The Impact Of TPP To The Leading Role Of ASEAN In The Cooperation Process In Southeast Asia (Essay Sample)

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The impact of TPP to the leading role of ASEAN in the cooperation process in Southeast Asia
An overview of TPP and ASEAN
Trans-Pacific Partnership (TPP)
The TPP originated from the Trans-Pacific Strategic Economic Partnership Agreement (P4) between New Zealand, Singapore, Brunei, and Chile that first came into operation in 2006. The initial negotiations for the TPP occurred in Melbourne in 2010 to expand the P4 by adding eight more countries including Canada, the United States, Peru, Mexico, Vietnam, Malaysia, Singapore, and Australia. The negotiations attended by ministers from the 12 countries concluded in October 2015 and the agreement was signed in February 2016 (Chen, 2015 p.1). The outcome of the negotiations is an ambitious, comprehensive, and impartial agreement with the aim of enhancing economic development and competitiveness of products, promote innovation, create and retain jobs, and increase productivity of the participating economies. Other objectives of the TPP include reducing poverty, promoting good governance and integrity, as well as conserving the environment.
The TPP has five defining features including unlimited access to markets, regional approach to overall development, addressing contemporary issues in trade, platform for future regional incorporation, and inclusive trade. The ultimate vision of the partnership is to open up trade and bring about integration of the Asia Pacific region in 30 chapters that outline trade issues such as barriers and remedies, customs, sanitary measures, intellectual property, e-commerce, and government procurement among others. The TPP goes beyond traditional Free Trade Agreements (FTAs) that have dominated multilateral agreements in the past to include high investment standards. The agreement is incorporating cross-cutting themes in the 21st century by leveraging on the digital economy that enables small and medium-sized businesses to benefit from international markets. The TPP is unique because it unites diverse nations with different characteristics including language, history, culture, development levels, size, and geography (Chen, 2015 p.2).
Association of Southeast Asian Nations (ASEAN)
The ASEAN is both an economic and political association established in 1967 and comprises of ten Southeast Asian countries including Indonesia, Cambodia, Brunei, Myanmar, the Philippines, Malaysia, Singapore, Vietnam, Lao, and Thailand (ASEAN, 2008 p.5). The association was established through a declaration signed by the 10 nations involving a conscious effort to increase interdependence, achieve high and sustained economic development, enable trade inclusion, and remove trade barriers. However, even with the serious commitment to enhance cooperation, the Southeast Asian countries have firm standards for state sovereignty, non-interference, nonalignment, as well as collective and consensual policymaking.
In 2007, the ASEAN made a new commitment to establish a single production and market base in the region with free movement of all factors of production (capital, labor, and services). The recent six year roadmap that ended in 2015 had three objectives to strengthen ties among the Southeast Asia countries including promoting mutual assistance and collaboration, social prosperity and cultural development, as well as regional stability and peace. The road map was implemented under the ASEAN Economic Community (AEC), which had new rules with a unified legal foundation and enforced by the ASEAN secretariat as well as the economic ministers from each participating country( ASEAN, 2008 p.5). The leading/main role of ASEAN in the Southeast Asia.
Since the establishment of the ASEAN in 1967, the role of the association has expanded over the years due to the development and enactment of various declarations and concords that add new provisions to the original document (ASEAN, 2008 p.6). The subsequent ASEAN summit was held in Bali in 1976 to expand the mandate of the association from purely economic to include more goals for cooperation including amity and conflict resolution. It is also at this point that the ASEAN members developed a peace, freedom, and neutrality zone (ZOPFAN) in the region but with strict emphasis on country sovereignty and autonomy. In December 1997, 30 years since the first ASEAN declaration, representatives from the ten countries decided to transform the association into a prosperous, competitive, and stable region by reducing poverty and socio-economic differences, as well as promote equitable economic growth. Six years down the line (October, 2003), ASEAN held another summit in Bali and affirmed the AEC as the major goal of the association with a vision that lasted up to 2020 that would accelerate economic development in the region under intensified cooperation (ASEAN, 2008 p.8).
The association developed a security community in the same year as an integral pillar of the association in its pursuit for prosperity to oversee innovative approaches to maintain security and conduct effective post-conflict reconstruction (ASEAN, 2008 p.10). ASEAN also developed a socio-cultural community to help in achieving its vision 2020 by preserving individual cultures and mutually benefiting from those diversities. The single and comprehensive blueprint developed in August 2006 outlined the framework for developing clear objectives for the AEC by 2015 that were consistent with the targets set in the Bali Concord in 2003 for economic, security, and socio-cultural development (ASEAN, 2008 p.10).
The leading role of the ASEAN is to coordinate an economic and political association that strives to achieve social and economic prosperity, peace and stability, as well as cultural development of its members. The AEC is a culmination of the greater goal outlined in the vision 2020 that converges the interests of ASEAN countries by serving the mandate of establishing a single production and market base with free flow of capital, goods, investment, skilled labor, and services. ASEAN also has the role of promoting the countries in some priority areas including food and agriculture, education, and technology. The ASEAN also provides consumer protection by setting rules and regulations for inspecting products. Intellectual property rights in the ASEAN also serve to grow talents through protecting the inventive, creative, and innovative works of citizens in participating countries. ASEAN also engages in infrastructure development especially an integrated road network that enhances labor mobility and the free flow of goods. ASEAN integrates its members into the global economy by promoting the competitiveness of its products and enhancing the bargaining power of the region due to economies of scale. The impact of TPP to the leading role of ASEAN in the cooperation process in Southeast Asia which included the challenges and opportunities of TPP to the leading role of ASEAN in the region. The Trans Pacific Partnership Agreement (TPP) became official in February 2016 after the agreement was signed by 12 countries. Among the twelve countries in the TPP, only four are in the Association of South East Asia Nations including Brunei, Vietnam, Singapore, and Malaysia. Whereas the ASEAN is made up of ASIAN countries only, the TPP has a diverse group of nations from three continents including North America, South America, and Asia. In addition, TPP had a strong backing from the United States Senate to make it a free trade region. In economic cooperation, agreements are not usually formalized and countries usually agree on shared purchasing, higher labor mobility, and transfer contracts.
With the new economic body (TPP), it bears the question whether non-TPP members such as Thailand and Indonesia will get excluded from economic benefits arising from TPP? Also, is there a possibility that TPP will affect the investment and factor mobility patterns enjoyed by ASEAN members? The existence of the two trading blocs has called a lot of attention on the two arrangements and how they are going to influence trade in the pacific region. ASEAN has already transformed Southeast Asia as an economic community with its current economic cooperation efforts at a critical level. One of the benefits foreseen in the onset of TPP is solve the problem of small overlapping FTAs by unifying trade standards to match those of other bigger trade agreements around the world. However, not all observers agree with this viewpoint because ASEAN has already established itself as a centralized economic body in Southeast Asia with clear and coherent rules and regulations regarding trade, security, and development among other things. Therefore, it begs the question whether the other six ASEAN countries should think about joining the TPP considering the economic benefits and costs of bigger markets, free flow of labor, technology, and capital?
Opportunities
As aforementioned, the TPP is made up of diverse nations with differing cultures, languages, development levels, and geographical locations. Therefore, the agreement presents a myriad of opportunities for countries in Southeast Asia to diversify their markets and investments. The major opportunity diversified international markets include reduction of risk and increasing profits in foreign securities (Abid, Leung, Mroua, and Wong, 2014 p.49). International diversification also provides a means for managing domestic crises and improving national portfolio performance. According to Abid et al, diversifying funds into foreign economies produce significant business merits in portfolio effectiveness beyond what can be realized by traditional market index diversification within countries and homogenous regions (2014, p.50).
In addition, cooperation among different cultures and regions leads to more creativity, promotes innovations, and...