The Wobbly Triangle: Europe, Asia and the US after the Asian Crisis

Abstract

Discussion of the potential conflict among three actors — Japan, Europe, and the US — has been a popular topic among academics, policymakers, and popular commentators.¹ More recently, China has replaced Japan in this role. Less pessimistically, there have also been co-operative efforts among different regions — or what I term transregional arrangements. These include the formation of the APEC forum that ties North America to Asia, ASEM, TABD, FTAA linking North and South America, and EU-Mercosur agreement. Thus, at least in theory, the three poles in the global economy might be able to stabilize and lead the world economy together, particularly if co-operative arrangements develop among major regions. The recent Asian crisis, however, has thrown this three-legged stool into a wobbly crisis, and speculation that Asia is now ‘finished’ because of mismanagement, gross corruption, poor state planning and the like, rule the day. Yet reports of Asia’s demise recall what a healthy Mark Twain cabled in 1897 upon reading his obituary: ‘The reports of my death are greatly exaggerated.’