economies in sub-regional economic zones.38)For regionalism to become a reality governments must find compatible and mutually beneficial ways to cooperate and not compete. Whether Northeast Asia’s nationally-driven economies are ready for comparative advantage remains to be seen.
Nevertheless, Japanese investment, Korean technology and, Chinese manufacturing comprise one joint arrangement with economic potential.39 ) None of this will be easy, but the potential benefits are immense.
Regardless, a regional approach that focuses only on economic issues and infrastructure, leaving political and security issues aside, will lack a solid foundation from which to cultivate multilateral cooperation.
investment partner.”41)
Faced with similar conundrums across Northeast Asia, the U.S. has reacted to Asian moves toward either economic or security communities with mixed results. It sponsored the Southeast Asian Treaty Organization and APEC (although neither specifically cater to Northeast Asian needs), but rejected the Malaysian plan for an East Asian Economic Caucus on the grounds that it excluded the U.S. Additionally, many Asian nations felt that the U.S. and U.S.-backed institutions such as the International Monetary Fund (IMF) failed to fill the void of the 1997-1998 Asian financial crisis, and instead pushed its market oriented agenda. The U.S. further exacerbated this sentiment, when it rejected the Japanese plan for an Asian IMF in 1999.
The result was for Asian nations to create several ad hoc bi- and multilateral organizations such as the Chiang Mai Initiative, and ASEAN+3.
U.S. officials have also been displaying discontent with the plans for the 2005 East Asian Summit (EAS) to be held in Kuala Lumpur in December. In response to the financial crisis in 1997-1998 former South Korean President Kim Dae-jung formed the East Asian Vision Group, which later submitted a report entitled “Towards an East Asian Community” to the ASEAN+3 summit in 2001. The report called for the transformation from a “region of nations to a bonafide regional community with shared challenges, common aspirations, and a parallel destiny.”42)However, Condoleezza Rice voiced American concerns to Foreign Minister George Yeo on her February visit to Singapore. The primary concern seems to be around the idea of an
“exclusive”or “inward looking”East Asian Community (EAC).43)Thus far, the ten ASEAN member states, plus China, India, Japan, and the Republic of Korea have been invited, with the option of including Australia and New
156-- Peter M. Beck and Melissa Hanham
41) Francis Fukuyama, “Re-Envisioning Asia,” Foreign Affairs, Vol. 84, Iss. 1, Jan/Feb 2005, p. 75.
42) Axel Berkofsky, “China’s Asian Ambitions,” Far Eastern Economic Review, Vol. 168, Iss.7, Jul/Aug 2005, p. 20.
43) Ibid.
Zealand in the future. U.S. frustration now seems to echo its criticism of Malaysian Prime Minister Mahathir Mohamad’s previous suggestion of East Asian Economic Caucus, as “Asia for Asians only.”
Whether American frustration is well founded or not is an entirely different question. Hopes for December’s summit to turn into something more substantive are generally low. However even more importantly, there is strong evidence to suggest that greater Asian multilateralism will in fact create a more stable and secure region. Many were concerned about China’s entry into the World Trade Organization (WTO). However, four years later China has proven to be an accommodating member. In fact, even in the decade before it joined the WTO, China reduced tariff barriers so much that it had the lowest protection of any developing country in the world, and by mid-2002 had abolished or amended 2,600 legal statutes and regulations that were not consistent with its WTO accession agreement.44) Furthermore, China’s participation in said organization has allowed quiet reforms to take place promoting transparency and rule of law. Surely, the U.S. finds such measures in its interest.
The U.S. clearly has two options. It can either continue to intermittently scuttle plans for Asian multilateralism in an attempt to isolate rising Asian powers, or it can embrace Asian efforts at multilateralism and in this fashion include itself in the process. One of the great ironies is that the fear of American conservatives over China’s rising power may actually be a self-fulfilling prophesy if the U.S. continues to isolate itself from the process. Aside from Japan and Singapore, very few Asian nations want to include the U.S. in a potential community. The argument is often made that the U.S. doesn’t understand that economic development, and not terrorism is priority one for most Asian nations. China does. In addition, they see China’s commitment to a free trade agreement with ASEAN by
44) Neil C. Hughes, “A Trade War with China?”Foreign Affairs, Vol. 84 Iss. 4, Jul/Aug 2005, p. 94.
2010 as a sign that China will indeed be the benevolent leader for Asia that it promises to be. Thus, the absence of U.S. involvement can very well give China the opportunity it needs to step up and fill the void.45)
Though never an easy task in U.S. politics, the Bush administration should attempt to coordinate efforts with the U.S. Congress, and embrace the growing efforts at Asian multilateralism, and more specifically Northeast Asian multilateralism. A natural first step, though one that did not happen, would have been for Condoleezza Rice to attend the ASEAN Regional Forum’s annual meeting in Vientiane in August instead of sending Robert Zoellick in her place. By showing an increased interest in ASEAN, Americans can combat the criticism that they do not take Asian forums seriously to begin with.46) While some in Washington clearly believe in the benefits of the present system of U.S.-centric bilateral agreements, these benefits are short-term at best. Economic power relations are shifting in Northeast Asia, and the U.S. needs to recognize its long-term interest in keeping the region stable and economically healthy.47)
Conclusion
Given the historical legacies and political realities of Northeast Asia, meaningful multilateralism, much less regional integration, is unlikely in the foreseeable future. This will require a level of trust and political will that is lacking today. Financing regional development will be a problem as long as China, Korea, and Japan remain primarily concerned with keeping their own economies stable and on track, even at the expense of one
158-- Peter M. Beck and Melissa Hanham
45) Berkofsky, p. 22.
46) Ibid.
47) Fukuyama, p. 79.
another. At the same time, economic interdependence and energy needs are deepening, creating an environment conducive to regional infrastructure development. China’s rise is driving regional economic growth, boosting Korea’s and Japan’s economy. And Korea and Japan are looking for creative ways to boost ties despite political concerns. Additionally, the U.S. will need to make a concerted effort to rethink its haphazard approach to multilateralism in Northeast Asia, as well as Asia proper.
Nevertheless, Northeast Asian regionalism is by no means unattainable.
We expect economic links to continue to grow despite regional antagonisms, given that the private sector tends to seek economic linkages irrespective of government relations. Moreover, governments do understand that continued economic growth depends upon further economic cooperation. However, Northeast Asian relations remain precariously on edge, which could easily upset the stability necessary for steady growth of economic linkages, and of attracting foreign investment to finance badly-needed infrastructure projects. The recent shift in Japanese overseas investment from China to Southeast Asia provides a vivid example.
Although we remain skeptical as to the viability of creating institutions to manage regional development, the three powers of Northeast Asia certainly can accelerate economic growth and infrastructural linkages on their own by cooperating around areas of common concern. Such projects could work only if they do not threaten sovereignty or stability of the countries. Successful cooperation would have a positive impact on economic and political ties, and would facilitate foreign investment to build up the region’s inadequate energy and transport infrastructure, a necessary precondition for continued economic growth and prosperity.