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ESTABLISHMENT: The Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Bangkok by the five original Member Countries, Singapore, namely, and Indonesia, Malaysia, July 1995, Philippines, Thailand. Brunei 23 July 1997,


joined on 8 January 1984, Vietnam on 28 Lao PDR and Myanmar on

and Cambodia on 30 April 1999. The Chair of ASEAN is rotated among the ASEAN

countries on an annual basis, and acts as host of the Summit and key ministerial meetings. Thailand is the current Chair of ASEAN.

MEMBER COUNTRIES: 1. 2. 3. 4. 5. Burma Brunei Darussalam Cambodia Indonesia Laos 6. Malaysia 7. Philippines 8. Singapore 9. Thailand 10. Vietnam

OBJECTIVES: The ASEAN Declaration states that the aims and

purposes of the Association are:

To accelerate economic growth, social progress and cultural development in the region. 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.

ASEAN Vision 2020, adopted by the ASEAN Anniversary of ASEAN, agreed concert of

Leaders on the 30th

on a shared vision of ASEAN as a peace,

Southeast Asian nations, outward looking, living in stability and prosperity, bonded together in in the dynamic ASEAN development Leaders and in a an partnership In 2003,

community of caring societies. resolved that ASEAN Community shall ASEAN Economic be established comprising Community, Socioand ASEAN

three pillars, namely, ASEAN Security Community Cultural Community.


ASEAN Security Community

ASEAN Economic community

ASEAN Sociocultural

ASEAN has emphasized regional cooperation in these three pillars. The regional grouping has made the most progress in economic integration. THE ASEAN SECURITY COMMUNITY: It shall aim to ensure that countries in the region live at peace with one another and with the world in a just, democratic manner. In recognition of security interdependence in the Asia-Pacific region, ASEAN established the ASEAN Regional Forum (ARF) in 1994. The ARFs agenda aims to evolve the promotion of confidence building, development of preventive diplomacy and elaboration of approaches to conflicts. The ARF discusses major regional security issues in the region, including the relationship amongst the major powers, non-proliferation, counter-terrorism, transnational crime, South China Sea and the Korean Peninsula, among others. THE ASEAN ECONOMIC COMMUNITY: 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 free flow of capital, equitable economic development and reduced poverty and socio-economic disparities in year 2020. Major integration-related economic activities of ASEAN include the following:

Roadmap for Financial and Monetary Integration of ASEAN 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, 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. 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 (cambodia, lao pdr, Myanmar and Vietnam) 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. 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; 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.

ASEAN TRADE PERFORMANCE: There was an increase in the ASEAN trade performance over the years. Japan, the US, the European Union and China and Korea continued to be ASEANs largest trading partners. The share of ASEAN trade (exports + imports) with these countries in overall ASEAN trade in were 12.6%, 12.5%, 11.2%, 9.3% and 3.9 %, respectively. The ASEAN Heads of State and Government decided to establish an ASEAN Free Trade Area or AFTA in 1992. The objective of AFTA is to increase the ASEAN regions competitive advantage as a production base geared for the world market.

A vital step in this direction is the liberalization of trade through the elimination of tariffs and non-tariff barriers among the ASEAN members. This activity has begun to serve as a catalyst for greater efficiency in production and long-term competitiveness. Moreover, the expansion of intra-regional trade is giving the ASEAN consumers wider choice and better quality consumer products. Member Countries are working towards the total elimination of import duties on all products to achieve the ultimate objective of a free trade area. The AFTA Council has agreed that the target dates to achieve this objective will be in 2015 for the six original ASEAN Member Countries and 2018 for the newer Members. STRUCTURES AND MECHANISMS: 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. To support the conduct of ASEANs external relations, ASEAN has established committees composed of heads of diplomatic missions. ASEAN promotes dialogue and consultations with professional and business organisations with related aims and purposes. Furthermore, there are 58 NonGovernmental Organizations (NGOs), which have formal affiliations with ASEAN.


The ASEAN Vision 2020 affirmed an outward-looking ASEAN playing a pivotal role in the international community and advancing ASEANs 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. Consistent with its resolve to enhance cooperation with other developing regions, ASEAN maintains contact with other inter-governmental organisations.

THE FUTURE OF ASEAN: ASEAN is widely recognized in the international community as an exemplar of enlightened and successful regionalism. ASEAN today is the only subregional organization in Asia that provides a political forum where Asian countries and the world Powers can discuss and consider problems related to security, political issues and military concerns".

The expansion of ASEAN shall pave the way for a new synergy, maximizing the cooperation potential for growth of the entire region". ASEAN faces the future with confidence. Its strong foundation and remarkable achievements will serve ASEAN well as it pursues higher goals at the dawn of the new millennium. Economically, ASEAN shall move towards greater economic integration with emphasis on sustainable and equitable growth. shall nourish a caring and cohesive ASEAN community, whose strength lies in fostering a common regional identity and a shared vision for the future. EUROPEAN UNION (EU):

ESTABLISHMENT: The European Union was formally established on November 1, 1993. It is the most recent in a series of cooperative organizations in Europe that originated with the European Coal and Steel Community (ECSC) of 1951, which became the European Community (EC) in 1967. The original members of the EC were Belgium, France, West Germany (now part of the united Germany), Greece, Italy, Luxembourg, and Netherlands. Subsequently these nations were joined by Denmark, Ireland, the United Kingdom, Portugal, and Spain. In 1991 the governments of the 12 member states signed the Treaty on European Union (commonly called the Maastricht Treaty), which was then ratified by the national legislatures of all the member countries. The Maastricht Treaty transformed the EC into the EU. In 1995 Austria, Finland, and Sweden joined the EU. In May 2004, 10 more countries were added, bringing the

total number of EU member countries to 25. The 10 new members were Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia. Two more countries In eastern Europe Romania and Bulgariajoined the EU on January 1, 2007. The European Union headquarters is located In Brussels, Belgium. As of 2008 there were 27 countries in the EU.

MEMBER STATES: The European Union is composed of 27 independent sovereign countries which are known as member states: 1.Austria 2. Belgium 3. Bulgaria 4. Cyprus 5. The Czech Republic 6. Denmark 7. Estonia 8. Finland 9. France 10. Germany 11. Greece 12. Hungary 13. Republic of Ireland 14. Italy 15. 16. 17. 18. 19. 20. 23. 24. 25. 26. 27. Latvia Lithuania Luxembourg Malta The Netherlands Poland 21. Portugal 22. Romania Slovakia Slovenia Spain Sweden The United Kingdom

There are three official candidate countries, Croatia, the Republic of Macedonia, and Turkey; the western Balkan countries of Albania, Bosnia and Herzegovina, Montenegro, and Serbia are officially recognised as potential candidates. The disputed region of Kosovo has been granted similar status.


Its principal goal is to promote and expand

cooperation among member states in economics and trade, social issues, foreign policy, security and defense, and judicial matters. A major goal of the EU has been to establish a single market in which the economies of all the EU member states are unified. The EU has sought to meet this objective in three ways: by defining a common commercial policy, by reducing economic differences among its richer and poorer members, and by stabilizing the currencies of its members. The EU has attempted to address regional economic differences through agencies such as the European Social Fund, the European Regional Development Fund, the Cohesion Fund, and the European Investment Bank (EIB). These agencies provide money through loans or grants to promote development in the economically disadvantaged areas of the EU. However, apart from activities of the EIB, this funding is limited by the size of the EUs overall budget, which is equivalent to about 1 percent of the gross domestic product (GDP) of all the member states.


At present the EU does not have a codified catalogue of fundamental rights against which its legal acts might be judged. However the European Court of Justice does give judgements on fundamental rights derived from the "constitutional traditions common to the Member States," and may even invalidate EU legislation based on its failure to adhere to these fundamental rights. While the EU may be said to have an unwritten fundamental rights code, there have, nonetheless, been efforts to establish a written catalogue. In 2000 the EU drew up the Charter of Fundamental Rights. The Charter is not legally binding at present but would become so if the Lisbon Treaty comes into force. REDUCING ECONOMIC DIFFERENCES: Under the 1957 Rome treaty that created the EEC, the signatories pledged to standardize policies regarding working conditions, social insurance, and similar matters. However, little progress was made until an increase in oil prices brought about the worldwide economic depression of the 1970s. At that time, the European Regional Development Fund was created and the moribund European Social Fund, which had originally been established by the Rome treaty, was reactivated. In 1994 the EU established the more comprehensive Cohesion Fund for reducing the economic gap between its richest and poorest areas. GOVERNANCE: The EU is often described as being divided into three areas of responsibility, called pillars. The original

European Community policies form the first pillar, while the second consists of Common Foreign and Security Policy. The third pillar originally consisted of Justice and Home Affairs, however owing to changes introduced by the Amsterdam and Nice treaties, it currently only consists of Police and Judicial Co-operation in Criminal Matters. Most activities of the EU come under the first, Community pillar.

EUROPEAN ECONOMIC AREA: It is an association formed to establish a single market and free-trade area among countries of the European Union (EU) and the European Free Trade Association (EFTA). The EEA is the one of the largest free-trade zones in the world. It has 30 members, comprising the 27 EU countries plus Iceland, Liechtenstein, and Norway. Switzerland, the only member of EFTA that did not join the EEA, maintains observer status. The treaty forming the EEA was signed in Porto (Oporto), Portugal, in 1992 and went into effect in 1994. The main provisions of the treaty are: (1) The free movement of people, services, capital, and goods within the EEA; (2) The adoption by the EFTA of EU rulings relating to consumer protection, the environment, business law, education, research, and social policy; (3) The gradual liberalization of the EFTAs agricultural policy; and

(4) The establishment of an EFTA surveillance authority, a body that oversees the implementation of EEA policies in the EFTA states that joined the EEA. Stabilizing Currencies: The European Monetary System (EMS) The European Monetary System (EMS) is the exchange rate structure of the EU. It was established in 1979 to stabilize exchange rates among members at a time when currencies were fluctuating dramatically because of the economic recession of the 1970s. The promotion of stable currencies, it was hoped, would provide the foundations for a future monetary union and a single currency among member states. The core of the EMS and the engine of stabilization is the Exchange Rate Mechanism (ERM). This system was designed to reduce the amount that the currencies of member states could fluctuate against each other. By evening out exchange rate fluctuations and stabilizing currencies, the ERM was intended to stimulate trade and investment among EU members, and to help prevent inflation by linking weaker national currencies to the strong and stable German national currency, the deutsche mark.

EUROPEAN FREE TRADE ASSOCIATION: The operation of the free-trade area among the EFTA states is the responsibility of the EFTA Council, which meets twice yearly and is made up of representatives from each member nation. Among other things, the council manages relations among EFTA members, sets the organizations budget, and handles relations with the European Union.

Several standing committees, such as the Budget Committee and the Economic Committee, assist the council in its operations. EFTA is also served by a secretariat that deals with matters relating to the EEA, relations with countries outside Western Europe, and cooperation with European statistical agencies. The headquarters of the EFTA is in Geneva, Switzerland.

THE FUTURE OF THE EUROPEAN UNION: Its progress, however, has been uneven, with spurts of activity separated by dormant periods. Uncertainties about the future of the EU are underlined by concerns among member states over the potential loss of their ability to act independently. A reluctance to cede national authority has been most pronounced in security policy. The EU failed to present a coherent front in either the Persian Gulf War or the former Yugoslavia when required to move from a common policy position to a common action. The desire of some countries to build a common defense policy is resisted by others that insist that at best a European defense force can only be supportive of and subordinated to NATO. MERCOSUR: ESTABLISHMENT: Mercosur, regional trade organization formed in 1991 to establish a common market and a common trade policy towards outside nations. Mercosur takes its name from Mercado Comun Del Sur (Spanish for Common Market of the South). It is also sometimes referred to as the Southern Cone Common Market. The organization has its origins in a trade

treaty signed by Argentina and Brazil in 1986. In 1990 these countries joined with Uruguay and Paraguay to form a free-trade zone, which allows unrestricted trade between the four countries. In 1995 the member nations formed a customs union, in which they agreed to reduce or eliminate trade barriers between member countries and adopt a common trade policy toward outside nations. In 2006, Venezuela became a full member of Mercosur after being an associate member since 2004. Venezuelas entry raised the combined annual gross domestic product of Mercosur to $1 trillion.

MEMBER COUNTRIES: 1. Argentina 2. Paraguay 3. Uruguay 4. Brazil 5. Venezuela Associate Members: Bolivia, Chile, Colombia, Ecuador, Peru.

OBJECTIVES: Free transit of production of goods, services and factors between the member states with inter alia, the elimination of customs rights and lifting of nontariff restrictions on the transit of goods or any other measures with similar effects; Fixing of a common external tariff (TEC) and adopting of a common trade policy with regard to nonmember states or groups of states, and the coordination of positions in regional and international commercial and economic meetings; Coordination of macroeconomic and sectorial policies of member states relating to foreign trade, agriculture, industry, taxes, monetary system, exchange and capital, services, customs, transport and communications, and any others they may agree on, in order to ensure free competition between member states; and The commitment by the member states to make the necessary adjustments to their laws in pertinent areas to allow for the strengthening of the integration process.

MERCOSUR initially targeted free-trade zones, then customs unification and, finally, a common market, where in addition to customs unification the free movement of manpower and capital across the member nations' international frontiers is possible, and depends on equal rights and duties being granted to all signatory countries. TRADE: Most of South America's trade is intercontinental, with the United States, Western Europe, and Japan the major

trading partners. Petroleum and its derivatives are the principal components of foreign trade. Brazil and Venezuela dominate the continent's export trade, and Brazil accounts for much of the imports. The continent's external trade in agricultural and mining commodities remains more important than the internal trade of these commodities. South America contributes significantly to world trade in petroleum, coffee, copper, bauxite, fish meal, and oilseed; trade in these and other primary goods is essential to the underwriting of the continent's economic development.

FREE TRADE ZONES: Scope The member nations can have commercial free-trade zones, industrial free-trade zones, export processing zones, and special customs areas, all of which target providing merchandise marketed or produced in these areas with treatment different from that afforded in their respective customs territories. Tariffs The member states can assess merchandise from these areas with the common external tariff used for MERCOSUR merchandise, or, in the case of certain special products, the domestic tariff prevailing in each individual state. In this way, the products from the free-trade zones can have the more favorable tax treatment established under MERCOSUR, given to the merchandise produced in the normal customs zones of each member state or, in the case of certain special products, can have the normal customs treatment prevailing in each nation. Safeguards Products produced or marketed in the free-trade zones of each member nation will be eligible for the safeguard system whenever this entails an increase not provided for in imports, but capable of causing damages or threatened damages to the importer country. Incentives

In the event of the producing nation's granting special incentives for production from the free-trade zones that are not compatible with the corresponding guidelines established under the General Agreement on Tariffs and Trade - GATT, the member nation can make any adjustments needed to return the situation to equilibrium.

Manaus and Tierra del Fuego Free-trade Zones: The actual implementation of MERCOSUR will not affect the special Manaus, Brazil, and Tierra del Fuego, Argentina, free-trade zones organized in light of their special geographic situations. These two free-trade zones may continue normal operations until 2013.

EXTERNAL RELATIONS: Negotiations for an inter-regional Association Agreement between the EU and the Mercosur were launched in April 2000. The agreement is based on a region-to region approach and aims to be both comprehensive and ambitious, going beyond the respective WTO obligations of both sides. No sector will be excluded from liberalisation, although product and sectoral sensitivities on both sides will be taken into account. The agreement will cover not just goods, but services, investment and government procurement markets for goods, services and works. In line with all modern EU FTAs, the EU-Mercosur FTA aims to ensure adequate protection of intellectual property rights, effective competition policies and will include a special agreement on sanitary and

phytosanitary standards. It will also establish an effective and binding dispute settlement mechanism to help resolve trade frictions in the EU-Mercosur relationship. As of 2008, 16 negotiating rounds have been conducted. Recognising the close ties between this negotiation and any outcome of the WTO Doha Development Agenda, negotiations have only taken place at a technical level since 2004. With greater clarity on the likely result of the Doha Round it should be possible to relaunch full negotiations.

FUTURE OF MERCOSUR: With the absence of a bipolar international system and the rise of globalization, there are two tracks of foreign diplomatic and economic policy that nation-states can pursue. These can be competing or complementary. The first is global integration. The other course is to concentrate on regional integration. The European Union is the best example of this today. Latin America also faces a choice in its future. Mercosur, the "Common Market of the South" is an economic initiative that offers promise of economic development. Begun in 1991 as an economic agreement between four nations in the Southern Cone, Mercosur made large gains in regional trade during its initial years. As the global economy began lagging at the turn of the century, proponents for Mercosur have had a more difficult time arguing its benefits. Should Mercosur survive this test, it could emerge stronger and continue to expand along the same lines

politically and militarily as the European Union. This thesis will open by examining the evolution of Mercosur compared to the model of the European Union. The next chapter will focus on the problems the Common Market has faced since its inception and how the actors have dealt with them. It will offer the corrective steps necessary for the project to succeed. The final chapter will focus on economic nationalism. What is it and will it derail Mercosur? The answer may be startling to some. The conclusion will summarize the arguments made and make a prediction on the future of Mercosur.