CHAPTER III PRECONDITIONS AND PRESENT SITUATION OF
4.3. ASEAN’s Role in Creating of East Asian Community
4.3.2. ASEAN and East Asian Regional Integration
Concept (“Vision”) of EAC was first succinctly stated in the report of the expert group of the fifth summit of the leaders of ASEAN+3 in Brunei in 2001 as “the transformation of East Asian countries from the country-region into the real regional community with shared challenges and threats, with the common aspirations and parallel destinies” (Jae-Seung, 2004). The report cited a variety of reasons for this transformation, the principal of which were three:
1) the establishment of a regional (institutional) identity due to the fact that other regions (Europe, North and South America) have already formed or are actively shaping their device;
2) to strengthen the weight of Asia in solving regional and global problems due to its increasing role in international development; and
3) to promote regional peace and prosperity through cooperation, taking into account its own internal dynamics of the region (Jae-Seung, 2004).
The term “community” is pretty vague by all statements of the EAC creators. For example, released in 2008 in Japan Center for International Exchange collection of articles on the prospects of creating an East Asian Community, it is said that Communities are a group of states that actively interact, and have the similar interests and common historical destiny (Wanandi, 2008).
East Asian integration actually is not about creating a kind of regional superstructure in the European style, and about the process of building what appears to be as a community, on the principle of “the aim is nothing , the movement is everything”. Thus, the obvious is the same approach that is applied to the construction of the ASEAN community itself. In general, East Asia has developed a kind of “division of labor”
between the three institutional structures – the East Asia Summit (whose priorities are trade and investment issues), the ASEAN+3 dialogue mechanisms (financial and regional issues) and ASEAN (the development of regional infrastructure).
the complementary nature of the processes of creation of ASEAN Community, ASEAN+3 and EAS, the ASEAN leaders have confirmed the orientation of the second format as the main one in the present.
Half a century of experience in the EU shows that the success of the integration needs leaders as France and Germany were for the EU. International relations in the region are very complex. The role of the leader has got to ASEAN for a long time, according to most analysts of different countries, because it is the most viable option for everyone (Huisken, 2008). However, there are other views of experts who believe that ASEAN itself has too many problems hindering carry out this mission, and it will likely be determined by the development of relations between China and Japan. As long as everyone agrees to the role of ASEAN as it is the core of regional integration.
One way or another, but the building of the EAC was initiated on behalf of ASEAN and developed under its notable influence. In fact, if the ASEAN countries did not take on this role, the process would have been completely impossible. ASEAN members have always been interested in the development of a broader dialogue on cooperation in East Asia. Characteristically, at this moment the strategy on how ASEAN integration in East Asia is to develop a system of bilateral agreements on the establishment of the FTA on the so-called umbrella scheme around ASEAN as the center, on the basis of which should be build the future of the East Asian Community. The prototype of EAC – ASEAN+3 is not a formalized organization, but a form of cooperation framework, based on dialogue, which is done at the same time in different structures such as among the 10 ASEAN members, among 13 countries with China, Japan and South Korea;
between ASEAN and the three Northeast Asian countries separately in the format ASEAN+1 (which enabled China, Japan and South Korea to establish special relations with ASEAN) and also among the three Northeast Asian countries, which held their first trilateral summit in 1999. The process does not confine by the summits of leaders.
It entailed regular meetings at the level of ministers, their deputies and senior officials meetings in various fields of cooperation. At present the cooperation is carried out in 18 areas. One of the most important elements of this is the support and development of regional financial cooperation, which included the establishment of the Asian bond funds aiming to raise capital for investment, as well as a number of bilateral and
multilateral currency swap agreement aimed at preventing a repeat of the financial crisis.
The growing economic interdependence between the ASEAN countries and the countries of the “plus 3” makes them look for higher forms of integration through the creation of an FTA with each of these three states. In this regard, there is growing interest for the establishment of a FTA in East Asia as a whole (EAFTA). This project is in its stages of study by experts and government officials of ASEAN+3 (Report by Joint Expert Group, 2006). Such a position of ASEAN can be explained by the fact that all three dialogue partners of ASEAN in Southeast Asia already have close economic ties with this region and are providing considerable assistance to it and have a great investment.
The structure of the interaction of “ASEAN+3” has already passed some way towards economic integration. According to the Asian Development Bank in the total foreign trade of the ASEAN+3 trade share between themselves is more than 54% of their total foreign trade turnover (“Chinese-ASEAN Trade,” 2011). This high performance is equal to the EU countries on the eve of the Maastricht Treaty. Directly in the trade between the countries of Southeast Asia, this performance is remaining at the level of 20-25 % for the past many years (ASEAN Chartbook, 2013).
ASEAN+3 took a second Joint Statement on Cooperation in East Asia, which sets out the practical and strategic vision for the next decade. State leaders have confirmed that the ASEAN+3 will continue to be the main driving force leading to the long-term goal of building an East Asian Community with ASEAN as its core.
In October 2008, China, Japan and the Republic of Korea decided to create their own regional financial controller outside of the “G8” – a kind of analogue of the “G8”
Financial Stability Forum, which was formed in 1999 (“China–Japan–South Korea trilateral summit,” 2009). The task of the new body is to monitor regional financial institutions, to increase their transparency and to tighten the rules for their functioning.
ASEAN countries agreed to extend the work of the new financial regulator on ASEAN, although its findings and proposals will have only a recommendation to the governments of these countries. Also, ASEAN+3 is paying a special attention in recent years on cooperation of two interrelated areas: food and energy security. In particular, it
was decided to accelerate the creation of a reserve stock of rice for ASEAN+3 for emergency contingency (APTERR) (Trethewie, 2013) and signed an agreement on oil security (ASEAN Petroleum Security Agreement – APSA) for a period of 10 years (Youngho and Koh, 2009).
If talking about trade relations in detail, I calculated the share of growth of Northeast Asian countries (China, Japan and South Korea) in ASEAN foreign trade in 2009 and 2012. Comparing the statistics of 2009 with 2012 it is seen that the ASEAN countries increased their exports to the «plus 3» from 194 billion to 322,8 billion dollars, i.e. by 66,4 %. At the same time import is grown from China, Japan and South Korea to ASEAN countries, which grew by 76,9%, reaching a total volume of 219,9 billion to 389,1 billion dollars in the whole volume of trade within the ASEAN+3 reached 711,9 billion dollars, which is 71,9 % more than in 2009 (ASEAN Statistical Yearbook, 2010;
ASEAN Statistics, 2013). These statistics are also shown on these Tables:
Table 1.2 ASEAN Exports and Imports by Trading Partner, 2009
(value in USD million; share in percent)
Countries Export Import Total
Value Value Value Share (%)
China 81.591 96.594 178.185 11.6
Japan 78.069 82.795 160.864 10.5
Republic of Korea
34.293 40.447 74.740 4.9
Total 193.953 219.836 413.789 27
Source: ASEAN Trade Statistics Database
Table 1.3 ASEAN Exports and Imports by Trading Partner, 2012
(value in USD million; share in percent)
Countries Export Import Total
Value Share (%) Value Share (%) Value Share (%)
China 141.554 11.3 177.01 14.5 318.564 12.9
Japan 126.305 10.1 136.12 11.2 262.425 10.65
Republic of Korea
54.993 4.4 76.01 6.2 131.003 5.3
Total 322.852 25.8 389.140 31.9 711.992 28.85
Source: ASEAN Merchandise Trade Statistics Database, as of July 2013
It is also compared the trade statistics of Northeast Asian countries (China, Japan, South Korea) with European Union. As these following tables and figures show the share of these countries is more in ASEAN than EU. In trade with EU it is noticeable that the trade rate is declining from 2009 to 2012. Total trade share in 2009 was 19,05 % and in 2012 it was 18,25 %. On the contrary, total trade share in ASEAN is increasing from 27
% in 2009 to 28,9 % in 2012. This argument states that ASEAN plays more important role in “plus 3” countries’ foreign policy.
Table 1.4 EU Trade with main partners, 2009
(value in USD million; share in percent)
Countries Export Import Total
Value Share (%) Value Share (%) Value Share (%)
China 117.22 7.5 281.39 17.9 398.61 12.7
Japan 51.57 3.3 80.16 4.7 131.73 4
Republic of Korea
30.89 2.0 46.11 2.7 77 2.35
Total 199.68 12.8 407.66 25.3 607.34 19.05
Source: IMF, EUROSTAT-COMEXT (EU)
Table 1.5 EU Trade with main partners, 2012
(value in USD million; share in percent)
Countries Export Import Total
Value Share (%) Value Share (%) Value Share (%)
China 188.48 8.5 379.79 16.2 568.27 12.35
Japan 72.69 3.3 83.60 3.6 156.29 3.45
Republic of Korea
49.47 2.2 49.60 2.1 99.07 2.15
Total 310.64 14 512.99 21.9 823.63 17.95
Source: IMF, EUROSTAT-COMEXT (EU)
Figure 1.2: Share of trade of China, Jap regional organizations European Union
Source: IMF, EUROSTAT
Figure 1.3: Share of trade of China, Jap regional organizations European Union
Source: IMF, EUROSTAT 80,95%
China
Republic of Korea
12,35%
81,75%
China
Republic of Korea
Share of trade of China, Japan and Republic of Korea with regional organizations, 2009
European Union ASEAN
Source: IMF, EUROSTAT-COMEXT (EU), ASEAN Merchandise Trade Statistics Database
Share of trade of China, Japan and Republic of Korea with regional organizations, 2012
European Union ASEAN
Source: IMF, EUROSTAT-COMEXT (EU), ASEAN Merchandise Trade Statistics Database 12,7 %
4 %
2,35 %
Japan Rest partners
11,6 %
73 %
China Japan
Republic of Korea Rest partners
12,35%
3,45%
2,45%
Japan Rest partners
12,9%
71,15%
China Japan
Republic of Korea Rest partners
an and Republic of Korea with
EU), ASEAN Merchandise Trade Statistics Database
an and Republic of Korea with
EU), ASEAN Merchandise Trade Statistics Database 11,6 %
10,5 %
4,9 %
Japan Rest partners
12,9%
10,65%
5,3%
Japan Rest partners
Today, ways of development of EAC so far are still unclear. It is too big internal contradictions and little trust in each other. Therefore, many ASEAN countries, being careful sit on the fence on the various construction projects of EAC. Their common concern is the fact that cooperation in the process of the EAC should not undermine the ASEAN community, but rather should complement and strengthen it. At the current rate at the conclusion of many bilateral trade agreements on the establishment of FTA and agreements on investment with its dialogue partners in the ASEAN+1 there is a risk of collapse of ASEAN itself, or the actual absorption of it by more powerful union – ASEAN+3, which is increasingly positioning itself as the East Asian Community.