration. Theoretically, free trade is
to be followed by the formation of customs union, common market, and then economic
union, before the full economic integration is reached. In the context of ASEAN, AFTA
has reached its initial implementation beginning in 2003. Systematic efforts to remove
tariff and non-tariff barriers are being implemented. The current challenges are to
address the details where further adjustments are required beyond the national
borders. ASEAN development cooperation would need to be focused on managing
these implementation issues at the same time to maintaining the outward looking
orientation of ASEAN, including in moving it to the next level of integration toward
creating an ASEAN Economic Community. The latter topic was first discussed at the
high level during the recent 8th ASEAN Summit in Cambodia, and is currently under
preliminary studies by the Member Countries.

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Current Development Cooperation Programmes

To provide a holistic view to the structure of current ASEAN Development Cooperation


Programmes, it is important to recognize the generic steps through which a regional
cooperation evolves. These generic steps are:
a. General exchanges aimed at enhancing the professional cohesion among ASEAN
Members and with the Dialogue Partners,
b. Provision of strategic policy options for ASEAN bodies and Member Countries to
accelerate the ASEAN’s greater and deeper integration,
c. Implementation of relatively larger-scale and multi-year activities in the form of
programme stream or flagship projects, and
d. Provision of continued support to implement small prototype project to further
advance the more progressive initiatives.
At present the above four generic steps have been fully reflected in the ASEAN
development cooperation programmes as follows:
a. The general exchanges are supported by the various funding schemes such as the
ASEAN Fund, Science and Technology Fund, Cultural Fund, as well as a number of
exchange and cooperation funds jointly established by ASEAN and its Dialogue
Partners,
b. The provision of policy options is implemented in the three major policy programmes,
namely:

• ASEAN-Australia Development Cooperation Program-Regional Economic Policy


Support Facility (AADCP-REPSF),
• ASEAN-UNDP Partnership Facility, and
• ASEAN-EU Programme for Regional Integration Support (APRIS).

c. Programme stream and flagship projects are currently implemented in the two
programmes, namely:

• ASEAN-Australia Development Cooperation Program-Program Stream


Component, and
• ASEAN-German Forestry Programme.

d. The provision of continued support for smaller-scale prototype projects is currently


being implemented in the ASEAN-Australia Development Cooperation Program-
Regional Partnership Scheme (AADCP-RPS).

IMPLEMENTING SECTORS

Because ASEAN’s programme is aimed at bringing together Member Countries as a


group in the efforts to achieve ASEAN’s common objectives, its implementation is
always carried out by the most relevant sectors to the subject of the programme. At

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present, there are 13 clusters of sectors through which ASEAN cooperation activities
are channeled. These sectors include:

A. Economic Cooperation
1. Trade (AFTA),
2. Investment,
3. Transport,
4. Telecommunication,
5. Energy,
6. Tourism,
7. Finance,

B. Functional Cooperation

8. Social Development,
9. Environment,
10. Science and Technology,
11. Food, Agriculture and Forestry,
12. Culture and Information,
13. Special Projects

In each of the sector, there are hierarchies of committees from the ministerial, senior
officials, to a working/expert group levels. In most cases, the committee
structures reflect the sectors and sub-sectors of cooperation in ASEAN.

Road ahead

The ASEAN countries with large populations and consumption patterns are important
drivers of growth. With a combined Gross Domestic Product (GDP) of US$ 2.3 trillion as
of now, they together will create a new free trade area of 1.7 billion people and cover 11
countries.

The future has been summed up well by Indonesian Trade Minister Marie Pangestu.
She said the FTA in goods paved the way for more economic cooperation between
ASEAN countries and "This will lead to a greater integration between ASEAN and its
dialogue partners."

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ASEAN VISION 2020

We envision the ASEAN region to be, in 2020, in full reality, a Zone of Peace,
Freedom and Neutrality, as envisaged in the Kuala Lumpur Declaration of 1971.
ASEAN shall have, by the year 2020, established a peaceful and stable Southeast Asia
where each nation is at peace with itself and where the causes for conflict have been
eliminated, through abiding respect for justice and the rule of law and through the
strengthening of national and regional resilience.
We envision a Southeast Asia where territorial and other disputes are resolved
by peaceful means.
We envision the Treaty of Amity and Cooperation in Southeast Asia functioning
fully as a binding code of conduct for our governments and peoples, to which other
states with interests in the region adhere.
We envision a Southeast Asia free from nuclear weapons, with all the Nuclear
Weapon States committed to the purposes of the Southeast Asia Nuclear Weapons
Free Zone Treaty through their adherence to its Protocol. We also envision our region
free from all other weapons of mass destruction.
We envision our rich human and natural resources contributing to our
development and shared prosperity.
We envision the ASEAN Regional Forum as an established means for
confidence-building and preventive diplomacy and for promoting conflict-resolution.
We envision a Southeast Asia where our mountains, rivers and seas no longer
divide us but link us together in friendship, cooperation and commerce.
We see ASEAN as an effective force for peace, justice and moderation in the
Asia-Pacific and in the world.

A Community of Caring Societies

We envision the entire Southeast Asia to be, by 2020, an ASEAN community


conscious of its ties of history, aware of its cultural heritage and bound by a common
regional identity.
We see vibrant and open ASEAN societies consistent with their respective national
identities, where all people enjoy equitable access to opportunities for total human
development regardless of gender, race, religion, language, or social and cultural
background.
We envision a socially cohesive and caring ASEAN where hunger, malnutrition,
deprivation and poverty are no longer basic problems, where strong families as the
basic units of society tend to their members particularly the children, youth, women and
elderly; and where the civil society is empowered and gives special attention to the
disadvantaged, disabled and marginalized and where social justice and the rule of law
reign.
We see well before 2020 a Southeast Asia free of illicit drugs, free of their
production, processing, trafficking and use.
We envision a technologically competitive ASEAN competent in strategic and
enabling technologies, with an adequate pool of technologically qualified and trained

24
manpower, and strong networks of scientific and technological institutions and centers
of excellence.
We envision a clean and green ASEAN with fully established mechanisms for
sustainable development to ensure the protection of the region's environment, the
sustainability of its natural resources, and the high quality of life of its peoples.
We envision the evolution in Southeast Asia of agreed rules of behaviour and
cooperative measures to deal with problems that can be met only on a regional scale,
including environmental pollution and degradation, drug trafficking, trafficking in women
and children, and other transnational crimes.
We envision our nations being governed with the consent and greater
participation of the people with its focus on the welfare and dignity of the human person
and the good of the community.
We resolve to develop and strengthen ASEAN's institutions and mechanisms to
enable ASEAN to realize the vision and respond to the challenges of the coming
century. We also see the need for a strengthened ASEAN Secretariat with an enhanced
role to support the realization of our vision.

An Outward-Looking ASEAN

We see an outward-looking ASEAN playing a pivotal role in the international fora,


and advancing ASEAN's common interests. We envision ASEAN having an intensified
relationship with its Dialogue Partners and other regional organizations based on equal
partnership and mutual respect.

Conclusion

We pledge to our peoples our determination and commitment to bringing this


ASEAN Vision for the Year 2020 into reality.

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