The ASEAN Economic Community and prospects of cross-border practice of law

Amicus Curiae
Maureen Z. Macaraeg

Posted on April 06, 2016

The road to the establishment of the ASEAN Community began in 2003 through the Declaration of ASEAN Concord II in Bali, Indonesia, otherwise known as the Bali Concord II. In 2003, with the increasing interdependence between and among ASEAN countries and as a response to the ASEAN Financial Crisis, the ASEAN members declared the establishment of the ASEAN Community. The creation of the ASEAN Community, however, may as well be considered a stimulus to attract leverage in the global economy.

The Bali Concord II was hailed as a “historic step towards regional integration.” It consists of three pillars -- the ASEAN Political-Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community. Each of these pillars has a corresponding road map or a “Blueprint.” Under the Bali Concord II, the ASEAN Economic Community was declared as “the realization of the end-goal of economic integration as outlined in the ASEAN Vision 2020, to create a stable, prosperous and highly competitive ASEAN economic region in which there is a free flow of goods, services, investment, and a freer flow of capital, equitable economic development and reduced poverty and socio-economic disparities in year 2020.”

ASEAN leaders eventually saw the need to accelerate the establishment of the ASEAN Economic Community to 2015 from the original target year of 2020. This acceleration exemplified one step further towards the realization of the ASEAN Community.

Of the three pillars, the ASEAN Economic Community has achieved major steps towards the attainment of a single market production base and towards the integration of a unified economic block. The foundations have been laid towards this integration as far back as 1992 upon the creation of the ASEAN Free Trade Agreement and the subsequent adoption of the Common Effective Preferential Tariff Scheme, which reduced tariff rates for goods originating within the ASEAN.

Keeping in mind the end-goal of regional economic integration, the realization of the AEC, which was formally launched in Dec. 31, 2015, is pursued under four elements or basic initiatives -- single market production base, competitive economic region, equitable economic development, and integration into the global economy. All of these initiatives are defined in detail in the ASEAN Economic Blueprint, which lays down the basic courses of action to achieve integration.

The single production base is comprised of five core elements -- free flow of goods, free flow of services, free flow of investment, free flow of capital, and free flow of skilled labor. For free flow of services, the goal is to create an economic community with a steady access to service suppliers.

Under the ASEAN Economic Blueprint, by 2015, there should be substantially no restrictions on trade in services for all other service sectors. This is necessary for integration requires not only free flow of capital and goods but also steady supply of services. This mandates the ASEAN member-states to allow maximum mobility of people to engage in different service sectors.

Just last year in Kuala Lumpur, the ASEAN countries adopted the ASEAN Community Vision 2025. This ten-year plan seeks to create an ASEAN Community that is “highly integrated and cohesive; competitive, innovative and dynamic; with enhanced connectivity and sectoral cooperation and socially-responsible; and more resilient, inclusive, and people-oriented, people-centered” that is integrated with the global economy.

With the all the road maps set to fast-track a more cohesive economic region, the impacts on different service sectors are inevitable, and legal services is not spared. The provision of legal services to a more diversified clientele is in the horizon and so is a multi-jurisdictional set of corporations and businessmen entering into ventures that are governed by different sets of laws and with various mechanisms of dispute settlement. This is a conducive climate for a new kind of legal practice.

As foreseen by lawyers who have long been engaged in the practice of law, the impact of economic development in the era of integration is inevitable. Thus, it is necessary to look ahead, respond to the possibility of higher demand for legal services and move towards educating a new breed of lawyers who are well-trained and equipped with knowledge obtained through various levels of exposure across the ASEAN and multinational firms, corporations, and international organizations.

The observations are accurate and many articles have been written about how Filipino lawyers must and should prepare for the coming wave of cross-border legal practice.

Atty. Danilo Concepcion, Dean of the University of the Philippines College of Law, has written about “ASEAN Law and the ASEAN Law Student.”

In his article, he points out the challenges in integrating ASEAN Law into the Philippine legal education. Some steps have been taken to introduce ASEAN law in the curriculum. Currently, some institutions like the Ateneo de Manila School of Law and University of the Philippines School of Law have been offering electives that focus on the ASEAN.

The continuing changes as discussed above reflect how Filipino lawyers and law students alike should respond to this stimulus. However, what remains a more interesting aspect is the possibility of bigger changes in so far as the landscape of the practice of law in the Philippines is concerned. We are ready to admit the need to produce a corps of Filipino lawyers who can seek for recognition and be employed as counsels or practitioners abroad, but are we ready to recognize other foreign practitioners in the Philippines?

It must be noted that under Art. XII of the 1987 Constitution, the second paragraph of Sec. 14 states, “The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases provided for by law.” In the context of the ASEAN integration and in the context of facilitating free flow of services, the 1987 Philippine Constitution allows for the passage of subsequent laws that may allow foreigners to practice a particular profession. However, for the practice of law, Article VIII, Sec. 5 par. 5 remains the pertinent and operational provision as to who can practice law in the Philippines, which reserves to the Supreme Court the power over admission to the practice of law.

Bearing these provisions in mind, the impetus brought by the thrust towards regional economic integration also calls for the need to rethink and revisit the raison d’etre as to why some professions should or should not remain reserved for Filipinos alone. This is indispensable, should full participation and compliance be sought, in light of the formal establishment of the ASEAN Economic Community.

Unless these matters are addressed, the appreciation the full benefits of regional integration will remain incomplete. The free flow of services is a core element in the structure of regional integration. The free flow of legal services necessarily requires a steady supply of practitioners in anticipation of the higher demand for lawyers who engage in cross-border practice of law. Opening ASEAN Member-States’ legal systems might become a necessary derivative of opening up its economic system in the name of regional integration.

The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes only and not offered as and does not constitute legal advice or legal opinion).

Maureen Z. Macaraeg is an Associate of the Litigation and Dispute Resolution Department at the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).