Transforming East Asia

Transforming East Asia: The Evolution of Regional Economic Integration

Copyright Date: 2006
Pages: 258
  • Cite this Item
  • Book Info
    Transforming East Asia
    Book Description:

    East Asian economic integration is on the rise. In the past decade, all of the region's powers have begun negotiating free trade agreements with their neighbors. They are also exploring broader regional options, such as the creation of an East Asian summit or free trade area. These developments have not always been welcomed by observers in other parts of the world. Some fear that they mark a turn away from integration into the global economy and herald the emergence of a closed, inward-looking bloc. In this timely and important book, Naoko Munakata offers an alternative perspective, based on her experience as an economic official and trade negotiator over the past 20 years. East Asian integration, she argues, is not driven by defensiveness or anti-Western sentiment. Instead, it reflects pragmatic calculations of economic interest, as well as a desire for mutual trust and a sense of community. Munakata makes her case by analyzing developments in the region since the mid-1980s, highlighting such important factors as the evolution of Asia-Pacific Economic Cooperation (APEC), the impact of the 1997-98 Asian financial crisis, and the rise of China. She also outlines possible future scenarios for the region and offers policy prescriptions for building on regionalism's achievements to date. Over the coming decades, the rise of China, its relationship with Japan, and the institutional arrangements that bind those countries to the United States and the countries of East and Southeast Asia will become critical factors in the global balance of power. Transforming East Asia is essential reading for anyone seeking to understand the roots of this transformation.

    eISBN: 978-0-8157-5886-0
    Subjects: Business, Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xii)
  4. Acknowledgments
    (pp. xiii-xvi)
  5. List of Abbreviations
    (pp. xvii-xx)
  6. 1 East Asia in Transition
    (pp. 1-7)

    The most dynamic region in the world today is East Asia, with one-third of the planet’s population and one-fifth of its gross domestic product (GDP).¹ The regional economy sprang back to life in the 1980s, when deepening interdependence began spreading economic benefits throughout the region after a century of wars and ideological struggles between various powers, which eventually saw greater sense in development and cooperation. Even the socialist countries among them were introducing some market reforms before the end of the cold war. This focus on economic development, together with the security presence of the United States, has defused potential...

  7. 2 The New East Asian Regionalism
    (pp. 8-36)

    On October 22, 2000, Japan’s prime minister Yoshiro Mori and Singapore’s prime minister Goh Chok Tong arrived at an agreement of vast economic implications for East Asia.¹ In January 2001 they would launch formal negotiations for the region’s first preferential trade agreement (PTA) under Article 24 of the General Agreement on Tariffs and Trade (GATT), for a new-age economic partnership to be known as the Japan-Singapore Economic Partnership Agreement (JSEPA).² The term “new age,” coined by Prime Minister Goh, reflected the entrepreneurial spirit of the talks and the hope for new solutions to a wide range of problems facing the...

  8. 3 The State of Regionalization
    (pp. 37-61)

    As mentioned earlier, world attitudes toward East Asian regionalization, especially Japan’s role in it, have changed drastically since the late 1980s. As market processes pushed economic integration along, a primary concern was that the region might turn into a closed economic bloc, with Japanese firms replicating “their domestic system of networking in the region” and U.S. and European multinational corporations (MNCs) being “gradually squeezed out by the increasingly tight and exclusive nature of this highly competitive Japanese production alliance.”¹ By the end of the 1990s, Japan was in a state of prolonged stagnation and the United States on an upswing,...

  9. 4 Competing Proposals for Regionalism
    (pp. 62-80)

    In the mid-1990s, a map of the world showing all the countries with preferential trade agreements (PTAs) colored in would have left Northeast Asia almost entirely blank.¹ Most countries in all other regions belonged to some kind of PTA. More important, countries of the Organization for Economic Cooperation and Development (except for the two from East Asia) had concluded full-fledged regional trade agreements (RTAs) under GATT Article 24 and were expanding the membership to include their less-developed neighbors. There was no such RTA anywhere in East Asia.²

    Five years later, almost all the economies in East Asia were negotiating FTAs...

  10. 5 The Primacy of Asia Pacific Economic Cooperation
    (pp. 81-101)

    The second phase of Asia Pacific regionalism saw Asia Pacific Economic Cooperation (APEC) emerge as the primary vehicle for regional cooperation. The period essentially began with the 1992 APEC ministerial meeting, followed by the inauguration of William Jefferson Clinton in the United States in 1993 (the Clinton administration would soon define APEC’s course). The period ended in mid-1998 when the consequences of the financial crisis in East Asia unfolded.

    Although the George H. W. Bush administration had became more proactive in strengthening APEC since 1991, it was the Clinton administration that focused directly on Asia and the Pacific, announcing that...

  11. 6 New Assumptions about Regionalism
    (pp. 102-114)

    East Asian regionalism passed into its third phase during the financial crisis of 1997, which dramatically changed the landscape and mind-set of regional economies. The crisis helped remove the taboos on free trade agreements (FTAs) and East Asian–only forums and encouraged East Asian capitals to experiment with various additional layers of economic institutions, in search of effective and feasible tools to complement global institutions. This period is much shorter than the previous two, ending in late 2000 when China began exploring FTAs.

    From the outset, the “contagion” of the currency crisis reminded the countries in the region of their...

  12. 7 The Race for a Free Trade Agreement
    (pp. 115-132)

    In the fourth period, the regional landscape changed yet again, this time owing largely to the rise of China. By the turn of the century, China had become an important link in the production network and its growing domestic demand was helping to regionalize the East Asian economy, also making it an indispensable member of the region’s economic framework. At the same time, China had become an active player in promoting regionalism, and this activism accelerated intraregional competition.

    Beijing’s new attitude toward regional cooperation can be traced to a proposal by Premier Zhu Rongji at the ASEAN-China summit on November...

  13. 8 Major Powers and East Asian Economic Integration
    (pp. 133-168)

    As the preceding chapters suggest, the major powers that have shaped various frameworks for economic integration in East Asia have just begun to work on how toactuallyreduce transaction costs in the region. For a long time, they were bogged down in the more divisive issues (the membership of various forums or the approach to trade liberalization) instead of focusing on what they could immediately achieve, so as to allow them to build on successful experiences. Interest in substantive issues took hold only recently—in the wake of the Asian financial crisis in the case of Japan, South Korea,...

  14. 9 How Economic Integration Changed East Asia
    (pp. 169-186)

    Regional economic integration has significantly changed the East Asian landscape in the past two decades. In the mid-1980s, East Asia did not have a regional identity. Its economies were not integrated in a de facto sense, much less an institutional one. Most Asian developing countries still protected domestic markets so they could pursue import substitution while promoting exports to U.S. and European markets from limited enclaves. Factories producing for the protected domestic markets operated below the minimum efficiency scale. Intraregional trade was driven mainly by bilateral trade with Japan. The region’s countries exclusively followed the General Agreement on Tariffs and...

  15. Notes
    (pp. 187-244)
  16. Index
    (pp. 245-258)
  17. Back Matter
    (pp. 259-260)