CAMBRIDGE, England — There are so many summit meetings nowadays that it is difficult to keep up. Only a week after the Asia-Pacific Economic Cooperation forum summit finished in Mexico, East Asian governments met at the Association of Southeast Asian Nations plus 3 summit in Phnom Penh. ASEAN plus 3 is now probably more important for East Asian countries than APEC, which has become an organization dominated by U.S. interests.
ASEAN plus 3 was born as a reaction by East Asian countries against what they saw as unwarranted U.S. interference in their affairs. In the early to mid-1990s, Malaysian Premier Mahathir Mohamad proposed the East Asian Economic Grouping, which was to be a free trade area, or FTA, involving the 10 ASEAN countries and China, Japan and South Korea.
The EAEG was intended to balance the development of the North American Free Trade Agreement and the continued development and prospective enlargement of the European Union. It ran into fierce opposition from the United States and the idea was nudged to the back burner.
The 1997 Asian financial crisis moved the EAEG to the front again — as a proposal from Japan that East Asian countries set up their own Asian Monetary Fund. This was attractive to other East Asian countries that saw it as a way of escaping what they saw as the tyrannical control of their economies by the U.S.-dominated International Monetary Fund.
The U.S. blocked the establishment of the AMF, too; only this time the ASEAN plus 3 members went ahead with the establishment of a more modest financial support arrangement among themselves. They established a currency-swap arrangement in Chiang Mai, Thailand, in May 2000, following a series of ministerial-level meetings of the 13 countries.
The 13 countries that make up the ASEAN plus 3 summits are in fact the same 13 countries that Mahathir suggested should come together in the EAEG free trade group. The Malaysian leader has again been pressing for such a free trade group, except that this time around he is confusingly calling it the East Asia Economic Caucus.
The proposal for an FTA covering the 13 countries of ASEAN plus 3 was taken up as a formal proposal at the Singapore summit meeting in 2000. At that time the leaders agreed to have a study group examine the impact that such an FTA would have on member economies. The group gave its report at the summit meeting in Phnom Penh, but no action was taken, as China had diverted attention from it with a previous proposal.
At the Singapore summit meeting, Chinese Premier Zhu Rongji had proposed that the ASEAN plus 3 countries set up the East Asia Forum. The EAF was not to be a FTA, but would have economic issues on its agenda as well as political and security issues of regional interest. In this way the Chinese were indicating that they would not support an FTA that comprised ASEAN plus the three Northeast Asian countries.
In Phnom Penh the initiative was again taken by China to distract attention from an ASEAN plus 3 FTA, arguing that the three Northeast Asian countries should get their own act together first. Zhu successfully pressed South Korea and Japan to set up another study group — from the private sector — to examine possible trade arrangements among them as a precursor to a bolder ASEAN plus 3 FTA.
Separately, in 2001, the Chinese government had upset the apple cart by proposing an ASEAN plus 1 FTA, involving just the 10 ASEAN members and China. The study group to set the negotiating framework for this restricted FTA gave its report at the Phnom Penh meeting. ASEAN and China decided to set up an FTA — a version of ASEAN plus 1 to be known as ACFTA. Zhu proposed ACFTA at a meeting with his ASEAN counterparts just before Prime Minister Junichiro Koizumi was due to meet with them. Humiliatingly, Koizumi had to wait for an hour in the antechamber while the Chinese proposal was discussed.
Koizumi has not been idle on this matter. He has traveled around East Asia making his own proposals for ASEAN FTAs with various groups of countries. He has, for example, suggested ASEAN plus 5 (China, Japan, South Korea, Australia and the U.S.). Another version left out Australia and the U.S., substituting Hong Kong and Taiwan instead.
It has become clear that an East Asian FTA with China but without other heavyweight economies is not acceptable to the Japanese prime minister. He obviously thinks that China would take the leadership role in such a grouping. China thinks the same way, which is why it has made it clear that an ASEAN plus 3 that includes Japan is unacceptable.
In September, when Koizumi finally realized that ASEAN was not going to agree to any of the ASEAN plus 5 deals, he said he would be propose an alternative ASEAN plus 1 (Japan) FTA. Poor South Korea was left out again, but surely we can expect it to come up soon with a proposal for an ASEAN plus 1 (South Korea) FTA.
While Japan and China have been looking south and cultivating friends in Southeast Asia, South Korea has been engaged in a study of a proposed bilateral FTA with Japan. A study group will report on this soon. Ahead of its publication, several South Korean leaders, most recently Finance Minister Jeo Yun Churl, have said the FTA is not intended to exclude China; China, they say, would be welcome to join later. Sometimes it is hard to live at the foot of a mountain.
The agenda for the Phnom Penh summit was complicated enough with the various proposals for free trade agreements involving ASEAN and one or more of the three North Asia countries (and there are even proposals for larger groupings to bring in Mongolia and North Korea). At the APEC summit in Mexico, though, the U.S. muddied the water further by offering to set up bilateral free trade deals with any of the ASEAN countries that want one — as long as they are members of the World Trade Organization.
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