Sim Vireak
Protectionism
is re-emerging as a common challenge that all regional and global mechanisms
try to address. That holds true for both the European Union (EU) and the
Association of Southeast Asian Nations (Asean).
Despite
sharing determination to fight against trade barriers and protectionism,
interactions between the EU and some Asean member states (AMS) do not show that
this mission is equally practised.
For instance,
recently, the EU is trying to ban Malaysia’s palm oil, ban Thai fishery
products and considering whether to withdraw a trade preference scheme from
Cambodia. Malaysia’s case relates to the banning of palm oil.
Thailand’s
case relates to the issuance of Yellow Card for Illegal, Unreported and
Unregulated Fishing (IUU). Cambodia’s case relates to the possible withdrawal
of trade preferences under the Everything but Arms (EBA) trade tariff scheme.
While the
first two cases involve the possible banning of specific products, Cambodia’s
case, if the preferences are withdrawn, does not involve the banning of
products or the closure of specific markets but rather the application of
normal tariffs to the Least Developed Countries (LDCs) to which the EU is
supposed to provide preferential treatment.
The EU has
market power that can combine force and strength of the proposed sanctions and
non-tariff measures (NTMs). The actions taken by the EU against AMS provoked
the issues of asymmetrical relations between a united organisation, the EU,
against specific members of another organization, Asean, that is not a union.
Asymmetrical
issues also drew the questions whether the EU, as an organisation, has better
compliance than Asean in terms of human rights, democracy and environmental
values. Although the EU’s actions affect particular AMS’ trade in generic term,
they can also hamper Asean’s institutional image as a region that gives less consideration
to human rights, democracy and the environment. Whether Asean, as an
organisation can accept such labelling or not is another issue for discussion
between these two organisations.
Challenges,
complexities
At the
bilateral level, the unpleasant interactions between the EU and AMS that the
AMS cannot fully foresee are the scope and scale of the impact of the EU’s
legislations and complicated procedures while the EU’s decision is largely
dependent on bureaucrats and politicians in Brussels who may not clearly
understand AMS’s challenges, complexities and values as well as the
sustainability impact of each decision. One Thai analyst said, “Thailand
sacrificed blood, sweat and tears to overcome the stringent criteria outlined
by the EU.”
Apart from the
pure application of their technical procedures, the EU’s decisions can also be
swayed by internal political situations, such as European parliamentary
elections, as well as the EU’s own geopolitical calculations, for instance the
China factor in regard to Cambodia’s EBA.
Once the
procedure is launched, it is hard to stop or reverse. Malaysia had tried to
lobby some EU member states with the belief that some of them may block the
EU’s legislations.
The case of
Thailand offered a successful example by way of conforming to the EU’s demands.
Thailand could make it because the EU’s demands are involved largely with law
enforcement and amelioration of technical management of the issues. Therefore,
responses from Thailand can be visible, measurable and, most importantly,
“do-able”.
Malaysia’s
case is relatively harder than Thailand’s to comply with because the nature of
the product itself is considered by the EU as not environmentally friendly. It
involves much larger schemes than simply elevating the quality of products or
enhancing consideration over the environment. The environmental standard
imposed by the EU is very vague and, as the case has proved, the EU did not
accept the certification standard set by Malaysia in terms of environmental
acknowledgement criteria over the products.
The EU’s
demands with regard to Cambodia’s case are seen as the most difficult to comply
with because the latter considered some of the EU’s requests as going beyond
the red line of respect for sovereign independence and the principle of
non-interference in domestic affairs of state. It is not about the issue of law
enforcement, product quality, labour standards or environment considerations
but about the perception regarding space for civil and political rights, which
is hard to measure because the standard of compliance can vary even within the
members of the EU.
Human rights
Despite the
fact the EU is proving it is adhering to moral standards of human rights in
providing trade preferential treatment, for Cambodia or other LDCs, the
application of standards can equate to the denial of market access itself
regarding the development phase of LDCs. For the post-conflict nations, it is
an unrealistic expectation to demand they fully comply with all human rights
conventions and treaties that they have ratified.
At the
regional level, while the EU has mechanisms to resolve NTMs applied to EU
member states or to utilise NTMs against third countries, Asean as an
organisation does not have such tools and it does not appear that it is heading
in that direction.
The EU side
has many organisational tools in its approaches towards external partners,
ranging from technical NTMs to non-technical NTMs, such as the cases of
Malaysia using environmental justification, or the case of Thailand applying
compliance issues of IUU or the case of Cambodia over the issues of democracy
and human rights or geopolitical balance against China in the EU’s foreign
policy.
As Asean is
applying consensus in the decision-making process, AMS can block any progress
or decision regarding cooperation with a specific dialogue partner. A case in
point: In January 2019 Malaysia and Indonesia had deferred Asean’s decision in
elevating its relations with the EU towards strategic partnership because of
the EU’s discrimination against palm oil.
There are
several lessons learned and applicable tools for member states to interact with
one another when the NTMs are applied. The ideal is that states should not
apply NTMs but, if they face NTMs, they may choose to conform or retaliate or
use both approaches.
NTMs have
caused mistrust and are considered as hindrances to the enhancement of
cooperation, mutual respect and understanding. In a growing inter-dependent
world, NTMs and sanctions rarely yield satisfactory results unless the affected
states are totally isolated, which can never be the case. Moreover, as the
above cases have shown, it may also provoke political, economic and
geopolitical backlashes against states that choose to utilise NTMs.
If states
intend to pursue equal partnerships, they should seek to balance mutual
interests, to understand the specific context of their partners and to seek
agreeable win-win solutions over differences instead of one-sidedly imposing
their own agendas or interests because such actions are proven to be
counterproductive.
