CPH Post ASEAN Supplement 2021

54TH ANNIVERSARY OF

ASEAN ASSOCIATION OF SOUTHEAST ASIAN NATIONS

INTRODUCTION

ALL EYES ON ASEAN From its humble beginnings 54 years ago, the Association of Southeast Asian Nations has emerged to become a global powerhouse

By ACC in Denmark coalescing into one bloc rather than acting as independent countries, ASEAN has given its members better leverage for value proposition across the world.

In 2020, ASEAN member states and five neighbouring countries – Australia, China, Japan, New Zealand and South Korea – signed the Regional Comprehensive Economic Partnership (RCEP), thus creating the world’s largest free trade agreement with the potential to significantly improve trade facilitation and market access across Asia.

RCEP covers trade in goods, trade in services, investment, e-commerce, intellectual property, government procurement and competition.

THE ACC IN DENMARK In Denmark, ASEAN is represented by four resident embassies – Indonesia, Philippines, Thailand and Viet Nam – which comprise the ASEAN Committee in Copenhagen (ACC).

It was founded by the embassies of Indonesia, Viet Nam and Thailand in 2014 and expanded to include the Philippines as its fourth member in 2019.

Over the years, the ACC has become an important partner in promoting ASEAN awareness and enhancement of ASEAN-Denmark relations.

The importance of the Association of Southeast Asian Nations (ASEAN) is growing. As a regional bloc it is the fifthlargest economy with a combined GDP of over 3 trillion US dollars and a population of more than 656 million people.

DIFFERENT FROM THE EU Analysts tend to compare and contrast ASEAN and the EU a lot, but the two unions are not really equivalent blocs.

Established on 8 August 1967, ASEAN comprises 10 countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Viet Nam.

Viewed through this lens, the Southeast Asian regional bloc is seen as one of the most developed examples of regional integration outside of the EU, as it has successfully brought diverse nations peacefully together to build a stronger community for its region.

In 2020, ASEAN and EU traded more than $220 billion in goods and services, making ASEAN the third largest trading partner of the EU, behind only the US and China.

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EU members share sovereignty through a strong, legally-based, central institution, while ASEAN is a consensus-based intergovernmental agency.

SHAPING THE REGION Since its inception, ASEAN has helped shape Southeast Asia and beyond. It has encouraged free trade and foreign investment, and by

SPECIAL FOCUS To commemorate the 54th anniversary of the founding of ASEAN, the next few pages will feature topics relevant to the growing relationship between the regional bloc and Denmark.

The first section (page 3) will cover ASEAN through the eyes of the ASEAN ambassadors in Denmark as they answer pressing questions on what ASEAN centrality means and how it relates to the EU and Denmark.

The second section (pages 4-5) will discuss ASEAN’s vision, identity and structure and its emerging significance as a political, economic and cultural community.

The final part (pages 6-7) will cover the potential of the Treaty of Amity and Cooperation (TAC) and RCEP, the new trade agreement that will shape global trade in the next decade.

INDONESIA

Ambassador Dewi Savitri Wahab What does ASEAN mean to your country?

Indonesia has adopted ASEAN as the cornerstone of its foreign policy. It regards ASEAN as central to achieving a stable regional order where peace and prosperity prevail. It has evolved into a strategic regional organisation with three community objectives: to become a political and security community, an economic community, and a social cultural community. The world needs collective efforts to address its transnational problems, and ASEAN as a regional organisation can play its part, whether it is the pandemic, terrorism, natural disasters, human trafficking, cyber security or money laundering.

What does it mean to your people?

It has greatly changed Southeast Asia’s economic landscape Since its inception, ASEAN has contributed to the alleviation of poverty, along with increased GDP and direct foreign investment. Both intra-ASEAN economic activities and visitor numbers have grown significantly over the past five decades. RCEP will encompass a combined GDP of some 17 trillion US dollars – 40 percent of world trade. But above everything, ASEAN’s future lies with its peoples. It will never stop striving to realise a more people-centred and people-orientated Southeast Asia region.

Can we find similar examples in other continents?

Most regional blocs are more of a ‘union’ or a ‘supranational’ type of organisation with rules-based and decision-making powers. Southeast Asia was considered too diverse in terms of its political, social and economic systems for this kind of approach.

Therefore, ASEAN is more of a community where ‘consensus-based’ approach and ‘ASEAN spirit’ are maintained and preserved in pursuing ASEAN co-operation.

PHILIPPINES

Ambassador Leo Herrera-Lim What role does RCEP play in the Philippines’ overall trade strategy?

RCEP will develop to be a significant platform to transform and boost the Philippine economy. We will see all the RCEP participants find complementary arrangements in the growing supply chains anchored in the region’s dynamic economy. In the near-term, I see RCEP contributing to a faster global economic recovery from COVID-19 and a welcome development in broadening Philippine trade with RCEP countries through improved trade and investment, enhanced transparency, integrated regional supply chains and strengthened economic co-operation. The trade deal is expected to encourage more production and manufacturing activities, which means more jobs and business opportunities for foreign and local companies.

How can Danish firms take advantage of the RCEP agreement?

RCEP is a market of at least 2.1 billion people currently accounting for 30 percent of the global GDP. The trade deal provides for a viable platform towards accessing raw materials, manufacturing and exports. Danish companies can relocate to a country like the Philippines and take advantage of the opportunities at hand: from accessing necessary production resources and/or the growing regional market, to benefiting from lower tariffs, simplified rules in trade and reduced administrative costs. Danish companies currently located in the Philippines know only too well the benefits of the many favourable business regulations and practices, English language fluency of the general population, and the exceptional skills and dedication of their personnel. Companies operating outside the RCEP will not find a similar market elsewhere with tremendous growth opportunities.

THAILAND

VIET NAM

Ambassador Sirilak Niyom

Ambassador Pham Thanh Dung

What does ASEAN mean to your country?

As a proud founding member we have participated in ASEAN’s transformation into a dynamic, rules-based, people-centred community, ranking today as the world’s fifth largest economy. Following RCEP, ASEAN will become an even larger market, presenting vast opportunities not only for businesses and peoples in the region but also globally.

What does ASEAN mean to your country?

ASEAN is a key pillar in Viet Nam’s foreign policy, as the principles and purposes of ASEAN, stated in the ASEAN Charter, are fully in line with Vietnam’s. ASEAN plays a significant role in maintaining peace, stability, neutrality, territorial integrity and non-interference, while strengthening equal, sustainable and mutually beneficial co-operation in Southeast Asia and Asia. Since 2021, Viet Nam has flown the ASEAN flag at the headquarters of all governmental agencies.

How does it keep you busy in Denmark?

Thailand is a founding member of ASEAN Committee in Copenhagen (ACC), and Denmark’s accession to the ASEAN’s Treaty of Amity and Cooperation (TAC) in 2020 will pave the way for deeper co-operation with the region – especially in the sustainability agenda. While Denmark eyes a 70 percent emissions reduction by 2030, ASEAN is also promoting green and sustainable growth. Thailand is proud to serve as ASEAN co-ordinator on sustainable development co-operation and hopes the ASEAN Centre for Sustainable Development Studies and Dialogue (ACSDSD), established during Thailand’s ASEAN Chairmanship in 2019, will play a catalytic role in enhancing co-operation within the region and beyond. At a national level, the Thai government has declared the ‘Bio-Circular-Green (BCG) Economy Model’ a national agenda and strategy for post COVID-19 sustainable and inclusive recovery.

2021 is a special year, we understand Yes. Thai-Danish co-operation within the BCG Economy Model is also one of our activities to celebrate the 400th anniversary of first contact between Thailand and Denmark in 2021. The two countries have enjoyed a long history of special and friendly relations, characterised by the cordial ties between the royal families, vibrant economic co-operation and people-to-people contacts.

How does Viet Nam benefit from being a member of ASEAN? Joining ASEAN in July 1995 marked an important milestone in Viet Nam’s regional and international integration. It helps Viet Nam to capitalise on opportunities: from expanding relations with partners and building national strength, to making Viet Nam a more proactive and responsible member of the international community.

How is RCEP helping the ASEAN countries to play a greater role on the global stage?

The Regional Comprehensive Economic Partnership (RCEP) agreement is the largest trade block in the world, contributing to 30 percent of global GDP (approximately 27 trillion USD). The finalisation of RCEP sends a strong message regarding ASEAN’s commitment to free and open trade and investment to protect the interests of the member states, especially those of developing countries such as Viet Nam, and ASEAN centrality. By joining RCEP, ASEAN can attract more foreign investment, thereby improving the ASEAN member states’ technology, production capacities and competitiveness. But more importantly, RCEP will make new room for economic recovery and development following the COVID-19 pandemic.

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REGIONAL, CONTINENTAL, GLOBAL How ASEAN is rapidly expanding its reach and countries like Denmark are being exposed to the potential of collaborations

By Mariesa Brahms

The VIVA ASEAN cultural troupe, a group of dancers from 10 ASEAN countries, performing at the Tivoli Gardens for the ASEAN Cultural Year 2019

The EU isn’t Europe and ASEAN isn’t Southeast Asia, but like its European counterpart in the years following its foundation, it is getting closer and closer.

Today, the Association of Southeast Asian Nations (ASEAN) comprises ten Asian countries, and while it hasn’t added to its number since Cambodia joined in 1999, it has created important multilateral platforms for dialogue with 16 other countries and the EU. EXPANDING TO 10 MEMBERS On the day its foundation stone was laid on 8 August 1967, the foreign ministers of original members Indonesia, Malaysia, Philippines, Thailand and Singapore signed the Bangkok Declaration, thus forming the

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inter-governmental organisation ASEAN.

made ASEAN a legal entity.

It held its first summit meeting in Bali, Indonesia in 1976. Brunei, Myanmar, Laos, Viet Nam and Cambodia joined the association during the 1980s and 90s.

"This is a momentous development as ASEAN is consolidating, integrating, and transforming itself into a community - Southeast Asia is no longer the bitterly divided, war-torn region it was in the 1960s and 1970s,” enthused Indonesian President Susilo Bambang Yudhoyono.

Today, the ten member states assemble to work as one for the mutual purpose of achieving economic, social and cultural development within the region of Southeast Asia and international collaborations across the globe.

2008: MOMENTOUS DEVELOPMENT 2008 was a hugely significant year for ASEAN as it saw the launching of the ASEAN Charter, which AFP reported was moving the region “closer to an EU-style community". The Charter

ASEAN will seek a more vigorous role in Asian and global affairs at a time when the international system is experiencing a seismic shift.

MORE POLITICAL COMMITMENT The ASEAN Charter enabled its members to politically engage at a top level. It increased the number of meetings held within the

organisation and assigned the member states’ foreign ministers with a wider array of tasks.

The result has been more political commitments — for example, to abolish weapons of mass destruction and make efforts towards a more stable and prosperous Southeast Asia.

Economic commitments have resulted in the introduction of more multilateral trade rules and tearing down of regional trade barriers.

The Charter also stipulates that a minimum of two-thirds of the volume of work has to be people-orientated, hence contributing to a community-building process.

ASEAN SUMMIT The affairs of the association are overseen by the ASEAN Summit, its highest authority, which is attended by the heads of government of all member states.

The Summit is held twice a year - but also in case of emergency situations that call for more drastic measures or discussions, such as the April 2020 summit in respect to the coronavirus pandemic.

The ASEAN Coordinating Council (ACC) is responsible for organising the Summits, as well as implementing all Summit decisions.

ASEAN COMMUNITY The ASEAN community is supported by three pillars: the ASEAN Political Security Community (APSC), the ASEAN Economic Council (AEC), and the ASEAN Socio-Cultural Community (ASCC).

APSC gathers members of ministerial rank under its umbrella to work on the realisation of the political security community council, the APSC Blueprint. It also takes on matters that cannot be directly confined to any of the three councils.

AEC pushes for economic progress, the strengthening of existing bonds and creating new ones along the way.

The ASCC operates as ASEAN’s social pillar.

Charged with working towards a socio-cultural community, it sets out to achieve inclusive and resilient goals on behalf of the member states.

A LARGER GLOBAL REACH What started as the idea to establish regional co-operation, both economic and social, between the member states, has resulted in the establishment of 54 committees across the world to promote ASEAN’s interests in various host countries and cultures.

In total, ASEAN has established 21 committees within Europe, of which one is based in Copenhagen.

Responding to one of ASEAN’s acclaimed aims of “maintaining close and beneficial

From left to right, Former Ambassador Theerakun Niyom, spouse of the Thai Ambassador, HE Philippine Ambassador Leo Herrera-Lim, Mrs Fidelis Herrera-Lim, spouse of the Philippine Ambassador, Mrs Quynh Chi Chu, spouse of the Vietnamese Ambassador, HE Thai Ambassador Sirilak Niyom, HE Indonesian Ambassador Dewi Savitri Wahab, HE Vietnamese Ambassador Thanh Dung Pham, Mr Thanapoom Rimchala, Deputy Chief of Mission of the Embassy of Thailand in Denmark

cooperation with existing international and regional organisations with similar aims and purposes”, ASEAN exports its influence across the world, holding committees on all continents.

ASEAN COPENHAGEN COMMITTEE Established in August 2014, the ASEAN Committee in Copenhagen (ACC) has set out its goal to increase awareness for political, societal and cultural matters here in Denmark.

The participating member states within the ACC are Indonesia, the Philippines, Thailand, and Viet Nam. While these nations’ embassies remain independent from ASEAN, they make the association's matters heard regarding social and economic policies.

GROWING INFLUENCE With their help, the awareness and interest in ASEAN has significantly increased in Denmark.

Danish governmental, economic and diplomatic corps work closely with ASEAN, which is a great help to the Southeast Asian community, establishing the association as a partner of the Danish government.

One example of this bond was the participation of the former Danish foreign minister, Kristian Jensen, at the ASEAN Ministerial Meeting that took place in 2016 and gathered EU politicians together with ASEAN’s board.

Simultaneously, ASEAN has managed to strengthen the focus on political interests in the country by establishing its Economic Community, which responds to the steadily increasing interest of local economic players to cooperate with ASEAN.

STRONG FOUNDATIONS In order to further develop the bond between the embassies the ACC started to frequently host joint activities in 2016.

Under the umbrella of sports and familyfriendly events, the embassies meet on a regular basis, creating an even and stable ground to maintain the fruitful co-operation on a political level.

These activities, which are overseen by a working group charged with ensuring and strengthening the interaction between participating officials, have allowed the ACC to grow a prosperous and stable terrain that further partnerships can now take advantage of.

EYES ON THE FUTURE The focus of the ACC in Denmark is very much on the future, with an aim to generate long-lasting and sustainable understanding of Southeast Asian matters that would otherwise not be possible.

From their embassies in Copenhagen, the ASEAN member states are holding out their hand to collaborate with the Danes and create collaborations with economic stakeholders. Their events aim to create a mutual sense of both the differences and the potential within this multicultural sphere.

An indicator of the similarities shared by Denmark and ASEAN can be seen in the latest issue of the ASEAN Magazine, which focus on sustainability and the measures that need to be taken in order to make city life more environmentally friendly.

Download the issue from the official ASEAN website.

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BROAD OPPORTUNITIES IN ASEAN The potential involved in the Regional Comprehensive Economic Partnership, as well as the Treaty of Amity and Cooperation in Southeast Asia (TAC), is immense

By Lena Hunter

The ACC members with Danish Foreign Minister Jeppe Koffod (centre)

Today, Southeast Asia is regarded as a powerhouse of global production and investment. But it hasn’t always been that way.

connectedness, several supportive agreements have been enforced to enhance international co-operation.

(Singapore), Ferdinand Marcos (Philippines), Datuk Hussein Onn (Malaysia), Kukrit Pramoj (Thailand), and Suharto (Indonesia).

In the second half of the 20th century, confrontations in Indonesia following the formation of Malaysia, Singapore’s ascension to independence, and Thailand’s efforts to distance itself from upheavals in Indochina led to a fractured socio-political landscape in the region.

Two such agreements of particular importance are the Treaty of Amity and Cooperation in Southeast Asia (TAC) and the Regional Comprehensive Economic Partnership (RCEP).

Papua New Guinea was the first country outside ASEAN to sign the treaty in 1989, the United States followed in 2009, and then the European Union in 2012. UN General Assembly also endorsed the treaty, stating that “the purposes and principles of the TAC [are] in accordance with the Charter of the United Nations.”

It was against this backdrop that the founding members of the Association of Southeast Asian Nations (ASEAN) sought to build a more secure Southeast Asia. It was clear that individual nation building, political stability and economic development were inseparable from regional peace and stability.

So, under ASEAN’s foundational principles of peace, prosperity, sustainability and

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The spirit of the TAC peace treaty is to create a ‘no-war regime’ through interstate guidelines designed to encourage development and prosperity, whereas the RCEP is the largest regional free trade agreement (FTA) in the world.

THE TAC IN BRIEF The TAC was signed on 24 February 1976 in Bali, Indonesia by the leaders of the original members of ASEAN: Lee Kuan Yew

The principles cited are: (1) mutual respect for the independence, sovereignty, equality, territorial integrity and national identity of all nations, (2) the right of every state to lead its national existence free from external interference, subversion or coercion, (3) non-interference in the internal affairs of one another, (4) settlement of differences or

The ACC Members and the ACC Working Group

disputes by peaceful means, (5) renunciation of the threat or use of force, and (6) effective co-operation among themselves.

MILESTONES OF THE TREATY So what has the TAC achieved as we approach the 50-year anniversary of its formation?

While the original TAC symbolised simple neighbourly co-operation, it gradually came to be instrumental in the ASEAN’s regional co-operation and dialogue with 27 countries and the EU. When Viet Nam expressed desire to join ASEAN, it was asked to sign the TAC beforehand. This was the start of a shift that saw the TAC become a necessary condition for joining ASEAN. Hereby, the TAC became a stepping-stone connecting ASEAN with countries outside the region.

traded in the region, an inclusive approach to the enforcement of intellectual property, and a special focus on creating a conducive environment for e-commerce. It also includes rules about government procurement and provision of technical assistance – especially to the least developed signatories (Cambodia, Myanmar and Laos). Many of these are features that did not feature on previous FTAs. RCEP brings together the 10 ASEAN members and five regional partner countries (with which ASEAN has existing FTAs): Australia, China, Japan, South Korea and New Zealand.

Combined, RCEP’s 15 participants account for about 30 percent ($26.1 trillion) of global GDP, 30 percent (2.3 billion) of the world’s population, and 25 percent ($12.7 trillion) of global trade in goods and services.

Professor Susumu Yamakage of Aoyama Gakuin University points out that “there has been no serious incident threatening regional peace since the TAC was signed.” It’s also noteworthy that when Indonesia and Malaysia submitted their territorial dispute to the International Court of Justice, a spirit of amicable co-operation based on their membership of TAC was explicitly highlighted.

STRENGTH IN DIVERSITY A defining strength of RCEP is its member diversity. The low-income countries nevertheless have a high agricultural contribution to GDP, while many of the high-income members are leaders in techmanufacture. And several, most notably Australia, Indonesia, Laos and Myanmar, are resource-rich.

TAC also acts as a supportive and ratifying force to the ASEAN itself by upholding security principles of non-interference and consensusbased decision-making. The peaceful political ecosystem that the TAC created facilitated major strides in development, trade, and Southeast Asia’s participation in the global value chain.

The impressive institutional strength of RCEP was demonstrated when it facilitated trade deals between three RCEP countries that did not previously have a FTA: Japan-Korea and Japan-China.

RCEP: THE WORLD’S LARGEST FTA One such major stride is the Regional Comprehensive Economic Partnership (RCEP). After several rounds of negotiation beginning in 2012, the largest FTA in the world was signed on 15 November 2020 and is set to come into effect in early 2022.

Some key benefits of the RCEP include duty-free tariffs on a percentage of goods

But while intra-regional trade and investment is a key objective for any economic partnership, RCEP also has major significance as a global trade and investment bloc. In fact, 70 percent of foreign direct investment (FDI) flows in RCEP come from non-RCEP countries.

EXPLOSIVE GROWTH What’s more, that figure has grown quickly: outsider trading increased by 34 percent between 2010 and 2018. While global FDI has been stagnant for the past decade, the RCEP group showed a consistent upward trend

until the COVID-19 pandemic.

That may not be surprising, given that the group accounts for 50 percent of the world’s manufacturing output, 50 percent of automotive production and a staggering 70 percent of electronics production.

But the intra-regional value is growing even faster. The global value chain trade among RCEP members has grown by over 50 percent since 2010. Given recent shifts in trade and investment patterns in the post-COVID climate, this is particularly important.

THE FUTURE OF RCEP Looking ahead, to drive post-pandemic recovery, we can most likely expect investment policy priorities for the group to centre on sustainability, resilience and development, with a focus on infrastructure, clean energy and healthcare.

Key elements of the RCEP framework will be crucial for post-pandemic recovery and regional transformation – especially the liberalisation of services and the digital transformation of key services in e-commerce, finance and telecommunications.

The RCEP has immense potential to expand in terms of green impact. Despite attracting several top-source countries for project finance, it accounts for relatively few sustainable technology projects when you consider its share of global FDI .

With that in mind, a focused economic drive to acquire FDI in green projects may enrich the whole region. Plus, considering that the LDC signatories receive 70-90 percent of their FDI from RCEP members, economic co-operation within the group could boost project finance in infrastructure and their participation in the global value chain.

The value of RCEP initiatives both inside and outside the group continues to grow. Overall, the RCEP is predicted to add 209 billion US dollars to world incomes and 500 billion to world trade by 2030.

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