Optimizing Dispute Avoidance and Prevention in ASEAN Economic Agreements

Under the Association of Southeast Asian Nations (ASEAN) Charter, ASEAN Member States (AMSs) agree to resolve all disputes peacefully and to maintain dispute settlement mechanisms in all fields of ASEAN cooperation. In this regard, ASEAN has agreed on the ASEAN Protocol on Enhanced Dispute Settlement Mechanism (ASEAN Protocol on EDSM), adopted on 29 November 2004 and amended in 2019, as a mechanism to settle disputes arising from ASEAN economic agreements.

In practice, however, AMSs have so far preferred to resort their commercial disputes to the World Trade Organization (WTO) dispute settlement, instead of going through their internal mechanism under the Protocol on EDSM.

To date, only three trade-in goods-related disputes between ASEAN Members have been lodged to WTO dispute settlement which realistically do not represent the real number of trade frictions or disagreements among AMSs. This also means, other trade concerns are either solved bilaterally behind the closed-door or remain long standing disputes. This state of affairs is unfortunate as it will undermine ASEAN’s character as a rule-based organization.

Considering the inactivity of ASEAN formal dispute settlement, I argue that AMSs could utilize ‘dispute avoidance’ mechanisms provided under ASEAN instruments to address and solve their trade grievances before escalating into full-fledged disputes. These mechanisms include: (i) transparency; (ii) raising specific trade concerns within the respective ASEAN Sectoral Bodies; and (iii) the use of the ASEAN Solutions for Investments, Services, and Trade (ASSIST) platform.

Optimizing the operationalization of these mechanisms will allow ASEAN to be more transparent and inclusive, providing private sector with access to the competent AMS authorities and an effective interface to report their trade concerns and find trade facilitative solutions.

Dispute avoidance mechanisms do not replace formal dispute settlement but they can cement the pathway in building the confidence and political will of AMSs to rely on their own internal mechanisms to resolve their trade irritants.