POLITICAL-ECONOMY OF ASEAN AND APT

POLITICAL-ECONOMY OF ASEAN AND APT Presented by: Dr. Alexander C. Chandra Institute for Global Justice (IGJ) Jakarta, Indonesia Prepared for the Regional Conference on Civil-Society Engagement in ASEAN Bangkok, 3-5 October 2005

Aims for Presentation • An analysis of the political-economy of ASEAN and the ASEAN Plus Three (APT); • An analysis of the relationship between ASEAN and the plus three countries (China, Japan, and South Korea)

Key Question • To what extent the co-operation between ASEAN and the plus three countries will grow? • What are the opportunities and challenges of APT for ASEAN? • What are key concerns of Southeast Asian civil-society groups about APT?

What is APT? • Dialogue process that brings together China, South Korea, Japan, and ASEAN that aimed at greater regional economic co-ordination (Robertson 2002); • The embryo of an East Asian regional organisation (Soesastro 2001); • Or, the latest manifestation of the evolutionary development of East Asian regional co-operation (Stubbs 2002: 441); • In essence, APT is the manifestation of an increased realisation of the need to expand co-operation between ASEAN and the three Northeast Asian countries.

Background of APT • Dr. Mahathir’s East Asian Economic Group (EAEG); • EAEG as an exclusive economic bloc within APEC; • Rejection from APEC developed member countries (i.e. US) because EAEG undermines their economic interests in East Asia; • Rejection from some Asian countries (i.e. Japan and Indonesia); • Indonesia suggested EAEG to be transformed into EAEC within APEC

Key Elements in the Making of APT • The involvement of the plus three countries in the Asia-Europe Meeting (ASEM) – Allowed leaders from ASEAN, Japan, China, and S. Korea meet on regular basis; • US fear towards the possible creation of a trade bloc amongst the East Asian countries began to subside; • The emergence of the Asian crisis of 1997

Concrete Moves towards APT • Second informal ASEAN Summit 1997; • Kim Dae Jung proposed the establishment of East Asian Vision Group (EAVG) & East Asia Study Group (EASG); • Early form of co-operation include financial co-operation (ASEAN Swap Arrangement – ASA) in 2000

EAVG & EASG Report 2001 • Three key areas of co-operation: economy, finance, and institution; • The establishment of an East Asia Free Trade Area (EAFTA) and East Asia Investment Area (EAIA); • The establishment of East Asian Monetary Fund (EAMF)

Rationales for APT Alatas (2001) & Sang Ho (2001): • Increase economic interdependence and complementarity; • Historical intention to strengthen co-operation in the East Asian region (i.e. PEC, ADB, ASPAC, etc.); • Challenges from globalisation

Opportunities of APT for ASEAN ASEAN’s economic objectives: • Market access in Northeast Asian countries & to secure more channels to obtain financial assistance and development aid • Neo-liberal policy-makers in Southeast Asia seek greater investment from China, Japan, and South Korea

Opportunities of APT for ASEAN Security objectives: • Potential bulwark against possible hostile behaviour from China; • Lessening US dominance over the security concerns of ASEAN member countries; • Pan-Asian nationalism and a reactionary defensive / offensive mechanism vis-à-vis major powers and multilateral institutions

Challenges of APT for ASEAN • How ASEAN could proceed with APT? (Division: the strengthening the ASEAN Secretariat vs. establishment of APT Secretariat); • APT leadership? • Bilateral Free Trade Agreements (BFTAs)?

How to proceed with APT? • Division within ASEAN; • Malaysia & Philippines: establish APT Secretariat in Kuala Lumpur; • Thailand, Indonesia, & Singapore: strengthening the ASEAN Secretariat so that ASEAN could manage the APT process better

APT Leadership: Northeast Asia Japan Vs. China • Japan has been ambivalent: 1. Prefer Asia-Pacific rather than East Asia regionalism (US-centred foreign policy) 2. Japan’s Focus on multilateralism • China desperate to lead East Asia (EHP in ACFTA);

APT Leadership: ASEAN? • APT, as suggested by its name, has been driven by ASEAN since beginning (Soesastro 2001); • APT meetings have been conducted in parallel with ASEAN meetings; • ASEAN asked the plus three countries to participate in ASEM; • ASEAN has the potential to mediate conflicts amongst China, Japan, and South Korea

Bilateral Free Trade Agreements (BFTAs) as Strategy to Achieve APT? • BFTAs have been used as key strategies to strengthen APT process; • Deep mistrust, suspicions, and the absence of regionalism in Northeast Asia make the final objectives of APT difficult to achieve; • BFTAs detrimental to ASEAN’s cohesion (Japan’s strategy of divide and conquer); • The limited participation of civil-society groups in these BFTAs

Key Concerns from Civil Society Groups in Southeast Asia (I) • The actual ability of ASEAN to lead APT? • The ability of the plus three countries to accept new set of values and idealism promoted by the Southeast Asian civil society groups in the making of ASEAN Community; • The participation of civil-society groups in the APT process?

Key Concerns from Civil Society Groups in Southeast Asia (II) • The ability of ASEAN to maintain its cohesion in light of APT and BFTA strategies; • The limited professional staffs at the ASEAN Secretariat? – the need for extra-bureaucracy agency? • The use of neo-liberal approach as a sole mechanism to promote regionalism in Southeast Asia

Conclusion • It is undeniable that APT offers a host of opportunities for the states involved in it.; • APT member countries should, therefore, address those aforementioned issues if they wish to make substantial and justified progress towards the strengthening of East Asian regionalism.

THE END & THANK YOU

POLITICAL-ECONOMY OF ASEAN AND APT