Abstract
This chapter discusses the role of the ASEAN Comprehensive Investment Agreement (ACIA), which is one of the most important legal documents in the formation and functioning of the ASEAN Economic Community (AEC), especially from the perspective of the regionalisation of investment law and policy in the Asia-Pacific region.
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Notes
- 1.
As explained elsewhere in this volume, the regionalisation of investment law and policy in the Asia-Pacific region can be illustrated by the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP), and the Triangular Korea–Japan–China treaty. See also Chaisse (2015a, b, p. 563).
- 2.
This text draws on Julien Chaisse and Sufian Jusoh, The ASEAN Comprehensive Investment Agreement. The Regionalization of Laws and Policy on Foreign Investment (London: Edward Elgar, International Investment Law Series edited by Andrea K. Bjorklund and August Reinisch, Chaisse 2016 265 p). The book provides a full discussion of the many issues outlined here.
- 3.
He ASEAN 2025: Forging Ahead Together comprise five (5) documents namely: 1.1 Kuala Lumpur Declaration on ASEAN 2025: Forging Ahead Together; 1.2 ASEAN Community Vision 2025; 1.3 ASEAN Political-Security Community (APSC) Blueprint 2025; 1.4 ASEAN Economic Community (AEC) Blueprint 2025; and 1.5 ASEAN Socio-Cultural Community (ASCC) Blueprint 2025. The first of these five documents, i.e. the Kuala Lumpur Declaration on ASEAN 2025: Forging Ahead Together, is a political document that was signed by the ASEAN Leaders during the 27th ASEAN Summit. The Declaration, amongst others, adopts the ASEAN Community Vision 2025 and the three Community Blueprints 2025 as well as contains directives of the Leaders on their implementation. The Declaration decides that the Initiative for ASEAN Integration (IAI) Work Plan III and the ASEAN Connectivity 2025, which will be adopted in 2016, shall be an integral part of the ASEAN 2025: Forging Ahead Together.
- 4.
For ASEAN’s partners, ASEAN 2025 means a stronger, more visible and united ASEAN, with a greater role and voice in global economic fora and increased contribution to global economic governance. this is a concept of “Global ASEAN” was endorsed in “AEC 2025 Blueprint Forging Ahead Together” (paras 79 and 80).
- 5.
Timor Leste is now an observer country and waiting for full membership of ASEAN. For more information about ASEAN, please refer to the ASEAN official website www.asean.org.
- 6.
IMF’s Database on World Economic Outlook, July 2015.
- 7.
ASEAN’s first step towards regional integration started with the signing of the Bali Accord [Is this Accord or Concord—the others are all Concord?] II, which was endorsed at the Nineth ASEAN Summit in October 2003. Bali Concord II consists of three pillars, namely, the ASEAN Security Community (now the ASEAN Political-Security Community), the ASEAN Economic Community, and the ASEAN Socio-Cultural Community. Bali Concord II was followed by the Bali Concord III with the theme of ‘ASEAN Community in a Global Community of Nations’. Bali Concord III covers all the main pillars of ASEAN, namely, Political-Security Cooperation, Economic Cooperation, and Socio-cultural Cooperation. Bali Concord III promotes economic integration, which is: to enhance ASEAN’s effective participation in regional and global economic initiatives impacting on the region; to promote economic stability in strengthening macroeconomic coordination and promoting financial cooperation at the regional and global level; and to promote economic development which is to strengthen cooperation with relevant international organisations in promoting higher level of economic dynamism, sustained prosperity, and inclusive growth.
- 8.
OECD (2014).
- 9.
OECD (2014).
- 10.
OECD (2014).
- 11.
Economic Diplomacy, Trade Advocacy and Statistics Section, Department of Foreign Affairs and Trade, International Investment Australia 2014, Department of Foreign Affairs and Trade, Australia, September 2015, 16.
- 12.
OECD (2014).
- 13.
Chaisrisawatsuk and Chaisrisawatsuk (2007, p. 97).
- 14.
Sjoholm (2013).
- 15.
Goodman, Austrade (2015).
- 16.
This section and some of the subsequent paragraphs draw from the monograph by Julien Chaisse and Sufian Jusoh (forthcoming, Edward Elgar).
- 17.
As stated by Lester and Mercurio, many of the so-called FTAs favour certain countries in trade relations and are basically discriminatory rather than ‘free trade’. The term ‘PTAs’ [Should this be FTAs?] encompasses many different kinds of bilateral and regional trade agreements and it underscores their common denominator which is to establish preferences for the signatories over others in trade relations. See Lester and Mercurio (eds) (2009, p. 4).
- 18.
Jusoh (2014).
- 19.
The principle of ‘progressive liberalisation’ follows the mechanism in use within the WTO especially in relation to the liberalisation of the services sector under the GATS, which approach is also adopted by ASEAN in the AFAS. On the notion of ‘progressive liberalisation’, see Chaisse and Chakraborty (2013, p. 44). GATS recognises the need for the developing countries to liberalise their economy and trade over time. Article XIX of the GATS calls for achieving progressive higher liberalisation and promoting the interests of all participants on a mutually advantageous basis and for securing an overall balance of rights and obligations. The mandate further states that negotiations shall have due regard for national policy objectives and the level of development of individual members, both overall and in individual sectors. It also states that there shall be appropriate flexibility for individual developing countries for opening fewer sectors, liberalising fewer types of market transactions, progressively extending market access in line with their development situation and flexibility of attaching market access conditions to foreign service suppliers.
- 20.
In terms of liberalisation, ACIA enshrines provisions, which accommodate the expansion of scope of this Agreement to cover other sectors in the future, such as the Article 3(3) (f) ‘services incidental to manufacturing, agriculture, fishery, forestry, mining and quarrying; [Reaffirm our vision stated in AIA] and (g) any other sectors, as may be agreed upon by all Member States’.
- 21.
‘APEC Leaders’ Statement to Implement APEC Transparency Standards’ (2002/2003), available at www.apec.org/apec/leaders__declarations/2003_leadersstmtimplapectranspstd.html.
- 22.
United Nations Conference on Trade and Development (UNCTAD) (2004).
- 23.
OECD (2003).
- 24.
Article 11.
- 25.
The Parkerings v. Lithuania Award found that it is generally accepted that the variation of language between the formulation ‘protection’ and ‘full protection and security’ does not make a significant difference in the level of protection a host state is to provide. See Parkerings-Compagniet AS v. Republic of Lithuania, ICSID Case No. ARB/05/8, Award, 11th September, 2007, para 354.
- 26.
Here, a few relatively recent examples should suffice to demonstrate this fact. Firstly, UNCTAD’s World Investment Report (2003) held that ‘BITs play a minor role in influencing global FDI flows. […) The policy framework is at best enabling, having by itself little or no effect on FDI flows. […] As a rule, IIAs tend to make the regulatory framework more transparent, stable, predictable and secure—that is, they allow the economic determinants to assert themselves. And when IIAs reduce obstacles to FDI and the economic determinants are right, they can lead to more FDI. But it is difficult to identify the specific impact of the policy framework on FDI flows, given the interaction and relative importance of individual determinants.’ Newcombe and Paradell concluded that: ‘Although later studies provide support for a more robust relationship between IIAs (International Investment Agreements, author) and FDI levels, the existence of a causal relationship and the strength of that relationship remain disputed. […] Nevertheless, even if empirical evidence of a causal relationship is inconclusive, there remains strong competitive pressure for developing states to enter into IIAs and thereby signal to foreign investors that an enabling environment for foreign investment exists.’ Newcombe and Paradell (2009). Thirdly, Büthe and Milner develop a more direct link between BITs and FDI: ‘In sum, enforcement procedures established by (or as a consequence of) BITs enable foreign governments and private actors to impose higher economic and political costs on governments that renege on their policy commitments—and to do so more quickly—than in the absence of BITs. By increasing the likelihood and the time-discounted magnitude of the punishment for reneging, international institutions should reduce the time-inconsistency problem posed by FDI for developing country governments.’ Büthe and Milner (2009, pp. 171–224) at 187. Fourthly, Busse et al., on the basis of their empirical analysis, go even further and conclude that ‘BITs may even substitute for domestic institutions.’ Busse et al. (2010, pp. 147–77). Finally, Tobin and Rose-Ackerman argue on the basis of empirical evidence that ‘… the global surge in BITs has weakened the treaties as a tool for attracting FDI to a particular country’. Tobin and Rose-Ackerman (2010, pp. 1–32), at 2. See also Chaisse and Bellak (2011, p. 3), Chaisse (2013, p. 187).
- 27.
Berger et al. (2013, p. 247).
- 28.
Berger et al. (2013, p. 268).
- 29.
- 30.
Kenyon and Margalit (2014).
- 31.
- 32.
Kenyon and Margalit (2014).
- 33.
ASEAN, ASEAN Economic Report 2013–2014, FDI Development and Regional Value Chain (ASEAN Secretariat Jakarta 2014).
- 34.
For a discussion on ATIGA, see Ke (2014, p. 414).
- 35.
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Jusoh, S., Chaisse, J. (2017). Ten as One? Explaining ASEAN Regulation on Foreign Investment. In: Chaisse, J., Ishikawa, T., Jusoh, S. (eds) Asia's Changing International Investment Regime. International Law and the Global South. Springer, Singapore. https://doi.org/10.1007/978-981-10-5882-0_7
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