ASEAN: Harmonizing Labor Standards for Global Integration

Abstract

Toward the goal of fully integrating the Association of Southeast Asian Nations (ASEAN) and its member states into the global economy, the ASEAN leaders adopted the ASEAN Economic Blueprint in 2007 to serve as a coherent master plan guiding the establishment of the “ASEAN Economic Community (AEC) 2015.” The AEC is seen as the “realization of the end goal of regional economic integration” by ASEAN’s 10 member economies, comprising Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, encompassing more than 620 million people.

The AEC has a milestone goal of regional economic integration by 2015. The AEC aims to transform ASEAN into a region with “free movement of goods, services, investment, skilled labor and freer flow of capital,” based on four key pillars:

1. a single market and production base;

2. a highly competitive economic region;

3. equitable economic development; and

4. full integration into the global economy.

According to the lead economist at the Asian Development Bank, “. . . the fourth pillar of full integration into the global economy has seen the greatest strides, which has enabled a thriving ‘Factory ASEAN.’ Progress to date underlines how liberalization has been driven more by market forces and unilateral actions than by regional agreements.”

ASEAN is an emerging entity that has the potential to be one of the largest economies and markets in the world. It is reported that “if ASEAN were one economy, it would be seventh largest in the world with a combined gross domestic product (GDP) of $2.4 trillion in 2013. It could be fourth largest by 2050 if growth trends continue. With over 600 million people, ASEAN’s potential market is larger than the European Union or North America, next to China and India. ASEAN is one of the most open economic regions in the world, with total merchandise exports of over $1.2 trillion – nearly 54% of total ASEAN GDP and 7% of global exports.” Its population and labor force participation is found in Table 1, below, which provides a perspective on the relative size of each member state.

Examining the ASEAN goal of becoming a region fully integrated into the global economy, this paper looks at what steps have already been taken by ASEAN and its member states to integrate into the global community through ratification of ILO labor standards, participation in Free Trade Agreements (FTAs), and domestic implementation of international labor standards. In search of a platform for harmonizing the labor policies of ASEAN in coordination with international labor standards, this paper will examine the guiding documents of ASEAN, its commitments to ILO labor standards, and the progress of ASEAN’s expressed goals of achieving higher labor standards within the region. Also discussed are possible models for harmonization and steps to be taken toward that end.

Keywords: ASEAN, labor and employment laws, regionalization

JEL Classification: K