I read with interest a commentary post yesterday (although the post itself was made on 7 February) by Reid Kirchenbauer (on the www.investasian.com website) that outlines some of the economic developments that had occurred in the forty years since The Association of Southeast Nations (ASEAN) and Australia had developed diplomatic relations – ‘Understanding Australia-ASEAN Trade’.
Some of the more notable aspects of Reid’s post include:
- Southeast Asia (SEA) is currently Australia’s second largest trading partner after China
- Bilateral trade between SEA and Australia was valued at US$67.9 billion in 2013
And yet, somewhat troubling, notwithstanding the multi-billion dollar level of trade between ASEAN and Australia, and even though a free trade agreement (FTA) exists between ASEAN-Australia-New Zealand (the AANZFTA signed in 2010), a 2013 survey by the Australian Trade Commission (ATC) found that the majority of companies in Australia were not aware of the ASEAN Economic Community.
I say “somewhat troubling”, but the reality is that the ATC 2013 survey mirrors a recent Acitas survey, whose major findings were that:
- 45 per cent of multinationals require legal advice in South East Asia;
- 34 per cent of Australian multinationals’ legal spend now goes outside their home jurisdiction; and
- 60 per cent of Australian in-house counsel surveyed said they needed legal advice in South East Asia
but that these needs were largely going unmet – “Law firms are failing to support clients in South East Asia” an article by Felicity Nelson posted to the Lawyers Weekly website on the 19 December 2014.
If we leave aside for the moment the comprehensive recent report by The Lawyer Magazine on Southeast Asia Legal Elite (the Executive Summary of which can be read here), it seems indisputable to me that ASEAN represents a massive opportunity for Australian law firms in 2015 and that, sadly, a large part of this opportunity is going to be unmet.
Turning back to Reid’s post though, what realistic opportunities exist for Australian law firms in all this?
- no doubt assisted by the Thailand-Australia FTA (TAFTA), coming into effect in 2010, Thai foreign direct investment (FDI) into Australia has increased by over 20 times since 2007;
- with the Australia-Malaysia FTA (MAFTA) coming into effect in 2013, Australia is ranked the third biggest investment destination for Malaysian investors and two-way investment between the nations has doubled since 2010 and now accounts for more than $20 billion; and
- in addition to being the oldest FTA between an ASEAN nation and Australia (signed in 2003), according to the most recently published data Singapore is currently the largest foreign investor in Australian real estate, making up 28% of all foreign property investments in Australia.
and that’s just inbound work from ASEAN into Australia, let alone any of outbound work the 60 per cent of surveyed Australian in-house counsel said they needed help with in SEA.
All of which leads me to ask:
- is your law firm plugged into a formal or informal network in ASEAN?
- if so, do you know what level of inbound referral work you are getting from your ASEAN network partners?
- and, do you know what level of outbound referral work you are sending out to the partners in your ASEAN network?