Abstract
Until 1997, the only preferential trading arrangement, which existed in East Asia, was the ASEAN Free Trade Area (AFTA). Former Prime Minister of Malaysia Tun Dr. Mahathir had realized earlier the deficiency of AFTA in terms of stimulating economic development. In 1990, he proposed to ASEAN members to form the East Asian Economic Group. Due to regional political factors, his proposal was turned down and replaced with the East Asian Economic Caucus in 1992. In 1997, again, he proposed that ASEAN needed to establish large economic cooperation with other countries in East Asia. His suggestion had been warmly responded by the members of East Asian countries. At the ASEAN summit in Manila 1999, ASEAN Plus 3 (APT) was created. ASEAN, China, Japan, and South Korea had agreed and reached a joint statement to form a free-trade area by the year 2020. The establishment of APT was timely since most countries in the world are moving toward establishing wider or larger economic blocs due to the failure of multilateralism of the WTO in creating a new trade agreement. However, there is a shortcoming in the process of building APT, in the minimal and uncertain role of Japan in integrating economies in East Asia. This behavior has disappointed members of the group. The intention of this paper is to discuss the behavior of Japan in the economic integration process in East Asia.
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Notes
ASEAN was established in 1967. Members of ASEAN are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam, and Timor Leste may join in the near future.
Also includes an economic forum or discussion on economic relations in the region.
Agreement on Uruguay Round negotiation was reached in December 1993 and signed in April 1994 at Marrakesh.
The basic concept of EAEG is an “Asia for Asians only”. This was the main factor why USA strongly opposed it.
USA opposed the formation of EAEG on two grounds. First, they were afraid that the EAEG-1990 would turn into a trade bloc. Secondly, USA did not wish for the group to be led by Japan.
Some of the ASEAN members (Singapore particularly) also declined to accept the idea since it was not consulted at the ministerial level. Also, they said that Mahathir’s proposal was too early to be considered and approved.
EAEC was suggested by Indonesia in 1991 at the ASEAN finance minister summit. The scope of EAEC is more narrow and limited than EAEG.
Japan and Australia are mainly involved in the establishment of APEC in 1989.
APEC members came out with “Bogor Goals” to establish free trade and investment within the region by 2020. Based on current development on regionalism in East Asia, it seems that the Bogor Goal will evaporate.
Prior to the development of ASEAN Plus 3, APEC was the main table for discussing liberalization of trade and investment. However, APEC is not looking primarily at East Asian economic integration with interest per se in the countries of the region. Moreover, the forum is dominated by USA and other strong economies, particularly Japan and Australia. The establishment of APT indirectly has “killed the mood” of East Asian countries in realizing a free-trade area under the APEC umbrella. Since 1998, East Asian countries are more concerned with the realization of the ASEAN Plus 3 than APEC.
South Korea has also shown great interest in developing economic cooperation in the region. In 1998, South Korean delegates suggested the establishment of an East Asia Vision Group (EAVG) and later an East Asia Study Group in 2000. Their suggestion was fully agreed upon by the members of the APT. The main task of the two suggested groups is to look at the opportunities and implications of the establishment of APT to its members.
ASEAN’s vision is to unite the member-states into “one ASEAN Community”. The success of ASEAN moving towards ASEAN Community is an acid test for the development of the East Asia Community.
In contrast to EAEG, until now, USA has not shown any strong objection to the APT and the involvement of Japan in the regional group.
At the APT meeting in Brunei, 2001, Dr. Mahathir responded that the idea of EAC was too early (see Terada 2003).
At the APT meeting in Brunei, 2001, Dr. Mahathir responded that the idea of EAC was too early (Terada 2003).
Japan proposed an Economic Partnership Agreement (EPA) including FTA with ASEAN in November 2002, only one day after China and ASEAN signed an FTA agreement, see Shujiro Urata (2006).
The main reason why Japan proposed FTA with Mexico in 1997 are NAFTA and the EU-Mexico FTA, see Chia Siow Yue (2003).
In the Japan–Philippines FTA proposal, waste exports to the Philippines have also been shelved.
South Korea has shown great interest in developing economic cooperation in the region. In 1998, South Korean delegates suggested the establishment of an EAVG and later an East Asia Study Group in 2000. Their suggestion was fully agreed upon by the members of the APT. The main task of the two suggested groups is to look at the opportunities and implications of the establishment of ASEAN Plus 3 to its members.
In November 2005 at the APEC meeting, President George Bush Jr. suggested an Asia Pacific free-trade area, which covered half of the world’s economy. Japan’s government seems to support the idea. Such regional trade proposals however try to cut or remove Asia’s noodle of FTA deals. In other words, the move shows that there is a conspiracy between Japan and US to dilute the realization of the ASEAN Plus 3. If the ASEAN Plus 3 fails, Japan would probably gain, and USA would seem to manage to curtail China’s dominance in East Asia’s economic integration and political influences.
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Aslam, M. Japan’s reluctance in East Asian economic integration. Asia Eur J 7, 281–294 (2009). https://doi.org/10.1007/s10308-009-0230-6
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DOI: https://doi.org/10.1007/s10308-009-0230-6