UN UNIVERSITY LECTURES: 18

European and ASEAN Integration Processes:
Similar Models?

H.E. Mr. Lim Chin Beng
Ambassador of the Republic of Singapore to Japan

Presentations Made at a UNU Public Forum
on 8 May 1997
at the United Nations University
Tokyo, Japan

Opening Address

Ladies and Gentlemen,

The theme for today's discussion is a comparison of "European and ASEAN Integration."

As your presence here indicates, this is a very timely topic. Indeed, it is clear that the form and the extent of integration in the European Union and the Association of South East Asian Nations (ASEAN) have major implications for the countries involved in the process. On the one hand, Europe represents the most tightly integrated regional entity in the world. Stemming from both security and economic concerns, the EU is growing, although not always smoothly, into a community of industrialized nations with very formal institutions. On the other hand, ASEAN is a group of newly industrializing countries, bringing together Singapore, Thailand, Malaysia, Indonesia, Brunei Darussalam, the Philippines and Viet Nam. Also, ASEAN institutions remain less formal than European institutions. We could call it "a community under construction". In the future, both regions will face the challenge of incorporating new members while adapting, in their different ways, to changing international and domestic environments.

However, the issue of European integration and ASEAN integration is of much broader interest than to just European people and South-East Asian people. Integration in Europe and integration in ASEAN are part of a historical process that has deep implications for the whole international community. It is becoming increasingly clear that the nature and success of regional integration will help define the shape of the world in the twenty-first century.

In this regard, our attention should be drawn to two key issues. First, the growth of regional groupings is one of the most striking trends in contemporary international relations. In addition to the EU and ASEAN, we have NAFTA in North America, the broad APEC group, MERCOSUR in South America, and SADCC in southern Africa, for example. These other regions cannot ignore the experience of integration in the European Union and ASEAN. They need to look at the lessons contained in the experiences of European integration and ASEAN integration, not only regarding their successes and achievements, but also regarding their shortcomings and difficulties. Second, and perhaps more importantly, there are global implications to the issue of European integration and ASEAN integration. In that context one has to look at the following issues:

• How will regional forces interact with global ones?
• Will regional integration be a stepping stone or a stumbling block towards greater economic globalization?
• Will regional forces act as a stabilizing influence on security issues?
• What will be the relationship between regional institutions and multilateral ones?

Trying to look for answers to these types of questions is one of the raisons d'๊tre of the United Nations University. We try to fill the gap between long-term reflection and pressing global problems. We try to be a bridge between international organizations, national governments and civil society. And to do this, we bring together scholars and practitioners, diplomats and policy makers.

In order to address the issues of European integration and ASEAN integration, we have this afternoon two very distinguished speakers: Ambassador Pierre Gramegna from Luxembourg and Ambassador Lim Chin Beng from Singapore. They are both very qualified for this task and I greatly look forward to their presentations.

Ambassador Gramegna has worked at the Ministry of Foreign Affairs in Luxembourg and was posted to Paris and San Francisco prior to his current posting as the Ambassador of Luxembourg to Japan. He will give us this afternoon an insight into the history, current issues and future agenda of the European Union.

Ambassador Lim has worked for the Singapore Civil Service and has been Managing Director of Singapore Airlines. Since 1991, he has been the Ambassador of the Republic of Singapore to Japan. His presentation will focus on the process of ASEAN integration.

Let me add a brief note on the countries of today's speakers. The roles of Luxembourg and Singapore are sometimes overlooked because of their modest size. Experience shows, however, that they can play, and in fact they do play, a very valuable part, especially as a facilitator between larger countries. Therefore, it is not an exaggeration to say that they have been, and are, at the heart of the integration process, both in Europe and South- East Asia. One final point. After the presentations, Professor Hiroshi Okuma, a specialist on international political economy and regional integration from the Faculty of Law at Seijo University, will comment on the topic. And I thank him for that. Then, we will open the floor to questions.

Allow me now to hand over to our speakers.

Thank you very much.

Heitor Gurgulino de Souza
Rector
The United Nations University

EU and ASEAN Integration Processes: Similar Models?

"World Peace can only be maintained through creative efforts as deep as the dangers threatening this peace. By pooling core economic sectors and creating a new High Authority whose decisions will bind France, Germany and the countries wishing to join, it will be possible to achieve the first foundations of a European federation indispensable for the preservation of peace." This is the key passage of the speech that launched the European integration process. This speech was given by Robert Schuman in front of the clock of the Ministry of Foreign Affairs of France on 9 May 1950. Tomorrow will be the forty-seventh anniversary of this historic date. 9 May is today celebrated as Europe's official holiday. Why? I will never weary of repeating that Robert Schuman's vision is one of the most extraordinary deeds of foreign policy in this century! On 9 May 1950 the end of the Second World War was just 5 years old and Germans and French had waged war three times in the last 75 years! In such a difficult context, the French foreign minister, advised by another founding father of Europe, Mr. Jean Monnet, dared suggesting that France and Germany should pool their coal and steel, which were the very products considered to be the core of the weapons industry.

Robert Schuman, who was born in Luxembourg and had lived all his youth in the eastern part of France, had a good understanding of both French and German culture. So has the Luxembourg government, which has always played the part of a go-between in European negotiations. Having suffered directly from the wars on the continent, our small country chose right from the start in 1952 to link its fate to the construction of a united Europe. This choice has proved both wise and beneficial to Luxembourg.

The spirit and the scope of the Schuman speech live on today. They have flourished and are the terms of reference for everyone who wants to study or understand what the European Union is all about. The EU today counts 15 member states, of which all are Christian and pluralistic democracies. They are all developed countries even if the GDP per capita of the richest member is more than three times that of the poorest. So called structural funds have been set up in order to reduce this imbalance and help the poorer member states of the EU upgrade their infrastructure. In order to compare ASEAN and the EU, one could focus on differences in religious and political systems of the member states. And this would certainly reveal interesting aspects and explain some crucial differences. While bearing in mind that each international organization is the result of the complexity and the political objectives of its member states, my wish here is to focus on the functioning of both ASEAN and the EU as international organizations.

To do so I would like first to compare the objectives and scope of cooperation of ASEAN and the EU. I will afterwards analyse the institutional set-up of the EU and compare it to that of ASEAN. Finally I will describe the interaction of the EU and ASEAN in facing future challenges.

1. Objectives and Scope of Cooperation in the EU and ASEAN

May I state in a nutshell, that the creation of ASEAN was of a completely different nature. The external threat of expanding communism seems to have been one of the major reasons cementing the need of cooperation for the five founding members of ASEAN. The motivation came from external factors and they were of a political nature whereas the European integration was generated by the wish to overcome lasting contention amongst the founding members. As a result economic cooperation between the ASEAN countries themselves has come to the forefront only later and lately. A closer look at the treaty establishing ASEAN confirms this analysis.

This treaty is more a framework agreement exhorting the member countries to work together and to cooperate. It does not, compared to the Treaty of Rome for the EU, set precise goals to achieve by a certain date. The goals being of a general nature they have to be achieved on a case by case basis through consensus in a typical intergovernmental type of cooperation.

On the contrary, the scope of the economic cooperation in the European Union is much greater than the customs union. A common agricultural policy has been established from the start and strong cooperation in the field of nuclear power is enshrined in the separate treaty of EURATOM. But even beyond these, the treaty aims at establishing, through transitional phases, the free flow not only of goods but also of services, persons and capital. Few people remember today that the free flow of workers in the European Economic Community has been granted since 1968! But at that time the EEC had not yet become the Common Market it claimed to be. A close analysis shows that Europe was still quite a fragmented economic area. It would only become a true single market after the launch of a major liberalizing effort achieved in the Single European Act which was signed in Luxembourg in 1985. This programme contained around 300 proposals aiming at truly achieving the free flow of goods, services, capital and people by 1993. The scope of this effort has often been underestimated.

First of all, the result of the implementation of the Single European Act has created a homogeneous market of 370 million consumers. They are offered a wide variety of goods and services at a competitive price. Not only workers but also students and retired people have the freedom to choose where they want to live. Minimum social standards throughout the EU have been adopted. Time-consuming border formalities have all but disappeared. Companies can sell goods and offer services in any country of the EU just as easily as if they were trading at home. Capital restrictions have been lifted, enabling individuals and companies to invest their money in the currency or the market of their choice. This was a very dramatic change for some member countries which used to have foreign exchange controls. It is amazing how quickly these changes became a fact of life once they were accepted on a European level. While I was posted in the United States, I could observe how American companies acknowledged how Europe was really becoming a single market, offering new prospects of development not only to European companies but also to American ones. The same obviously goes for Asian business. The free flow of persons is nearly achieved. European citizens can travel freely between Benelux, Germany, France, Spain and Portugal without border controls. A common visa policy has been agreed upon among these countries which have signed the Schengen Agreement. Most other EU countries are preparing to join.

These are no small achievements, and no other international organization in the world can claim such a degree of integration. In fact, you could call the EU a free-trade bulldozer. Even in member countries that used to have a very protectionist approach to trade, behaviour has changed. This transformation has been achieved with due respect of cultural or traditional differences. Therefore the free flow of goods, services and capital is based on the mutual recognition of national legislation. So companies use their own national licences as passports to do business in other EU countries as well.

The fall of the Berlin Wall as well as the growing economic interdependence in Europe have called for close political cooperation and an economic and monetary union. This was to be the task of the now famous Maastricht Treaty which entered into force in 1993. The economic and monetary union is described in your newspapers everyday and I don't think it would be appropriate here to elaborate on this issue except for underlining that there is no historic precedent to such an extensive and elaborate currency union, neither in ASEAN nor anywhere else. A closer cooperation to achieve a real common foreign and security policy was also agreed to in the Maastricht Treaty. Both the political cooperation and the common currency have brought about only a slight revamping of the EU institutional set-up. Let us therefore switch to the second part of the presentation focusing on the comparison of the institutions of the EU and ASEAN.

2. Institutional Set-up of the EU and ASEAN

Unlike ASEAN, which has a rather simple set-up, the EU has four main institutions. First the Council of Ministers, which is the central body around which most of the life of the EU rotates. It is both a political and legislative body. It is the decision-making institution. It meets once a month at the level of foreign ministers. The foreign minister is regarded as his country's main representative in the Council, but ministers of agriculture, transport, economy, finance, social affairs, industry, environment and many others also meet, but less frequently.

The Maastricht Treaty has also made this Council responsible for intergovernmental cooperation in the EU, i.e. common foreign and security policy and justice and home affairs. The heads of state or government also meet normally twice a year together with the president of the commission as the European Council, accompanied by their foreign ministers. The presidency of the Council rotates among member states at six-month intervals.

There is an equivalent of these bodies in ASEAN. But the council of ministers of ASEAN normally meets only once a year. This council shapes common positions amongst member states, but it does not have a legislative function. This is a major difference between ASEAN and the EU.

The Council of the EU takes decisions, depending on the subject, upon unanimity or upon qualified majority. When qualified majority is used, the EU stops being an intergovernmental organization like ASEAN. This is only possible because other institutions have been established in the treaties. They ensure a division of power between the purely national interests voiced in the Council and the interests of the whole EU, normally represented by the Commission.

The European Commission counts 20 members appointed by agreement between the member governments. Throughout their four-year terms of office, members of the Commission must remain independent from the governments and the Council. The Council cannot remove any member of the Commission from office. The European Parliament can, however, pass a motion of censure compelling the Commission to resign as a body. The Commission is the guardian of the treaties. Its role is to act and to serve as the executive arm of the communities, to initiate community policy and to defend the community interest in the Council. In the legislative process the Commission is the sole body to have the right to draft a proposal. There is no institution equivalent to the Commission in ASEAN.

The third important institution in the EU is the European Parliament, which since 1979 has been elected directly by the citizens of Europe. The composition of the Parliament makes it a fully integrated EU institution. There are no national sections, only Europe-wide political groups. Both the European Single Act and the Maastricht Treaty have boosted the legislative power of the European Parliament, which used to be limited to some budgetary issues. Under the present rules there are three different tracks of decision-making in the EU, called co-decision, cooperation procedure and assent procedure. In the co-decision procedure, the European Parliament has gained a legislative power that comes quite close to the Council's. There is no comparable institution in ASEAN.

The Court of Justice of the European Union is composed of 13 judges and six advocates general. The Court is requested to rule on the interpretation or to assess the validity of the EU law. The Court's procedure for dealing with cases is quite similar to that of the highest courts of appeal in the member states. Both institutions and individuals must comply with the Court's judgement, which not only settles a case but also interprets and clarifies the treaties. The Court is also called upon to give preliminary rulings on questions referred to it by national courts. In the Maastricht Treaty the Court was given the power to enforce monetary penalties to oblige member states to comply with the Court's rulings.

Nothing like this exists in ASEAN. The founding treaty of ASEAN describes only the possibility of setting up a high council, of which the members would be ministers of the member countries. Its role is limited to ad hoc dispute settlement.

Besides those main institutions, the EU treaties have established a Court of Auditors and the Economic and Social Committee and the European Investment Bank. The Maastricht Treaty has created two other institutions which deserve special attention.

First the European Monetary Institute, which was established in 1994 as a forerunner of the European Central Bank to be established in 1999, when the third phase of the economic and monetary union will start. The ECB will take over from the national central banks all the monetary supervising power. It is obviously a body with extensive clout which is further enhanced by the fact that it has been enshrined in the Treaty of Maastricht that this institution shall be independent from the national governments. Only time will tell if the real power of the ECB will match the one it is entitled to in the treaties. Whatever the result, the ECB is a clear testimony of the supranational powers of EU institutions.

Noticing the growing power of EU institutions, the governments introduced a new principle in the Maastricht Treaty. It is called the Principle of Subsidiarity, which sets limits to what the European Union, as opposed to national governments, is able to do. Subsidiarity limits EU activity to those areas where common action of the EU would be more efficient than action of individual member states alone. The creation of a committee of the regions by the Maastricht Treaty is to be seen as an implementation of this subsidiarity principle and as an attempt to associate regions and local authorities to the European integration process.

You might wonder why I give such importance to the analysis of the institutions of the EU in the context of a comparison with ASEAN. It is my belief that the balance of power between the Council and the Commission, European Parliament and the Court is a precondition for achieving the single market and the EMU. In fields where the member states were reluctant to share power with independent bodies, the achievements are less impressive. Take for example the common foreign and security policy of the EU. This new chapter of the Maastricht Treaty does not give to the Commission the same prerogatives it enjoys in the Treaty of Rome. Member countries have in fact wished to keep the common foreign policy an intergovernmental cooperation. As a result, common foreign policy decisions happen only in non-confrontational matters but are often lacking on sensitive subjects. A recent example of the absence of common positions was registered in the split attitude of EU member states towards human rights in China.

So the role of the institutional set-up is paramount. Robert Schuman foresaw this in 1950 when he was calling for an independent High Authority. For the time being, ASEAN doesn't have an independent, supranational body and therefore the common positions can only mature through consensus with the lowest common denominator.

As a conclusion of this part, I might state that institutionally ASEAN and the EU are quite different. This does not mean that they do not face sometimes similar situations. Actually it seems to me that in the challenges that both organizations are facing right now, there is a common rationale which I would like to look at now in part three of my presentation.

3. The Challenges of ASEAN and the EU

The regular political dialogue between the EU and ASEAN is particularly interesting because it allows an exchange of ideas between 15 and 7 countries which all speak with one voice. Extracting common positions in the EU and ASEAN has become a very valuable tool not only for bilateral contacts but also in other international organizations, like the United Nations or ASEM.

In fact working out common positions in ASEAN and the EU has become a habit which we regard both in ASEAN and the EU as quite natural. But it should be considered a high achievement of both organizations. It probably is our clearest common feature, where both the background and the spirit of the organizations come closest.

This proves quite true in the context of the Asia-Europe meetings which were successfully launched in Bangkok last year. This ASEM meeting was the first time representatives from so many important nations of Asia and Europe could exchange views freely and directly at the level of heads of state or government. In ASEM the European side is composed of the EU while the Asian side encompasses ASEAN, China, Korea and Japan. ASEAN brings its experience as an integrated organization and is instrumental in helping forge common positions on the Asian side. ASEAN countries have been very quick to act as a group and have launched many ideas in the follow-up of the Bangkok ASEM summit, thus showing ASEAN's maturity and efficiency as an international organization.

The EU celebrates 40 years of existence this year and ASEAN its thirtieth anniversary. This time-span has shown both of us that, by acting together, we can better influence the outside world. Even if the process of establishing common positions inside our organizations might sometimes appear cumbersome or slow, it is a rewarding effort. Be it in the United Nations or elsewhere, our respective common positions will bear more fruit than a national approach.

I want to mention the last example I recently noticed. The ASEAN countries have agreed that the issue of labour standards should be dealt with in the International Labour Organization and not in the World Trade Organization. In the EU we have agreed on exactly the opposite: the crucial point for both our organizations is to each elaborate a common unequivocal position, thus maximizing our chances of being heard and influencing others.

Influencing other countries obviously raises the question of the interaction of regional organizations with multilateral worldwide organizations. Opening this discussion here would lead us too far but I would like to briefly touch upon trade issues in this context. The European Union is today one of the most open markets in the world. How has this been achieved? First we concentrated on how best to open the borders dividing ourselves. This enhanced trade and made our companies larger and more efficient. But quickly the European market proved to be too small for companies. In short, once you liberalize trade in a region, it will in the end spill over. The global village with telecommunications networking the whole planet clearly enhances and speeds up this process. So does the most-favoured-nation clause. In the medium and long term, integrated regional markets are bound to associate with other regional markets.

Let's look at another example, the United Nations. Working out common decisions with 170 countries is close to impossible. Bridging the gaps between several coordinated regional groupings is far more efficient. The EU and ASEAN have also to discharge their responsibilities in multilateral forums in such a way as to become reliable and respected partners. In their relations with the outside world, ASEAN and the EU clearly follow a similar path and are motivated by similar aspirations. Their difference lies in the internal way of functioning, as I have described in part two of my speech. I would like to conclude with a coming challenge for both ASEAN and the EU which shows how the working process inside both our organizations is different. And this coming challenge is the enlargement of ASEAN and of the EU.

I would not like to comment extensively on the likely enlargement of ASEAN, which is politically very sensitive. But it is interesting to notice that the decision to enlarge ASEAN by integrating at the same time Myanmar, Laos and Cambodia was decided by the heads of state of the member countries of ASEAN. How is the enlargement of the EU to be decided?

The process is much more complex. Twelve countries have applied to join the EU, many of those being countries from Central Europe. To most an answer has not yet been given. The European Commission, which is the executive body of the EU, has not yet made recommendations, nor has it received a detailed mandate by the Council on how to negotiate. When, after several years of negotiation, agreement is reached with an applying member, this agreement needs the approval of the European Parliament, whose power on these matters has been increased since the Maastricht Treaty. The European Parliament has in the past withheld its assent on agreements with countries whose human rights record leaves much to be desired.

What does this very long EU procedure of enlargement show? First that the decision depends not only on the member states. Their approval is necessary but not sufficient. The Commission must prepare the negotiation in such a way that it preserves the interests of the Community. Second the European Parliament, which represents the populations of Europe, has the power of assent. This interaction between the intergovernmental body, the executive branch of the EU and of public opinion through the European Parliament demonstrates how different the EU and ASEAN are. The model of EU integration is definitely more complex, more integrated than the one of ASEAN. While ASEAN and the EU share a common inspiration, mainly in their external relations, their internal workings for the time being remain quite different, as does the scope of their integration.

European and ASEAN Integration: Similar Models?

Prof. Heitor Gurgulino de Souza, Rector, United Nations University, His Excellency Pierre Gramegna, Ambassador of Luxembourg, Prof. Hiroshi Okuma, Ladies and Gentlemen,

I am honoured and somewhat daunted by the prospect of speaking to you on the subject of the European and Asian experiences in regional integration. You will notice that Ambassador Gramegna and I represent the smallest members in the EU and ASEAN respectively, and I wonder whether this is purely coincidental or planned. Both Luxembourg and Singapore are constrained by size, population and lack of natural resources. However, both countries have tried to meet these challenges by association with regional organizations, and, if I may say so, successfully. By cooperating with bigger partners within the region, small countries not only sustain their development, but they are also able to contribute to the larger interests of the region to which they belong.

I was asked to give a broad account of ASEAN's history, its structure and future direction. As this year marks the thirtieth anniversary of ASEAN, I think the organizers have chosen a most appropriate subject for this afternoon's forum. I will first attempt to examine the reasons behind ASEAN's success despite three decades of continuing challenges. I will then briefly discuss the structure of ASEAN and finally, I will explore the possible course which ASEAN will take in the coming century.

South-East Asia has been one of the fastest growing regions in the world for more than a decade. Many people will agree that the current stability and prosperity of South-East Asia are due very much to the efforts of ASEAN, the regional organization which presently comprises seven members and will expand to include the remaining three South-East Asian states in the near future.

Prior to the founding of ASEAN in 1967, the prospects for South-East Asia were not at all bright. In terms of religion, ethnicity, culture and history, South-East Asia is one of the most diverse regions in the world. There were political disputes among the different nations in the region. In 1963, Indonesia was having a military confrontation with the newly formed Malaysia. In 1965, Singapore was separated from Malaysia. There were serious and bloody racial riots between Muslim Malays and ethnic Chinese. The Philippines, Malaysia and Indonesia had unresolved territorial disputes. Domestic communist insurgencies posed a serious challenge to all the countries in South-East Asia. The war in Indo-China was a real and serious threat to the survival of these young nations. It was these domestic and external dangers that forced our leaders to come together and form ASEAN.

Due to the diverse cultural, economic, historical and racial background of the countries forming ASEAN, few people had any hope of ASEAN succeeding at all. Fortunately, our leaders realized the dangers we faced if ASEAN did not succeed and worked very hard to make it work. Indonesia led the way in building a solid foundation for ASEAN. Being the largest member in terms of geographical size and population, Indonesia took the lead in cultivating the practice of decision by consensus. Ever refraining from imposing its will on others, Indonesia ensured that this pattern of behaviour became the modus operandi of ASEAN. Unique to this organization, decision by consensus has sometimes been referred to rather jealously by others as the "ASEAN magic".

Throughout the period from the fall of Saigon in 1975 and Phnom Penh in 1978 to the Paris Peace Accords on Cambodia in 1991, ASEAN members learnt to work closely with one another towards a common goal. Bonds of friendship and trust among the members were enhanced over the years. The crucial years of 1975 to 1991 saw not only the consolidation and growth of ASEAN as a credible regional organization but also the economic development of the region. The ASEAN magic, which enhanced confidence and trust among member states, provided the region with the much-needed stability for trade and investment.

The sense of common destiny was most evident in the admission of Viet Nam into the ASEAN family at the end of the Cambodian conflict. This was the first step towards the ultimate dream of ASEAN, to unite all 10 South-East Asian countries, including Cambodia, Laos and Myanmar, as one family for the first time in the region's history. Viet Nam's membership makes China ASEAN's immediate neighbour, so too will India be when Myanmar becomes a member.

Let me now discuss briefly the structure of ASEAN. The machinery for ASEAN cooperation is designed in such a way that decisions are not made by a huge ASEAN standing bureaucracy but by regular contacts between the ministers and officials of the ASEAN members. Because ASEAN has a much simpler organization than the EU, you will notice that my explanation of this aspect will be much shorter than what Ambassador Gramegna presented earlier.

The only standing bureaucratic institution is the ASEAN Secretariat. The Secretariat is headed by the Secretary-General, who is appointed by the ASEAN heads of government with the recommendation of the ASEAN foreign ministers. The role of the Secretariat is merely to initiate, advise, coordinate and implement ASEAN activities. It has a total strength of fewer than 100 professional and support staff. So what is important and very different from the EU is that none of the ASEAN members loses any of its sovereign rights in becoming a member of ASEAN.

There are three major meetings of the ministers and two major meetings of the officials. The ASEAN Heads of Government Meeting is obviously the most important institution. It is the highest authority in ASEAN; the meeting takes place once every three years to give policy direction to the Association. To deal with the increasingly complex challenges facing ASEAN, an Informal Summit was initiated in November 1996. This informal summit is to be held in between formal summits to provide more opportunities for the leaders to meet and to provide timely guidance to the Association. Prior to the Summit, there is the Joint Ministerial Meeting (JMM), which comprises the ASEAN foreign ministers and the ASEAN economic ministers. The purpose of the JMM is to facilitate cross-sectoral coordination of and consultation on ASEAN activities.

The ASEAN foreign and economic ministers also have their separate meetings. The ASEAN Ministerial Meeting (AMM) performs the key function of making policies and overseeing their implementation. These meetings of the foreign ministers, normally held in July, are convened annually in each of the seven ASEAN countries on a rotational basis in alphabetical order. The other important ministerial meeting, the AEM, is the ASEAN Economic Ministerial Meeting, which occurs annually, normally in September, to direct ASEAN economic cooperation. This is complimented by the AEM Retreat, which is also attended by the same ministers but in an informal setting.

The senior officials of the Foreign and Economic ministries also meet separately to discuss issues and report to the ministers. These are the Senior Officials Meeting (SOM) and the Senior Economic Officials Meeting (SEOM).

On top of these internal meetings, ASEAN also conducts meetings with the major powers of the world, which are referred to as dialogue partners. The EU and Japan are both dialogue partners of ASEAN. Other dialogue partners are the United States, Canada, Russia, India, China, South Korea, Australia and New Zealand. The dialogue partners are invited to meet with ASEAN in the Post Ministerial Conference (PMM). It is held immediately after the ASEAN Ministerial Meeting. There are two sessions, one involving all of ASEAN's dialogue partners (ASEAN 7 plus 10 dialogue partners) and the other ASEAN 7 plus individual dialogue partners. Such meetings are ASEAN's way of contributing to intraregional understanding.

There were many who thought that ASEAN, being a creature of the Cold War, would disappear with it. They overlooked the fact that the ASEAN magic had brought with it a true sense of community among the ASEAN member countries. ASEAN members felt very comfortable working with each other through continual political cooperation. The common aspiration to achieve political stability in the region progressively expanded towards the desire to bring prosperity to the community. In other words, where economic consideration was the initial driving force behind Europe's political integration, it was political necessity that initially bound ASEAN together and led it towards closer economic cooperation. The landmark decision to create AFTA, the ASEAN Free Trade Area, in 1992 was evidence that a clear sense of common destiny had been forged and that ASEAN had matured from political necessity to economic prosperity. With AFTA, by the year 2003 tariff levels on manufactured goods will drop to 0-5 per cent. The ASEAN leaders have also agreed, in principle, to extend AFTA to trade in agriculture and services. Unlike the EU, which has strict guidelines and directives to achieve a single market, AFTA is a developing concept arrived at by consensus. The tariff reduction process is carried out through the Common Effective Preferential Tariff (CEPT), which is reviewed regularly by the AFTA Council. All ASEAN member countries have to participate in the CEPT scheme. Compared to the EU, the diverse stages of economic development within ASEAN meant that ASEAN had to find a creative way to achieve economic integration.

ASEAN's aspiration goes beyond the South-East Asian region. It wants to fulfil the dream of building a larger Pacific community. This dream seemed unachievable during the Cold War. However, the vision of a Pacific community is being gradually transformed into reality by the APEC process, of which ASEAN is the core. The APEC leaders committed themselves at the Bogor meeting in 1994 to achieve free and open trade and investment by 2010 for industrialized economies and 2020 for developing economies.

Besides APEC, ASEAN added another much-needed element to the building of the Pacific community. In 1994, ASEAN took the initiative to create the ASEAN Regional Forum (ARF). The ARF is the only forum in the Asia Pacific which discusses political and security issues. ASEAN succeeded in initiating the ARF while others had failed because the participants felt comfortable with ASEAN in the driver's seat.

Although the ARF is a forum on regional security, it also comprises the major powers in the world. Besides the United States, China and Russia, France and Britain are also participants in the Forum through their EU membership. Countries which can contribute to the stability of the region, such as Japan, South Korea, Canada, India, Australia, and New Zealand, also take part in the Forum. It provides the sole opportunity for high-level multilateral dialogue on political and security affairs in the Asia Pacific region. Inspired by the ASEAN experience, the Forum has a three-stage evolutionary approach to achieve stability in the region. Stage one involves the promotion of confidence-building measures. Stage two will be the development of preventive-diplomacy measures. The final stage will be the development of conflict-resolving measures. The basic idea is to progress gradually while enhancing the comfort level of the participating countries along the way. By doing so, the ARF will complement the APEC process and serve as the second wing in the building of the Asia Pacific community.

The prosperity and stability of the Asia Pacific region is but only part of the larger picture emerging after the end of the Cold War. The world economy is being powered by three major locomotives, North America, Western Europe and East Asia. Trans-Atlantic ties have had a long tradition and have been growing ever stronger since the end of the last war. The trans-Pacific networks have also been institutionalized by the APEC process. The only weak connection within the big triangle is the Asia-Europe linkage. This led to the formation pioneered by ASEAN in March 1996 of the Asia-Europe Summit, which was intended to complete the missing third leg. The Summit succeeded beyond expectations. It has given rise to a number of specific projects which are in various stages of implementation. One such project is the establishment of the Asia-Europe Foundation, which was launched in February 1997 in Singapore to facilitate greater exchanges of people and ideas between Asia and Europe. Other projects covering a wide range of issues are the founding of the Asia-Europe Environmental Centre, Cooperation on the Development of the Mekong Basin, the ASEM Business Forum and Business Conference, a Customs Cooperation Programme, an Investment Working Group, etc. In view of the scope of the interests, Singapore proposed the Asia-Europe Cooperation Framework to coordinate all ASEM activities. The second ASEM Summit will be held in London in 1998. Interestingly, as an intraregional forum, ASEM has adopted the ASEAN way of consultation and consensus as its modus operandi.

I have briefly described the growth and development of ASEAN and suggested its future direction. I propose to summarize my discussion in the following three points:

Firstly, ASEAN's success owes much to the political will and vision of its leaders. Realizing that they had to meet the regional challenges in the crucial years of the 1960s, they decided to work together despite their differences. More importantly, their cooperation was not merely an immediate response to short-term challenges, it was also motivated by a vision of a united and strong South-East Asia.

Secondly, as a regional organization, ASEAN is nimble in response to the changing international and regional political reality but not blind to its long-term aim. Reconciliation with Viet Nam took place almost immediately after almost 15 years of confrontation. ASEAN's active participation in APEC, its initiation of the ARF and ASEM are examples of its timely response to globalization and intraregional cooperation.

And thirdly, the golden rule of mutual respect in the conduct of international affairs has been strictly observed by members of ASEAN. Territorial disputes continue to exist among ASEAN members but they never dominate ASEAN's agenda. Realizing the inherent diversity among the members, every member state has learned to respect each other's political system and domestic affairs and appreciate the fact that no single state has the right to impose its will on fellow members.

I hope the above summary has thrown some light on an understanding of ASEAN and its culture.

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