Officially, economic matters topped the agenda at the annual meeting of the Association of Southeast Asian Nations, held earlier this month in Phnom Penh. In fact, the real issue was the organization’s long-term survival. The summit produced the usual pledges of action on key issues, but the world is changing in ways that make mere rhetorical promises increasingly costly. ASEAN member states must make commitments — and deliver on them — if the institution is to have a future.
Two issues are critical for ASEAN member states, and both were on the agenda this time. The first is terrorism. To their credit, several ASEAN governments have acknowledged that international terrorism is a genuine threat to their national security. The bombings in Bali, Indonesia and Thailand in recent weeks should have awakened the two holdout governments to the fact that no nation is immune to this scourge. There is ample evidence that terrorist groups have created networks throughout the region; the U.S. claim that Southeast Asia is “the second front” in the war against terror is no exaggeration.
The leaders assembled in Phnom Penh pledged greater cooperation and promised not to be intimidated. Cambodia, Indonesia, the Philippines and Malaysia had already agreed to an antiterrorism pact that focuses on sharing intelligence, resources and personnel to fight terrorism. Thailand signed up at the Phnom Penh meeting. Brunei has said that it too will join, while Singapore, perhaps the country most concerned by the terrorist threat, has several bilateral agreements with ASEAN states. To send a message that they would not be cowed by terrorists, the leaders decided to hold their 2003 summit in Bali, where a bombing last month killed almost 200 people. It will take more than that show of courage to meet and defeat this deadly threat. It is not just ASEAN’s credibility that is on the line, but the very survival of some of its member governments.
The second threat is economic — the rise of China. China’s emergence as an economic giant could swamp the Southeast Asian economies. Since China’s “open door” policy was initiated in the early 1990s, the mainland has absorbed almost 80 percent of all foreign direct investment in Asia — funds that had been fueling ASEAN’s growth and prosperity. China’s low-cost labor, vast internal markets and rapidly rising industrial sophistication will undermine Southeast Asian production. ASEAN’s concern about the economic threat posed by China is no less than Japan’s.
In response to this challenge, ASEAN and China signed a framework for talks on an ASEAN-China free-trade area that would have a combined market of 1.8 billion people and a gross domestic product of at least $2 trillion. The agreement is designed to open Chinese markets to ASEAN’s goods. It is estimated that a free-trade agreement would increase exports on both sides by 50 percent and add 1 and 0.3 percentage points respectively to annual economic growth in ASEAN countries and China.
The framework is just that: the broad outline of a deal. The parties may not come to an agreement by the 2010 deadline. Yet even if they do, ASEAN will still live in China’s shadow, influenced by an emerging superpower that has more than twice ASEAN’s population and several times its economic strength. Some hope to expand the free-trade agreement to include Japan and South Korea, a move that would add two counterweights to China. But South Korea is too small, and Japan has not shown the ability to match China’s diplomatic overtures.
When Chinese Premier Zhu Rongji proposed a study of a free-trade area that would include the two Northeast Asian nations, Prime Minister Junichiro Koizumi was reportedly taken by surprise and could only say the project could be considered in the long term. And even though Tokyo knew that Beijing would propose a deal with ASEAN, the best response it could muster was agreement to create “as soon as possible” an “economic partnership” with ASEAN nations over the next decade that would include “elements of a possible free-trade area.”
China and ASEAN also agreed to an accord that aims at avoiding armed conflicts over contested territory in the South China Sea. Southeast Asian governments tried for three years to draft a binding code of conduct, but abandoned that effort earlier this year and settled for a nonbinding political declaration instead.
In both the China-ASEAN free-trade agreement and the South China Sea agreement, ASEAN’s biggest challenge was not dealing with China, but getting its fractious members to speak with one voice. Dealing with China will always be difficult, but ASEAN’s only hope for success is coming up with — and sticking to — a unified stance. If ASEAN cannot coalesce into that united group, then it will become irrelevant. While that warning is not new, it has become more urgent.
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