Toward an East Asian economic community<\/p>\n
Ari A. Perdana, Centre for Strategic and International Studies
\n(CSIS), Jakarta , Ari_Perdana@csis.or.id<\/p>\n
Since the mid-1990s, countries have adopted two routes toward
\neconomic globalization. The first is multilateral economic
\nintegration, with the Uruguay Round of the Generalized Agreement
\non Trade and Tariffs (GATT) as the most significant achievement.
\nThe second route is regional cooperation.<\/p>\n
The movement toward a more globalized economy, translated into
\nliberalization of foreign trade and investment, has been the
\ndriving force for several forms of regional economic cooperation.<\/p>\n
One of the most significant reason for going regional is
\nconcerns about the imbalances of the world economy. Many have
\nbecome worried about the possibility of developed countries using
\n\"institutionalized globalization\" to force their agendas onto
\ntheir developing counterparts.<\/p>\n
To reduce the possible negative impact of globalization,
\nstrengthening cooperation with neighboring countries was seen as
\nthe solution. Furthermore, according to the \"building bloc\"
\nargument, integration and openness to regional economies can act
\nas a \"training ground\" for countries before moving further toward
\nglobal integration.<\/p>\n
Among economic regions, East Asia was considered the most
\ndynamic region. Although the recent economic crisis has hampered
\nthe region's economic growth, both as a whole and of each
\nindividual country, East Asia has not lost its potential to be
\nthe leading economic region. This opens wider opportunity for
\nmore intense economic cooperation.<\/p>\n
However, there has been a lack of a comprehensive vision for
\nsuch further economic cooperation. One indication of this was the
\nlack of a coordinated response by governments in response to the
\n1997 economic crisis, which heightened the impact of this crisis.<\/p>\n
Another clear indication is the number of initiatives taken
\nwithout a clear view of where they all will lead. We have the
\nASEAN Free Trade Agreement (AFTA), for instance, grouping the 10
\nmembers of ASEAN, and those of the Asia Pacific Economic
\nCooperation forum (APEC), comprising most East Asian countries
\nplus some other countries from the Pacific Rim.<\/p>\n
And just recently ASEAN signed a Free Trade Agreement with
\nChina, with similar agreements with Japan and Korea awaiting.
\nThere are also bilateral arrangements, such as Singapore-Japan
\nClose Economic Relations; and several sub-regional cooperation
\nschemes like the Singapore-Johor-Riau (Sijori) special economic
\nzone, the Indonesia-Malaysia-Thailand Growth Triangle and the
\nEast ASEAN Growth Area, comprising Indonesia, Malaysia, Brunei
\nand the Philippines.<\/p>\n
East Asian countries should have a blueprint for deeper
\neconomic integration. They should pursue an \"East Asian Economic
\nCommunity\" (different from the \"East Asian Economic Caucus\"
\nproposed by Malaysian Prime Minister Dr. Mahathir in the early
\n1990s). Such a Community was suggested at the ASEAN+3 Summit in
\nBrunei in November 2001. This vision views East Asia as no longer
\na region of nations, but as a \"community with shared challenges,
\ncommon aspirations and a parallel destiny\".<\/p>\n
The next question is what form of economic integration should
\nit take. Currently, the region is only up to an FTA level,
\nmeaning that free trade in the region is still at the earliest
\nstage. Higher phases would be a customs union or common market,
\nand finally a full economic union. In a customs union, member
\ncountries apply a common external tariff to nonmembers, in
\naddition to the removal of tariffs among themselves. Then, in a
\ncommon market, cooperation includes free labor and capital
\nmarkets.<\/p>\n
A common market could be a guideline for the Economic
\nCommunity. In addition, the cooperation could be broadened
\nthrough the harmonization of economic policies, such as taxation,
\ninvestment policy or labor regulation. One reference could be
\nMercosur, the common market set up by several Latin American
\ncountries -- Argentina, Brazil, Paraguay and Uruguay.<\/p>\n
Another reference for deeper economic integration is a
\nEuropean Union (EU)-type monetary integration. However, East
\nAsian countries may still be far from replicating the EU. At
\nleast in the foreseeable future, the East Asian Economic
\nCommunity agenda should be more focused on establishing a common
\nmarket plus harmonizing economic policies.<\/p>\n
On paper, the establishment of this Community is realistic
\nenough. If an East Asian FTA is targeted to be achieved in 15
\nyears from now, probably a common market could be established in
\naround 30 years. But first, the countries should make some effort
\nto close gaps regarding their development.<\/p>\n
This would not be easy, considering that the region consists
\nof highly developed countries like Japan and Singapore, newly
\nindustrialized countries (Malaysia, Thailand, South Korea),
\nrelatively low-medium income countries (China, Indonesia, the
\nPhilippines), and some transitional countries (Cambodia, Laos,
\nVietnam, Myanmar).<\/p>\n
Second, political obstacles between countries should be
\nremoved. For example, the historical hostility between Japan and
\nKorea, disputes between countries of the Association of Southeast
\nAsian Nations and the political implications of the Taiwan issue.<\/p>\n
Another question is how each country would handle domestic
\nproblems arising from this idea. The public should be well
\ninformed about the potential domestic benefits to be gained from
\nregional economic integration. Policy-makers should stress that
\nregionalism can act as insurance when entering globalization.<\/p>\n
This article was based largely on economic sub-group
\ndiscussions at the 2003 Global Youth Exchange. The event was held
\nin Japan from Jan. 20 to Jan. 31, sponsored by Japan's Ministry
\nof Foreign Affairs. The topic was \"Asia-ASEAN and International
\nSociety: A New Regional Cooperation in the 21st Century\". The
\nauthor participated in the event with 35 other participants from
\n25 countries.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/toward-an-east-asian-economic-community-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}