Southeast Asian Symphony: The Quest for Regulatory Harmonisation in ASEAN

As I witnessed the 42nd ASEAN Summit unravel in Labuan Bajo, Indonesia, it's evident that there is a mounting urgency for the ASEAN bloc to demonstrate its unity against the winds of global change. Consequently, the need for regulatory harmonisation in the region cannot be overstated. Despite significant progress made through the ASEAN Free Trade Agreement (AFTA) towards economic integration and regulatory convergence, achieving regulatory harmonisation remains a formidable challenge. Nevertheless, my confidence is bolstered by the belief that, with a judicious approach and strategic planning, regulatory harmonisation is an attainable feat with ample rewards.

Regulatory harmonisation can bring numerous benefits to the ASEAN region, including increased trade and investment, economic growth, and competitiveness. Ensuring that businesses operate under common rules and regulations promotes a more seamless trade and investment environment, creating a level playing field for businesses to compete. This is similar to each instrument in an orchestra playing a unique role in creating a harmonious symphony, with each country's regulations playing a unique role in creating a harmonious regulatory environment.

But regulatory harmonisation is not only about facilitating cross-border transactions; it's also about protecting consumers, workers, and the environment. As the ASEAN region continues to face increasingly complex challenges, regulatory harmonisation can be a critical solution for achieving a more fair and prosperous future for all.

One successful case study of regulatory harmonisation is the European Union (EU). The EU has achieved regulatory harmonisation through the adoption of common standards and frameworks across member states. For instance, during the Covid-19 pandemic, the EU issued joint procurement agreements for medical equipment and supplies, ensuring that all member states had access to the same quality products at the same price. The EU also facilitated the rapid authorisation and distribution of vaccines, allowing member states to coordinate their vaccination campaigns. These measures helped to ensure a more effective and coordinated response to the pandemic, saving lives and reducing the economic impact of the crisis.

Mirroring this, the Covid-19 pandemic also highlighted the importance of regulatory harmonisation in ASEAN, particularly in facilitating the movement of essential goods and medical supplies across borders. At the height of the pandemic, we saw ASEAN member states implement temporary measures to facilitate the movement of essential goods, such as medical supplies and food, across borders. Not only that, but we also saw a collective effort from the ASEAN Customs Procedures and Trade Facilitation Working Group encouraging the use of the ASEAN Customs Transit System (ACTS) to facilitate trade in essential goods by allowing the electronic exchange of customs transit declarations, which reduces the time and costs.

What is in the way?

ASEAN has definitely made efforts to achieve regulatory harmonisation in line with its goal of fostering economic integration and cooperation among its member states. However, despite implementing initiatives like the ASEAN Common Technical Dossier (ACTD), Mutual Recognition Arrangements (MRAs), and ASEAN Single Window (ASW), challenges such as different regulatory systems, capacity constraints, and non-tariff barriers have hindered progress towards full regulatory harmonisation. This has resulted in challenges for businesses, particularly small and medium enterprises (SMEs), in accessing regional markets due to compliance difficulties and higher costs, ultimately affecting the region's competitiveness.

Way Forward

Achieving regulatory harmonisation in the ASEAN region is a complex and multifaceted process that requires a clear and systematic approach. It can be likened to the conductor of an orchestra, who must skillfully guide each instrument to perform its distinct part in unison, ultimately resulting in the creation of a melodious symphony.

The first step towards this goal is to establish a shared vision among member states, accompanied by strong political will to prioritise regulatory harmonisation among the region's strategic objectives.

Following the establishment of a shared vision, ASEAN member states must take concrete actions to realise their goals. This includes creating forums for discussions and knowledge sharing among member states, as well as engaging with industry experts, professionals, and the private sector. Through these discussions, member states can identify areas of regulatory divergence and work towards developing common frameworks that facilitate regulatory harmonisation.

Moreover, it is crucial to establish concrete mechanisms and instruments that promote convergence. This can include the establishment of a dedicated regulatory authority, a centralised database of regulatory practices, and a framework for mutual recognition of regulatory frameworks. By creating these structures, ASEAN member states can work towards building a robust and effective system that can withstand the challenges of regional integration.

It is also worth acknowledging that achieving regulatory harmonisation in ASEAN is a complex task that requires a sector-specific approach. Different industries and sectors have unique regulatory frameworks and policies, which pose challenges to broader harmonisation efforts. In some cases, limited resources and funding for certain member states may also hinder progress. This highlights the need for tailored approaches to address these challenges, particularly in areas such as the health and pharmaceutical industries.

The achievement of regulatory harmonisation in the ASEAN region bears a striking resemblance to the intricacies involved in conducting an orchestra, where each instrument plays a unique role, but must work together seamlessly to create a beautiful symphony. The harmonisation of policies and regulations requires a coordinated effort, much like how a conductor guides and coordinates the musicians to produce a harmonious sound. For ASEAN to succeed in this endeavour, its leaders must possess a shared vision and political will to steer the region towards regulatory convergence. The forums for discussion and creation of concrete mechanisms, much like essential instruments in an orchestra, contribute to the creation of a cohesive and unified regulatory framework. Such a framework will, in turn, enable the region to attract foreign investment, foster economic growth, and facilitate trade and investment within ASEAN.

In conclusion, regulatory harmonisation is an indispensable ingredient for the success of ASEAN, and the benefits it offers are far too significant to disregard. Much like conducting an orchestra, where each musical instrument plays a distinct and essential role, ASEAN leaders must establish a shared vision among member states and create concrete mechanisms that promote convergence. It is crucial to acknowledge that achieving regulatory harmonisation is not a one-size-fits-all solution and that a sector-specific approach is necessary to tackle the unique challenges of each industry. However, by guiding and coordinating each instrument to produce harmonious melodies, ASEAN can achieve regulatory harmony, foster economic growth, and facilitate trade and investment within the region. As ASEAN confronts increasingly complex challenges, regulatory harmonisation is not only vital but also indispensable for realising a more prosperous and sustainable future for all.