AEJ (2008) 5:447–454 DOI 10.1007/s10308-007-0134-2 E S S AY

The emerging region of East Asia Rodolfo C. Severino

Published online: 3 October 2007 # Springer-Verlag 2007

It is now increasingly recognised that the growing regionalisation of East Asia is a phenomenon of our times. It was arguably the defining development of the late 20th century and continues to be so well into the 21st, if not beyond. This paper is the personal reflections of the author. It seeks to discern the shape and trace the evolution of this phenomenon, where appropriate, against the background of European regionalisation, which has been universally regarded as the vanguard, model and reference point for contemporary regionalism and regional integration. East Asia here means the ten nations of Southeast Asia, which are organised in the Association of Southeast Asian Nations (ASEAN) and the three leading nations of Northeast Asia, namely, China, Japan and Korea. These are the nations involved in the process known as ASEAN+3. This paper will also touch upon the new, larger group making up the East Asia Summit (EAS), which brings together, at the summit level to begin with, the ASEAN countries, Australia, China, India, Japan, Korea and New Zealand. It will be seen that the regionalisation of East Asia proper, that is, ASEAN+3, has been quite unlike the process leading to the European Union (EU), although the imperatives driving the two regions to coalesce politically and integrate economically are, in the most general and broadest terms, similar.

East Asian regionalisation Essentially, two forces have been driving East Asian regionalisation. The first is the market. The appreciation of the Japanese Yen following the Plaza Accord of 1985 led Japanese firms to relocate their production processes to Southeast Asia, a trend already underway in South Korea and Taiwan. Korean and Taiwanese firms followed suit, albeit on a smaller scale. As the opening of China’s economy began to take hold, Japanese, Korean, Taiwanese and Hong Kong, as well as European and

R. C. Severino (*) Institute of Southeast Asian Studies, 30 Heng Mui Keng Terrace, 119614, Singapore e-mail: [email protected]

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American, investments rushed to that country, particularly to its eastern coast. They were drawn to it by a seemingly inexhaustible supply of inexpensive and diligent labour and by an enormous domestic consumer base with rapidly rising purchasing power. According to figures that the Asian Development Bank (ADB) computed from International Monetary Fund data, intra-regional trade in East Asia, including Hong Kong and Taiwan, has been at a level of 52 to 55% since 1995. This is well above the level of trade among Canada, Mexico and the United States (US) and close to that of the pre-expansion EU. More recent data show that the figure is closer to 57–58% today. The Japanese Government trade statistics indicate that China is almost at par with the US as Japan’s leading trading partner. It is significant that East Asia as a whole, including Taiwan, Hong Kong and ASEAN, as well as China and South Korea, is by far Japan’s top trading partner, accounting for more than 43% of Japan’s trade (Table 1). Japan and South Korea, according to ADB figures, were in 2005 China’s biggest trading partners after the US (excluding Hong Kong) (Table 2). For South Korea, China and Japan were top trading partners, followed by the US (Table 3). As for ASEAN, on the basis of the association’s statistics, intra-ASEAN trade had the largest share of the region’s total trade in 2005, with almost 25%, followed by the US, Japan, the EU, China, and South Korea (Table 4). East Asia’s growing integration obviously makes eminent business sense. Exploiting geographic contiguity, Japanese capital, technology, and links to international markets combine with China’s labour, land and domestic market to improve efficiency and productivity and lower costs—an economic synergy that benefits both sides. The same thing is true of the investments of South Korea, Hong Kong and Taiwan in China. It is true, on a smaller scale, of Japanese, Korean, Taiwanese, and, increasingly, Chinese investments in Southeast Asia (Table 3). The other force driving East Asian regionalisation is, paradoxically, the antagonisms, tensions, mutual suspicions and rivalries between Japan and China and, to a lesser extent, between Japan and Korea. These are both rooted and reflected in conflicting interpretations of history, in strategic rivalries and in cultural animosities. They are exacerbated by specific contemporary issues. The acquisition by North Korea of some nuclear-weapons capability has highlighted the differences in outlook on North Korea between China and South Korea on the one hand and Japan and the US on the other. The Taiwan issue is complicated by the strategic interest of the US and Japan in it and by their declared opposition to China’s use of force in preventing moves toward Taiwan’s independence. In the case of the US, Washington is committed by US law to the defense and military support of Taiwan. There is Beijing’s concern over the US’ alliances with Japan and South Korea and its policy on Taiwan, all of which it views as tools for China’s encirclement and Table 1 Japan’s leading trade partners, Jan.–Oct. 2006, percent share

Source: Japan External Trade Organization

Country/region USA China ASEAN EU-25 East Asia

Exports

Imports

Average

22.6 14.2 11.9 14.4 45.7

11.9 20.2 13.8 10.3 41.1

17.3 17.2 12.9 12.4 43.4

The emerging region of East Asia Table 2 China’s leading trade partners, 2005, in US$ million

Source: Asian Development Bank

449 Partner

Exports

Imports

Total

USA Japan Hong Kong S. Korea Germany Malaysia Netherlands

163,348 84,097 124,505 35,117 32,537 – 25,876

48,995 100,468 12,232 76,874 30,668 20,108 –

212,343 184,565 136,737 111,991 63,205 – –

containment by the US and its allies. Then there are the territorial disputes—between China and Japan over what the Chinese call Diaoyutai and the Japanese refer to as the Senkakus and between South Korea and Japan over Dokdo/Takeshima. One might expect that strategic and nationalistic considerations of such magnitudes would insurmountably prevent East Asia from ever politically coalescing or economically integrating. However, it is precisely these tensions and antagonisms that impel East Asia to create a framework for regional co-peration, albeit a limited one—for two good reasons. First is the recognised need to keep the disputes, tensions and rivalries within manageable confines and provide a venue for discussing and managing them. The second is the desire to prevent East Asia’s growing economic integration from breaking down (Table 4). The primal forces that are impelling East Asian regionalism are, in fundamental terms, no different from those that have driven the integration of Western Europe. In both cases, these were, first, the determination to avoid future wars and, second, the political and economic benefits to be derived from an integrating regional economy. However, the two processes have obviously been quite different. The basic difference is this: Market compulsions, together with the implicit concern over the potential for conflict, are almost unconsciously drawing East Asia closer together, whereas the EU has been and is being deliberately built on formal treaties, regional institutions and region-wide law. East Asian regionalism did not start out with a clearly articulated vision or the establishment of regional institutions or the conclusion of treaties. Europe did. The French foreign minister, Robert Schuman, launched the vision of a united Europe in May 1950 by proposing the establishment of a concrete institution, the European Coal and Steel Community (ECSC). The idea was to pool France and Germany’s production of coal and steel, the essential materials for war, so that, in Schuman’s words, “any war between France and Germany becomes not merely unthinkable, but materially impossible.” Coal and steel production would be placed

Table 3 ROK’s leading trade partners, 2005, in US$ million

Source: Asian Development Bank

Partner

Exports

Imports

Total

China Japan USA Saudi Arabia Hong Kong Germany

69,885 22,181 41,384 – 12,066 9,781

38,629 51,346 30,437 14,819 – 9,615

108,514 73,527 71,821 – – 19,396

450 Table 4 ASEAN’s top 10 trade partners, 2005

Source: ASEAN Trade Database, ASEAN Secretariat

R. C. Severino Partner

Value in US$ million

ASEAN USA Japan EU-25 China S. Korea Australia India Taiwan Hong Kong

304,893.2 153,918.2 153,834.3 140,533.6 113,393.6 47,971.9 31,238.7 23,000.6 19,800.6 19,458.9

Percent share 24.9 12.6 12.6 11.5 9.3 3.9 2.6 1.9 1.6 1.6

under a High Authority, within the framework of an organisation open to the participation of the other countries of Europe.” This “should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe.” The ECSC was followed in 1957 by the European Atomic Energy Community and the Treaty of Rome, which established the European Economic Community— the common market. The Common Agricultural Policy was adopted in 1962. The Single European Act followed 24 years later, in 1986, and in 1992 the Maastricht Treaty, which adopted the Euro and provided for a common foreign and defense policy. The Treaty of Amsterdam of 1997 made several reforms of Europe’s institutions. In anticipation of the EU’s substantial enlargement, the 2000 Treaty of Nice provided for changes in its voting rules. And then there was the Treaty on the European Constitution in 2004. Thus, the EU has developed through a series of treaties and the adoption of institutions over the years, as envisioned, generally, at the beginning. The closest thing to a vision for East Asia, although quite limited and without the kind of specifics embodied in the Schuman proposal, was articulated by Malaysia’s then-Prime Minister, Mahathir Mohamad, in December 1990, when he said: Malaysia...is of the view that for the world to achieve a balanced economic development, the countries of the Asia Pacific region should strengthen further their economic and market ties so that eventually an economic bloc would be formed to countervail the other economic blocs. Mahathir was referring to the prospective deepening and enlargement of the European Communities and the conclusion of the North American Free Trade Agreement (NAFTA). He proposed the East Asia Economic Group (EAEG), ostensibly as an “economic bloc.” Ten months later, he further explained: If ASEAN is to have a bigger say in trade negotiation internationally, then it must work together with the East Asian countries. The East Asia Economic Group or EAEG will be sufficiently strong to gain the respect of both the EC and the NAFTA. Even presently the countries of South East and East Asia together form a formidable market. But the potential for growth of the EAEG is far greater than that of the EC and NAFTA. This fact will also increase the clout of the EAEG...

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It would be very difficult for the trading blocs of Europe and America to ignore the common stand of the EAEG. Since the EAEG stands for free trade, its strong influence in the GATT rounds is likely to yield positive results... However, Mahathir’s vision did not gain immediate traction. It was viewed as confrontational in tone and exclusivist by implication. It lacked consultation, especially with Malaysia’s ASEAN partners. It was met with skepticism by some of those partners. It took no less than 7 years to bear some fruit. When it did, it took the form of a summit meeting, in Malaysia in December 1997, among the heads of government of the Southeast Asian countries and those of China, Japan and Korea. The meeting had no agenda or statement of purpose. Indeed, it issued no statement at all. It established no institutions and concluded no formal agreements. It was, and has been, simply called ASEAN+3. It was only in 1999, at their third summit in Manila, that the 13 leaders set the direction of the ASEAN+3 process and laid down its purposes, the most basic of which were: – –

“Lasting peace and stability in East Asia” through “continuing dialogue, co-ordination, and co-operation to increase mutual understanding and trust” and Improvements in the “quality of life” of the people of the region through economic, financial and development cooperation and cultural and information exchanges.

In 1998, ASEAN+3 commissioned an East Asia Vision Group (EAVG) of “eminent intellectuals” to “study concrete ways to nurture East Asia into a single community of co-operation.” In its 2001 report, the EAVG proposed no less than 57 recommendations. An East Asia Study Group (EASG) of officials narrowed these down to 17 short-term and nine medium- and long-term measures as a matter of priority. A number of these measures have been carried out. However, none of the proposals in the 1999 Joint Statement, the EAVG report or the EASG report has been followed through in terms of binding treaties or other formal measures. Nevertheless, pursuant to the leaders’ mandate, official networks and processes have continued to evolve and expand. There are now 16 areas of co-operation, with four others recently proposed. Co-operation is managed by 48 mechanisms. Each area, each sector, each mechanism is at a different stage of progress, in a different state of closeness, with a different degree of activity, but overall the momentum of cooperation, albeit not based on formal, binding arrangements, seems to be gathering pace. The growing networks of contacts, relationships and co-operation in the ASEAN +3 framework have already yielded some not inconsiderable benefits. First, the ASEAN+3 forum and process has provided a region-wide framework for the pursuit of relations between ASEAN and, individually, China, Japan and Korea in what are known as ASEAN+1 relationships. These are themselves mechanisms for strengthening relations within East Asia. Secondly, ASEAN+3 has enabled East Asia to emerge as a regional entity with the promise of becoming an important actor, as a region, on the global stage. It is worth noting that for 10 years ASEAN+3 constituted the Asian side of the Asia–Europe Meeting. Thirdly, China, Japan and Korea, through ASEAN+3 and individually, are an important source of support for ASEAN

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integration and community building. Fourthly, the three Northeast Asian countries, along with 11 other non-ASEAN states, including France, have acceded to the Treaty of Amity and Cooperation in Southeast Asia, thereby adopting ASEAN’s norms for inter-state relations. These include the non-use of force or the threat of force, the peaceful settlement of disputes, and non-interference in the internal affairs of nations. Fifthly, ASEAN+3 has articulated East Asian positions on vital regional and international issues, including international terrorism, the Korean nuclear problem, the Middle East situation, a possible avian influenza pandemic, energy security, the international trading system, the global financial architecture, and United Nations reform. Finally, the ASEAN+3 gatherings, particularly at the summit, offer an additional opportunity for the three Northeast Asian nations to discuss and sort out their delicate relationships among themselves. Having reached this stage, however, East Asia’s informal, apparently play-by-ear regionalism must now, at least partially, give way to some forms of common regulation, to more formal regional arrangements, to at least rudimentary institutional support. This will take time. It will evolve organically, perhaps erratically, rather than be progressively defined by clear steps definitively embodied in treaties and regional rule making.

Results achieved and challenges ahead: can East Asia learn from the EU? Toward the end of 2003, the ASEAN+3 leaders decided to set up a small ASEAN+3 unit in the ASEAN Secretariat to help “co-ordinate and monitor ASEAN+3 cooperation.” However, there is nothing in East Asia that even remotely resembles the European Commission (EC). This discussion leads us to the examination of two questions. The first has to do with the role of ASEAN. The other is the question: Can East Asia learn from the EU and, if so, what? It is not without reason that the East Asia process is called ASEAN+3. This is to emphasise the reality that the process is, and has to be, led and managed by ASEAN. ASEAN has assumed this role partly by its astute diplomacy and partly by default. That role cannot be carried out by Japan or China. Leadership by one would be opposed by the other. The relationship between them remains far from that achieved by the Franco–German entente after World War II, which made European regionalism possible. Indeed, the rivalry between them has prevented such an entente from developing. Moreover, the rest of East Asia still harbor memories of Japanese imperialism and atrocities in World War II, while retaining a visceral wariness of Beijing that goes back to China’s turbulent communist past and is sustained by its overwhelming present. Instead, Japan’s and Korea’s economic might and China’s spectacular all-around surge have combined with ASEAN’s benign and skillful regionalism to bring the promise of an East Asian regional entity into the realm of the possible. For ASEAN to pull off its assumed and assigned role as leader and manager of the ASEAN+3 process, it needs to be more politically cohesive and economically integrated than it is today. In other words, it is ASEAN as a group that must drive the process. Indonesia or Singapore or Thailand or Malaysia cannot do it by itself. But, first, ASEAN must be a cohesive and integrated entity in order to be an effective regional leader.

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As noted in the book Southeast Asia in Search of an ASEAN Community, ASEAN has achieved a certain degree of political solidarity. As an association, it stiffened the international resistance to Vietnam’s incursion into and occupation of Cambodia in the 1980s and played a critical role in the political settlement of that problem. ASEAN took a united stand in dealing with the problem of asylum-seekers that arose from the Indochina and Cambodian conflicts. It has established norms for inter-state relations through the Treaty of Amity and Cooperation in Southeast Asia. The Southeast Asia Nuclear Weapons-Free Zone treaty is ASEAN’s contribution to the global non-proliferation regime. The Dialogue system, the Post-Ministerial Conferences, and the ASEAN Regional Forum, as well as ASEAN+3 and the EAS, are creative mechanisms that ASEAN has devised to engage the major powers constructively in Southeast and East Asia. However, there is much room for ASEAN to intensify political and security co-operation and to strengthen its standing as a regional group. It has to take more forthright positions on international and regional developments as they occur. It has to demonstrate a larger capacity to deal cooperatively with such regional problems as trans-national crime, infectious diseases, natural disasters, and environmental pollution. As also recounted in the book, ASEAN has laid the foundations for economic integration. Through the ASEAN Free Trade Area, tariffs on most intra-ASEAN trade have been abolished or reduced to minimal levels. The ASEAN Industrial Co-operation scheme, in which components of the same production process by a company operating in two or more ASEAN countries are freely traded, is a flourishing concern. Commitments have been made to remove non-tariff barriers to intra-ASEAN trade, harmonise product standards, streamline and co-ordinate customs procedures, strengthen transportation and communications links, and liberalise intra-ASEAN trade in services. However, ASEAN has to speed up the implementation of these agreements, which has been excruciatingly slow. For this, it must strengthen its institutions and processes or create new ones, including those for the enforcement of and compliance with ASEAN agreements. A task force is now working on an ASEAN Charter that many people hope will help in building and strengthening regional institutions and processes. ASEAN has led the way in convening the EAS, which links, at the top level, Australia, India and New Zealand – and, potentially, other powers – with East Asia, the better to consider together the great strategic and economic questions of our time. On the other hand, the ASEAN+3 process – and to some extent the EAS – has to go beyond such strategic discussions, important as they are, and advance concrete measures of regional cooperation and pursue regional integration in earnest. It needs to focus on a few substantial areas for regional co-operation. It has to take concrete, practical measures to move forward the region’s regionalisation. It will have to strengthen implementation mechanisms and set benchmarks to monitor progress. It has now reached a stage at which it has to keep pedaling forward or topple down and break apart. Here, East Asia can learn much from the EU. Obviously, it is far from the stage that Europe was at even at the time of the 1957 Treaty of Rome. But ASEAN+3 can benefit from the lessons that the European experience offers. Economically, these would include lessons in administering customs, harmonising product standards, regionalising transportation and communications, integrating the market for services,

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coordinating health and environmental standards, and so on. ASEAN+3 can profit from the European experience in building a regional identity. It is, however, most unlikely for East Asia to be anything like the EU in the foreseeable future. The region is simply too diverse. Strategic rivalries are too intractable. The nations of East Asia share no common values of governance, similar political systems, or comparable economic or social structures. They have adopted common norms for inter-state relations, but they have not been able to do the same thing for the relations between the state and its citizens, as Europe has done. It is far from certain whether even the smaller and more compact region of Southeast Asia can do so. In any case, clearly, East Asian regionalisation must move forward despite the region’s diversity, despite the disputes and tensions dividing it. It is precisely to manage those disputes and tensions more effectively that ASEAN + 3 must achieve a certain degree of political understanding and economic integration. It must expand the common political ground that East Asia’s nations share. It must consolidate, solidify, and clarify the terms of its market-driven economic integration so as to make integration of benefit to all. All of this would help make of East Asia a constructive and benign force in world affairs, even as it remains well short of European integration.