Academic journal article Southeast Asian Affairs
1. Introduction With the World Trade Organization's (WTO) Cancun ministerial meeting of September 2003 failing as an interim stocktaking for the Doha round scheduled for completion by January 2005, it can be expected that the momentum for "new regionalism" will grow. Distinguished from "old regionalism" as economic regionalization, the political economy of the new regionalism since the 1980s is driven by globalization, information technology, knowledge-based economy, deregulation, and strategic/security interests. More unilateral, bilateral, trilateral, "pluri-lateral", and cross-regional free trade agreements (FTAs) and regional trade agreements (RTAs) have been notified to the WTO as a response to mismanaged multilateralism, perceived or otherwise.
The new regionalism seems like a realignment of the traditional triad, made up of the European Union (EU), the North American Free Trade Area (NAFTA), and the emerging East Asian regionalism. In East Asia, a burgeoning China within the ASEAN Plus Three (APT) co-operative framework is altering the dynamics of ASEAN as well as the old Japanese-led flying-geese pattern of trade and foreign direct investment (FDI).1 Even the Asia-Pacific Economic Cooperation (APEC) forum seems "lost" given the new regionalism and intramural APEC difficulties. Non-completion of the ASEAN Free Trade Area by 2002 and synchrony with the new regionalism as WTO wanes have prompted individual ASEAN countries to enter into bilateral FTAs.
An ASEAN Economic Community (AEC) by 2020 --- proposed by Singapore at the 2002 ASEAN summit --- as an FTA-plus but not quite a customs union, albeit with some common market features,2 may muddle through much like the ASEAN 2020 vision enunciated at the 1998 ASEAN summit, in the absence of resolute political will. ASEAN's geographic and buffer value between a rising China and an eclipsing Japan has nonetheless attracted FTA offers from Australia and New Zealand (which constitute a Common Economic Relations, or CER, partnership between themselves), Japan, India, and the United States.3
Singapore, Korea, and Japan have also initiated their own bilateral FTAs. Singapore has signed bilateral FTAs with five countries of the Organization for Economic Cooperation and Development (OECD) and is negotiating with many others, including Jordan --- an "unnatural" though strategic trading partner.4 Thailand's aim to be a halal food centre has motivated its FTA with Bahrain. Its FTA with China liberalizing trade in some agriculture and food products may set a trend that runs contrary to Japan's traditional protection of agriculture. Malaysia initially resisted following Singapore's FTA example, but its instinctive competition with its nearest neighbour prevailed. Malaysia subsequently embraced the new regionalism with its first pact with Japan.
The global and regional backdrop that propelled Singapore's bilateral FTAs will be discussed in Section 2, followed by the raison d'être and arguments for Singapore's trade strategy in Section 3. Then follows an assessment in Section 4 that weighs it not econometrically or quantitatively in terms of trade-creation or trade-diversion, but from the political economy perspective of a small, open, city-state caught in the cross currents of globalization, regionalization, and regionalism while seeking to uphold its sovereignty. Section 5 presents the issues, challenges, and prospects for Singapore. The concluding section draws out generalizations and policy implications for East Asian regionalism.
2. State of Play of Multilateralism and Regionalism It took time and