ASEAN Economic Community: what mode

ASEAN Economic Community: what model for labour mobility?
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Flavia Jurje and Sandra Lavenex

Abstract
This paper analyses the labour mobility reforms developed by the Association of Southeast Asian Nations
(ASEAN) in particular for the envisaged 2015 ASEAN Economic Community (AEC). The Community
Blueprint foresees the achievement of a free movement regime for skilled labour, mobility of selected categories
of people associated mainly with trade in services and investment. Labour migration policies for other types of
workers are not part of the regional integration framework. The agenda on services trade mobility,
institutionalized at the multilateral level by the 1995 WTO General Agreement on Trade in Services under the
so-called ‘mode 4’ temporary movement of service providers, has taken shape in other regions of the world as
well. For instance, in North America (NAFTA), Europe (EU), or South America (MERCOSUR), services-
related mobility provisions have coupled with other, more comprehensive, regional policies to migration (e.g.
free movement of people in the EU, residence and work rights for all citizens of MERCOSUR and associated
countries, etc.). Assessing the current context on labour migration within ASEAN and drawing on mobility
models employed by other regional units, the study discusses the prospects for deeper labour market cooperation
in Southeast Asia.

Introduction
The ASEAN Economic Community (AEC) shall be the goal of regional economic integration
by 2015, as stated by the heads of the ASEAN governments back in 2007 at the 13
th

Singapore Summit. To this end, the AEC envisages to transform ASEAN into a region with
“free movement of goods, services, investment, skilled labour
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, and freer flow of capital”
(AEC Blueprint 2008: 5). While setting the goals for the 2015 single market, the AEC
Blueprint underlines the need for “the movement of business persons, skilled labour and
talents”, as a key element for achieving greater economic integration in the region. This paper
assesses the labour market reforms undertaken by ASEAN, drawing on mobility
liberalization experiences developed by other regional integration units, such as the EU, NAFTA, and MERCOSUR. In all these regional integration units, states have committed to
more comprehensive migration policies: in the case of the EU and MERCOSUR, the agenda
on trade-related mobility represents only one component of much more encompassing free
movement regimes, while within NAFTA the mobility provisions exceed the GATS mode 4
template, by for example expanding the categories of people entitled to move, covering more
sectors, introducing a special visa (i.e. Treaty NAFTA - TN-visa, for professionals entering
the US), etc. Comparing these various regimes would shed light on the importance of the
trade-mobility interlink for the development of regional migration policies, but also reveal
potential policy shortcomings of focusing solely on trade-related mobility for managing the
movement of people within a future economic community. The analysis is based on primary
data collected through semi-structured interviews with key stakeholders from the ASEAN
region, EU, NAFTA, and MERCOSUR, as well as coded mobility-related provisions
included in relevant documents and trade agreements concluded by the selected regions. The
coding scheme draws on previous efforts by Jurje and Lavenex (2014).
In the following, the paper presents the regional mobility models devised by ASEAN, EU,
NAFTA, and MERCOSUR respectively. It elaborates on both opportunities and constraints
encountered in liberalizing the movement of natural persons at the regional level. The study
concludes with addressing further policy alternatives for the ongoing labour mobility reforms
initiated by the Southeast Asian states.

Labour mobility within ASEAN
Mobility of service providers within the Southeast Asian region was not part of the original
Declaration, however it has become an important aspect of regional economic integration
with the adoption of the 1995 ASEAN Framework Agreement on Services (AFAS) and then
later with the initiative to conclude an agreement on Movement of Natural Persons (MNP).
Mobility of skilled labor within ASEAN is also promoted through the so-called Mutual
Recognition Arrangements (MRAs) of professional services. Finally, the goal to achieve the
free flow of skilled labour and professionals within the forthcoming 2015 ASEAN Economic
Community has brought along a series of reforms envisaged to enable member states to meet
these liberalization targets. In addition, Aspects related to migrant workers’ rights are covered
in a regional Declaration signed by ASEAN leaders in 2007.
3 The developments related to ASEAN labour mobility framework are detailed below.

ASEAN Framework Agreement on Services
Members agreed that “there shall be a freer flow of capital, skilled labor and professionals
among Member States” (AFAS art.4 (e)). This agenda has evolved relatively at the same time
with the WTO GATS mobility developments. The flow of skilled labour and professionals
related to trade in services is associated with the so-called “mode 4” mobility of natural
persons, one out of the four modes of cross boarder services supply, as defined by the 1995
WTO/GATS agreement.
The objective of the movement of natural persons was sought to expanding trade in services
and deepening economic integration. So far, ASEAN members have negotiated eight
packages of commitments within the AFAS framework, laying down Mode 4 conditions for
market access and national treatment under the horizontal commitments (see details below).
Moreover, the schedules of specific commitments and MFN exemptions lists contain
provisions taken by individual countries in specific sectors, for certain categories of service
providers (e.g. Singapore’s MFN exceptions allow the presence of unskilled/semi-skilled
natural persons that come from traditional sources of supply
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, measures under periodical
domestic policy review; Indonesia reserves low level occupations/semi-skilled jobs to
Indonesians, with limited exceptions for citizens from Malaysia, Singapore, Brunei
Darussalam, Papua New Guinea and Australia). Despite these several rounds of services
negotiations and commitments packages signed, ASEAN members have not moved much
beyond the initial WTO/GATS outcome. In particular, commitments on mode 4 are mainly
linked to investment and business flows, and seen as only facilitating the movement of
professionals, managers, and qualified staff under the intra-corporate transferee category
(Nikomborirak and Supunnavadee 2013, ILO/ADB 2014). Recent developments have sought
to include all mobility-related commitments in a separate binding document – the Agreement
on Movement of Natural Persons – that would supersede all mode 4 provisions codified
previously in AFAS.