There are still plenty of potential bilateral tensions within ASEAN and tensions over the path of integration but, unlike the EU, the Asian institution does not loom large in the imaginations of the region’s people as a source of resentment or economic pain.
There is also no clear protocol for leaving then group which means in the event of a split it is more likely a member would just not turn up to meetings.
In an implicit warning about the progress on the AEC, former ASEAN staff member Termsak Chalermpalanupap says the lesson of Brexit for ASEAN is it cannot be assumed regional cooperation will progress in a linear positive upward direction but instead could be subject to sudden disruption and reversal.
“There is no imminent threat of X-exit in ASEAN for the time being. ASEAN is still considered as useful to all member governments in different ways. But we cannot continue to assume ASEAN is indispensable to every member government in all ways at all times,” he wrote in The Diplomat.
BIGGEST EVER TEST
Dealing with Beijing over the South China Sea may well become the biggest ever test of this principle with virtually all member countries issuing vague, non-committal statements on The Hague court decision suggesting they want to walk both sides of the dispute as long as possible.
Research published by Asialink on expert opinion across the region revealed a broader spread of views about how to negotiate than has typically been the case outside the region.
How this process unfolds is of crucial importance to Australia as ASEAN’s first dialogue partner forty years ago and more recently as a country reliant on ASEAN to give it a leg up into the top level of Asian diplomatic architecture in the East Asian Summit.
Last year the Australian government moved to increase the national focus on Southeast Asia as the third leg of regional – or even global – growth after China and India by encouraging business to focus more on opportunities which could arise from the ASEAN Economic Community.
The Why ASEAN and Why Now? study cites the availability of low cost labour, the growing consumer markets in the emerging middle class and the growing demand for sophisticated services across the region as a source of investment opportunities for Australian companies.
Australia’s low level of business engagement with the Asian countries right on its doorstep came in for some high profile criticism in an earlier study by PwC, Passing us by, which highlighted how Australian companies had more invested in New Zealand than ASEAN which has a population about 150 times larger.
Despite this striking imbalance, two-way trade and investment in the Southeast Asian region has been growing over the past decade during which Australia has completed three bilateral trade deals with member countries and a regional deal.
The stock of Australian direct investment has more than tripled from less than $A10 billion to $A37 billion in 2015. Two-way goods and services trade increased from $A56 billion in 2005 to $A96 billion in 2015.
On the other side of the equation, foreign direct investment from ASEAN businesses into Australia has expanded even faster from under $A10 billion to more than $A40 billion.
These growing links to Australia’s closest Asian neighbours may well come under pressure if the ASEAN countries are distracted from economic growth policies by new external strategic tensions.
Greg Earl is a former Southeast Asia correspondent and Asia Pacific editor for The Australian Financial Review. He is member of the Australia ASEAN Council board. This article is drawn from a presentation to the Asialink Business State of the Nation series of panels this week in Melbourne, Sydney and Brisbane.