Chapter 4 builds upon the legalization assessment by focusing on the latest (and current) iteration of the AIR: the 2009 ASEAN Comprehensive Investment Agreement (ACIA). What is distinct about the ASEAN investment project – and potentially transformative – is the evolution in objectives surrounding the role of treaty disciplines. By the time of the ACIA, those treaty constraints would no longer be used as part of a simple BIT-style project of delivering investment protection with the hope that this would somehow translate into greater flows of foreign investment. Instead, the ASEAN members now seek to strategically position their region as an integrated production base for foreign investment, thereby leveraging one of the fastest and most dynamic aspects of the global economy. Yet, clearly, the AIR continues to exhibit a low degree of legalization measured against conventional benchmark indicators. Chapter 4 seeks to contextualize and explain this low degree of legalization through both the ASEAN Way and negative social learning. The adaptation and reimagination embedded into the AIR calls into question universalist assumptions underpinning the concept of legalization and highlights the idiographic nature of legalization from a comparative law perspective. We argue instead that delegalization can be an independent and entirely legitimate mode of legalization.

Chapter 5 synthesises our analysis and identifies targeted normative reforms. ASEAN leaders will eventually need to defy political demands for protectionism to establish a stable foundation for economic growth as they harness the development potential within the ASEAN region. The inauguration of the Regional Comprehensive Economic Partnership Agreement (RCEP) provides a golden opportunity for ASEAN members to deepen trade and investment liberalization among themselves to maximize the RCEP’s true potential: the synthesis of extra-ASEAN and intra-ASEAN economic flows. What seems essential in soliciting cooperation from ASEAN members is to gradually expand shared grounds and consolidate the ASEAN identity pronounced in the ASEAN Charter. By embracing a constructivist logic, ASEAN members need a new paradigm of integration based on trust and confidence in their common market project. Touting human agency and soft law, ASEAN leaders can rebalance domestic political economy and collective economic interests, thereby synthesizing global and regional (ASEAN) value chains and linking a single ASEAN market to the global market.

Chapter 2 critiques various state-orientated theories – such as neorealism or neoliberal institutionalism – entrenched in the rationalist tradition. Our guiding premise in this book is to construct ASEAN’s identity qua organization using different insights from constructivism to probe ASEAN’s institutional evolution for the past several decades. Although ASEAN encompasses multiple economic and political dimensions, Chapter 2 focuses on the initial formation of ASEAN’s identity – in the 1987 ASEAN Agreement on the Promotion and Protection of Foreign Investment – as it concerns the intra-regional investment regime. To the extent that this investment regime is an important factor driving economic integration among the ASEAN states, scrutinizing ASEAN’s identity formation in this particular area offers a unique way of understanding ASEAN’s institutional development.

Economic regionalism in ASEAN features a dynamic legal interaction of centripetal force (represented by global economic norms) and its centrifugal counterpart (defined by ASEAN’s unique historical and cultural traits). The main goal of this book is not to present and defend a narrowly articulated thesis that focuses on a single doctrinal or conceptual point or development within ASEAN. This book instead paints a broader canvass of evolution in law-making by uncovering unique patterns of innovation in legal tailoring while identifying also a central paradox – the wide gap in the degree of openness and commitments between intra-ASEAN vis-à-vis extra-ASEAN sources of investment. This final chapter provides a summary and recount of the main observations and arguments in previous chapters from the standpoint of regionalist dynamics in ASEAN investment regulation. It also offers several policy proposals to harness the potential of the AIR and achieve the mega goal of “ASEAN Centrality.”

With the adoption of the ASEAN Charter in 2008, the ASEAN member states articulated their vision of an economic community. This ambitious vision tracks economic reality around ASEAN. The ASEAN region has recently been one of the most popular destinations for FDI across the globe. Despite a temporary decline due to the COVID-19 pandemic in 2020, the region’s share of global FDI rose from 11.9 percent to 13.7 percent that year. Against this auspicious background, this book calls for a new framework through which we can conceptually embrace the ontological autonomy of the ASEAN Investment Regime (AIR), beyond an aggregation of the interests of its individual member states. A sociology-led approach, especially constructivism, emphasizes ideational factors, such as culture and norms, that guide state actions from within. The main goal of the book is to explore the manner in which ASEAN’s history and culture has fundamentally shaped its foreign investment policies, leading to outcomes that often depart from the external structure and script of Global Investment Law.

Chapter 3 discusses the subsequent stage of the evolution of the AIR. The ASEAN member states shift dramatically from the start-point of the 1987 ASEAN Investment Agreement. Chapter 3 shows that this start-point was marked by a remarkable degree of conservativism, with the member states unwilling to extend fundamental liberal and protective guarantees typically found in their BITs with third countries among themselves. By contrast, Chapter 3 traces a fundamental shift by the late 1990s, where a series of internal and external events would push those members to dramatically reshape their approach to investment rules. The combination of the disastrous effects of the 1997–1998 Asian financial crisis and the rise of China as a serious economic competitor would force those states to begin to develop a deeper level of integration. That identity crisis fundamentally shapes both the normative orientation and legal norms within the 1998 ASEAN Framework Agreement. Though limited when measured against conventional legalization indicators, any such critique ignores the vitality and creativity of the key choices made in this time of crisis.