Consumer Protection Law and Practice in South-East Asia: Implications for Regional FTAs and Australia

The Sydney Southeast Asia Centre, with in-kind support from the global law firm Baker & McKenzie, will fund over 2014 this project involving also my colleague specialising in Chinese law, Prof Bing Ling.
[Background] Regional economic integration is proceeding apace. ASEAN aims to completely eliminate tariffs among 6 original (out of 10) member states by 2015, as part of developing an economic, political (security) and socio-cultural “community”. Yet it has also established an ASEAN Committee on Consumer Protection, to avoid a regulatory “race to the bottom” along with this expansion of free trade. Since late 2012, ASEAN has also begun negotiating a “Regional Comprehensive Economic Partnership” (RCEP) with Australia-NZ, Japan, China, Korea and India – leveraging off existing Free Trade Agreements (FTAs) with each of those states. Consumer protection is likely to arise also in the context of RCEP, and even the Trans-Pacific Partnership FTA (with negotiations already well advanced and involving many of the same states).

The experience from other regional economic integration initiatives, most notably within the European Union (now encompassing 28 very diverse states) but also for example in South America, shows how free trade promotion can often proceed in parallel with “trading up” to higher levels of consumer protection. This is particularly true with a growing middle class, as now in many parts of South-East Asia. Economists and other policy-makers are increasingly aware that various types of regulatory safeguards are needed to maintain and expand consumer confidence in the marketplace, particularly in the wake of the Global Financial Crisis [see].
[Aims] This project therefore seeks to take stock of the major consumer protection mechanisms and issues in Asia, and consider how post-GFC FTAs might help enhance the protection of consumers, while expanding non-discriminatory access to foreign markets. The focus will be on ASEAN member states, with a particular emphasis on developing countries (Indonesia and Vietnam), middle income countries (Thailand and Malaysia) and a high-income country (Singapore), all of which are familiar to the Project Investigators. But to anticipate major consumer protection issues and responses, the project will also compare major regional FTA partners with medium levels of consumer protection (China) and high levels of protection (Japan and Australia), regarding which Ling and Nottage already have (respectively) extensive knowledge. Our analysis hopes also to draw on experiences and expertise from lawyers in Baker & McKenzie offices in each of the above-mentioned ASEAN countries.
The project will pay particular attention to:
(i) consumer contracts (regulation of unfair terms or mandatory warranties);
(ii) e-commerce more generally; and
(iii) consumer product liability and safety regulation.
The project will ascertain similarities and differences among the relevant domestic law and practices in these countries, to determine whether substantive protections or procedural mechanisms (eg joint safety-standard setting committees) could be included in FTAs to allow countries with lower levels of protection to “trade up” to appropriately higher standards.
[Research Plan and Outcomes] The first six months will primarily involve a primary and secondary literature review, mainly for works in English but also checking for works in Japanese and Chinese analysing consumer protection law and practice in ASEAN countries. A draft comparison of consumer product safety and implications for FTAs, including a discussion of food safety issues, will be presented in May 2014 to Baker & McKenzie and clients. A second comparative analysis, e-commerce issues generally, will drafted by mid-September 2014; and the third, of consumer contract regulation, by end-November 2014. Versions of one or more of these analyses will be submitted to print and online media over 2014. A consolidated analysis will be drafted by mid-February 2015 for presentation at a seminar with SSEAC, hopefully with the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS). After feedback, by end-March 2015, the paper will be submitted to a major academic journal (and, if acceptable to that journal, uploaded on as a freely-accessible Sydney Law School Research Paper).

Author: Luke Nottage

Prof Luke Nottage (BCA, LLB, PhD VUW, LLM LLD Kyoto) is founding co-director of the Australian Network for Japanese Law (ANJeL), Associate Director (Japan) of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), and Professor of Comparative and Transnational Business Law at Sydney Law School. He specialises in international dispute resolution, foreign investment law, contract and consumer (product safety) law.