Academic journal article Journal of Southeast Asian Economies

New Regionalism in East Asia: How Does It Relate to the East Asian Economic Development Model?

Academic journal article Journal of Southeast Asian Economies

New Regionalism in East Asia: How Does It Relate to the East Asian Economic Development Model?

Article excerpt

I. Introduction

In recent years a new regionalism has begun to emerge in East Asia that represents a clear break from the region's strong history of multilateralism. The countries of East Asia have been giving more attention to ways of expanding intra-regional trade that include: the establishment of regional trade agreements (RTAs) such as ASEAN Plus Three (APT); plans to establish a free trade area involving the economies of ASEAN and China; as well as moves towards bilateral trade agreements (BTAs). Such a development is important given that an export-led growth and development strategy provided the platform for the region's remarkable, and prolonged, period of high and sustained economic growth dating back to the 1960s, and that lies at the core of the East Asian Development Model (EADM). Export growth will remain a key ingredient for the recovery of the region after the financial and economic crisis of 1997-98. The trend towards this new regionalism, the reasons for it, its impact upon the region, its future evolution and prospects are, therefore, of profound regional, and indeed global, significance.

This article focuses upon the meaning and implications of this new regionalism for the "old" EADM and explores the key ingredients of an emerging "new" EADM growth and development paradigm, incorporating the new regionalism that appears to be emerging in the wake of the 1997-98 crisis. In doing so, the article proceeds as follows. Section II summarizes recent developments in regional trade agreements in East Asia, and discusses the factors behind this new tide of regionalism. Section III discusses the implications of the new regionalism in the context of the EADM past and present. Section IV presents some concluding remarks.

II. Recent Development of RTAs in East Asia

II.1 Recent Developments

Until the Asian crisis erupted in 1997, the East Asian economies pursued a multilateral approach to trade throughout the post-war period, unlike Western European countries and the United States. In particular, Japan, China, and South Korea were the world's only major economies that had yet to conclude a free trade agreement (FTA). The sole exception was the Association of Southeast Asian Nations (ASEAN), which has been planning an FTA for several years with a target date of 2002. However, a new regionalism is emerging in East Asia. A number of bilateral agreements have been concluded and are being negotiated or studied. Japan signed an agreement in January 2002 with Singapore to create an FTA. Japan has also negotiated, studied, or considered bilateral FTAs with Korea, Chile, Mexico, Canada, Australia, New Zealand, Switzerland, Taiwan, and Thailand. Korea is also negotiating with Chile, and studying bilateral FTAs with New Zealand, Mexico, Thailand, as well as Japan. Singapore and New Zealand signed an agreement in November 2000 to form a Closer Economic Partnership, based on a free trade area. Singapore is currently negotiating a bilateral regional arrangement with Australia, and is laying the groundwork for similar agreements with Canada, Mexico, India, and the United States. Hence, in the East Asian region, Japan, Korea, and Singapore are involved in negotiations with more than one other country about the formation of bilateral agreements. (1) This trend towards bilateralism is likely to spread to other East Asian countries.

Many-country agreements are also being negotiated or studied in East Asia. ASEAN and the Closer Economic Relations (CER) countries discussed a link between the two free trade areas in November 2000, even though the recommendation from a high-level taskforce to proceed with negotiations was not adopted by the meeting of the ASEAN-CER Ministers. A Northeast Asian Free Trade Area (NEAFTA) consisting of China, Japan, and Korea is also being studied. At the APT summit in November 1999, Japan, Korea, and China agreed to launch a joint research project involving institutes of the three countries to discuss the possibility of forming an FTA among themselves in Northeast Asia. …

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