E. Asian community won't hurt U.S. interests

Takashi Shiraishi, The Daily Yomiuri, Asia News Network/Tokyo

This December, Malaysia will host an East Asia summit attended by leaders from 16 countries -- the ASEAN+3, comprising the members of the Association Southeast Asian Nations and Japan, China and South Korea -- as well as India, Australia and New Zealand.

Due partly to the upcoming summit, the idea of establishing an East Asian community has recently resurfaced.

In their election manifestos, both the Liberal Democratic Party and the Democratic Party of Japan have called for the creation of an East Asian community.

But there is mounting concern in the United States about the formation of a China-led regional order.

In Japan, questions also are being asked about the compatibility of such a community with the Japan-U.S. alliance.

In view of recent anti-Japanese sentiment in China, scepticism exists over the ability of two countries with different economic and political systems and a history of mutual distrust to act as midwives to such a community.

To avoid any misconceptions, however, it is important to remember that the concept of "community" envisaged in the East Asian community is markedly different from that in the European Union.

The European Union was formed by a group of states that shared the commitment to never again go to war, with each participating country agreeing to surrender part of its sovereignty to the union.

In contrast, moves to form an East Asian community are based on the ongoing de facto integration of the region's economies and on lessons learned from the 1997 Asian financial crisis.

Based on these experiences, the idea of an East Asian community has evolved as a framework of regional cooperation, mainly economic, under the principles of mutual respect for sovereignty as well as amity and cooperation.

What institutional structures are now being created in the name of East Asian community-building?

The first ASEAN+3 summit meeting was held in 1997 amid the financial crisis to address the region's common problems. The summit in 1999 agreed on a Joint Statement on East Asian Cooperation.

The upcoming East Asia summit is an outcome of these meetings.

Accordingly, East Asian cooperation over the past eight years has evolved within the framework of ASEAN+3.

In the currency and financial fields, the ASEAN+3 summit in 2000 reached an agreement known as the Chieng Mai Initiative that formulated a system for fiscal cooperation in the event of a financial crisis. On the basis of the accord, a bundle of bilateral currency swap agreements was created as the major mechanism of crisis management.

In the sphere of trade and investment, economic partnership agreements (EPAs) are being forged through the "ASEAN+1" (for example, ASEAN+China and ASEAN+Japan) arrangement in the name of the East Asian community.

In 2002, Prime Minister Junichiro Koizumi proposed a Japan- ASEAN Comprehensive Economic Partnership initiative that envisioned not just the liberalization of trade in goods and services, but also promotion of trade and investment, protection of intellectual property rights, development of human resources and nurturing small and medium-sized enterprises.

Based on Koizumi's proposals, Japan has already reached broad agreements on EPAs with the Philippines, Thailand and Malaysia, while negotiations for a Japan-South Korea EPA are ongoing.

In addition, talks on concluding EPAs with Indonesia and ASEAN as a whole started earlier this year.

China, for its part, proposed an FTA with ASEAN in 2000, leading to an agreement on the liberalization of trade in goods in 2004. ASEAN also is expected to notch up FTAs with Australia, New Zealand, India and South Korea over the next two years. This means that Asean Free Trade Area will be extended through ASEAN+1 agreements into East Asia and beyond.

Trade volume within the region is rocketing: Imports from East Asian neighbors jumped from 34 percent of total imports in 1980 to 51 percent in 2003, while exports among neighbors expanded to 60 percent from 35 percent during the same period.

At the heart of this astounding growth is the expansion and deepening of across-the-border networks of production and distribution.

Nurturing the industrial hubs of these networks is vital to the economic development of every country in the region. Therefore, it is in the interest of these countries to promote regional economic partnerships.

Institutional structures for regional cooperation can be created from a package of bilateral agreements, as in the case of currency and finance cooperation, or as a result of ASEAN+1, for example in trade and investment cooperation.

The driving force in regional cooperation in East Asia is neither China nor Japan, but ASEAN.

This might not be a bad thing for Japan, simply because cooperation in East Asia cannot work if the prime mover is either or the two countries.

In addition, Japan, ASEAN and South Korea would prefer to deal with a China that is a member of a regional framework and acting in accordance with global and regional rules, instead of unilaterally.

Pragmatism will be needed to ensure compatibility between a future East Asian community and U.S.-led regional security.

But issues such as security and cooperation involving energy, which affect both the stability and prosperity of East Asia, will have to be addressed in cooperation with the United States.

And regardless of ASEAN's position at the center of regional cooperation, the most crucial issue is what kind of institutional mix or combination of different structures will effectively promote regional cooperation.

In this sense, it is hoped that the December summit will address emerging security issues such as terrorism, piracy, weapons-smuggling, and drug- and human-trafficking -- in addition to trade and investment issues -- because these issues are important for the region.

But the summit should show as well that regional cooperation in security matters without American involvement is not necessarily inimical to U.S. interests.

Shiraishi is vice-president of the National Graduate Institute for Policy Studies in Tokyo.