ASEAN is currently attracting much attention as a major growth center in the global economy. With a market of more than 600 million people and an abundant young labor force, whose working-age population will peak in the second half of the 2040s, ASEAN has achieved remarkable economic growth with its GDP expanding threefold over the past ten years. As the ASEAN region has grown economically, Japan-ASEAN economic relations have steadily deepened.
By 2014, ASEAN became Japan’s second-largest trading partner trailing only China. Likewise, Japan comes second only to the European Union in terms of foreign direct investment with Japanese companies based in ASEAN numbering more than 8,000. It is clear that Japan and ASEAN have built a robust economic relationship over the past decades.
The ASEAN Community (AC), consisting of the ASEAN Political-Security Community (APSC), ASEAN Economic Community (AEC) and ASEAN Socio-Cultural Community (ASCC), was established on Dec. 31. This community building is a continuous and evolving process with ASEAN adopting a road map at the ASEAN Summit in November to further its integration over the next ten years.
The government of Japan has utilized official development assistance (ODA) and the Japan-ASEAN Integration Fund (JAIF) to assist the community-building process through such areas as strengthening connectivity and narrowing the development gap in the region. One such example is Japan’s assistance to the Mekong region. Prime Minister Shinzo Abe announced at the Mekong-Japan Summit Meeting last July that Japan would provide ¥750 billion of ODA to this region over the next three years. Additionally, the “New Tokyo Strategy 2015 for Mekong-Japan Cooperation” was adopted to substantiate Japan’s cooperation with the Mekong region.
Japanese businesses in the region are also contributing to ASEAN’s development not only through commercial activities, but also by providing support to improving the regional business environment. One example of such support is the annual dialogue between the Federation of Japanese Chambers of Commerce and Industry in ASEAN (FJCCIA) and the Secretary-General of ASEAN where they exchange views on issues that need to be addressed and resolved to attract foreign investment and develop small and medium-sized enterprises in the region.
In the political and security realm, rising tensions in the South China Sea have tested ASEAN solidarity. Among ASEAN member states, Brunei, Malaysia, the Philippines and Vietnam have made sovereignty claims over maritime territories in the South China Sea. Regarding this and subsequent related issues, Japan continues to uphold freedom and peace at sea. Abe has called for strict abidance to the “Three Principles of the Rule of Law at Sea”; to make claims based on international law; not to use force or coercion; and to settle disputes by peaceful means. He has also urged the concerned parties to exercise self-restraint and has supported arbitration procedures. To assist in maintaining peace and stability, Japan has participated in cooperation activities, which include capacity building through the provision of patrol boats for maritime law enforcement.
In light of this, the East Asia Summit (EAS) provides a useful framework for regional powers and ASEAN countries to discuss regional concerns. The Kuala Lumpur Declaration issued at the EAS in November, reaffirmed that the EAS would continue to be “a leaders-led forum for dialogue on broad strategic, political and economic issues of common interest and concern with the aim of promoting peace, stability and economic prosperity in East Asia.” Permanent Representatives and ambassadors to ASEAN from the 18 EAS participating members in Jakarta are expected to play a key role in implementing EAS leaders’ decisions.
In the economic area, ASEAN centrality is also being tested. The Trans-Pacific Partnership (TPP) negotiations reached a broad agreement in October and, among ASEAN countries, Brunei, Malaysia, Singapore and Vietnam are participating in the TPP, while other member states have shown interest in it. It is not very clear at this moment how the TPP would affect the ongoing negotiations on the Regional Comprehensive Economic Partnership (RCEP). The RCEP is an initiative designed to achieve broad economic partnerships across East Asia and encompass the economic partnership networks centered on ASEAN.
When the RCEP is concluded, it is expected to contribute to the promotion of trade and investment between the participating countries, expansion of the supply chain in the region and moving one step closer toward the Free Trade Area of the Asia-Pacific (FTAAP). Taking into account that the RCEP is not only about tariff reductions, but also creating rules in such areas as trade in services, investment, e-commerce and intellectual property, Japan will continue to work toward the early conclusion of a comprehensive and high-level RCEP agreement.
Japan and ASEAN celebrated the 40th anniversary of their relationship in 2013. Since then, Japan has continued to work on building strong relationships with ASEAN and each of its member states to elevate economic prosperity and maintain peace and stability in the region. Japan is determined to remain a trusted partner to ASEAN, while continuing to provide support to the ASEAN integration process throughout 2016 and beyond.