Australian Mission to ASEAN

Regional Integration : A Dialogue Partner’s Perspective

Regional Integration and ASEAN’s External Partnerships

ISEAS Yusof Ishak Institute ASEAN Rountable 2015

Panelist remarks by Mr Simon Merrifield

Australian Ambassador to ASEAN

Singapore, 14 September 2015


I start from the premise that ASEAN has been a great success story in international affairs, one of the most successful and enduring regional organisations.  A connected and united ASEAN delivers a strategic benefit way greater than the sum of its parts.

  • I suggest that the close and sustained engagement of DPs, including all the global heavyweights and some of the cruiserweights, is a de facto third party endorsement that ASEAN is getting it right. 
    • World leaders don’t turn up because they have nothing else on  (… but important to not take that for granted.  If the agenda loses momentum or takes a wrong turn, leaders will make other choices.  It’s precious – look after it. )
  • And it’s not just governments:  FDI from the EU, the US, Japan, China and Korea have been very strong and have contributed strongly in the regions achievements as they stand today.  These investments aren’t technically in the AEC, they’re in countries, but the AEC has brand status and head-turning effect. 

ASEAN’s been essential to achieving and sustaining a prosperous and stable Southeast Asia and broader Indo-Pacific region.   

Australia recognised early that ASEAN would be good for the region – strategically and economically

  • Dialogue partnership 1974
  • AFTA-CER and the ARF in the 1990s
  • AANZFTA is the 2000s
  • RCEP and the EAS with its full membership in the current decade

Australia has invested in ASEAN institution building, including in supporting the ASEAN Secretariat in building economic integration.    

  • Much of that activity ties into our broader policy agenda (as it should):  we do a lot on the trade policy front with things like AANZFTA and RCEP so our aid programs focus on assisting those in need to better understand and deal with those concepts. 

Australia sees the economic and political security agendas as two sides of the same coin.  They are interdependent and they reinforce one another, but its easier to engage in the economic context – less sensitivities, not seen as zero sum. 

  • Much more evidence of ASEAN’s accomplishments in the economic pillar.  There are more component parts and machinery.  This is a good thing – a political-security community or a socio-cultural community not founded on effective economic integration won’t work, but less so the other way around. 

I spent last week in Australia reaching out to the private sector about the AEC.  Australia’s 24 years of growth is intimately tied into the economic rise of East Asia.  We are a trading nation and Asia is predominantly where have traded for many decades. 

  • There’s a lot of interest in China and that tends to overshadow other markets to a degree.  But that’s shifting.  There’s a lot of interest in individual ASEAN markets but not an informed sense of what ASEAN integration means, and a lot of misunderstanding.  The right messages don’t always cut through.  Terminology like Economic Community distorts expectations, and when the reality doesn’t align with the perception, dismissiveness creeps in.  We have worked up our own materials to help deal with that (‘Why ASEAN and Why Now?’).  
  • So there is some uncertainty and even apprehension.  It’s not just Australian business; I hear it from the private sector here in Singapore, KL, etc. 
  • Also, lucky to have a good FTA – AANZFTA is one.  But there’s nothing more toxic than a bad FTA.  If industry/business don’t like it, takes on a negative energy.  Important to make RCEP good.

Fortunately there are major Australian corporates with multi-country strategies in ASEAN and have a long term view about building their investments – ANZ and Linfox logistics are two, but there are others as well.  But there should be more – ASEANs interests and Australia’s interests would be better served. 

As a key dialogue partner trying to support ASEAN in this project, we see how ASEAN’s  institutionally-light version of integration throws up challenges.  So much more that could be done with a better resourced central office.  But that’s another conversation. 

I really commend ASEAN’s outward facing orientation as its greatest strength – joining up the region to make it efficient and resilient and attractive, and linking that in with the other centres of economic dynamism. 

But, also feel that as the strategic environment becomes more complex, ASEANs job becomes much harder, as does everyone’s  (and we’re entering a new phase of lower growth that will compound structural issues and challenge political systems already strained and struggling to reform. I think that portends a period of greater risk.)

Need to be very careful in what may be a fragile period ahead.  Mindful of the stresses on ASEAN unity, mindful of the need to keep the agenda engaging and dynamic, mindful of balancing ASEAN centrality with dialogue partner value. 

ASEAN ‘plus’ Arrangements like ADMM+, EAS, ARF give the platform and space to all participants in regional issues to engage on the key issues of the day.  There is very good acceptance of ASEAN centrality.  I think we all see its importance and utility.  Within the framework of ASEAN centrality, it’s important to keep up a degree of dynamic engagement with partners.  Things like a CPR + 8 platform for the EAS is an example.