Historians may well look back at this week’s summit of the 10-member Association of Southeast Asian Nations and call it the first real move toward creating a regional economic group that unites all of Asia. It pushed the political agenda forward as well, signaling a shift in the ASEAN-Plus-Three (Japan, China and South Korea) get-together that follows the summit, and inaugurated new relations with ASEAN’s other dialogue partners.
The organization’s unwillingness, however, to fully confront problems among its members, most notably in Myanmar and Thailand, is a reminder that ASEAN’s operating principles may yet undermine its ambitious plans.
The highlight of this week’s meeting was the signing of a China-ASEAN trade accord that calls for the elimination of tariffs on a range of agricultural and industrial goods by 2010 — the first concrete step toward the China-ASEAN free-trade agreement (FTA). The limits of the deal — the absence of a dispute settlement or an enforcement mechanism, as well as the restrictions on goods and the omission of services — means that all will depend on the implementation of its provisions. Historically, that is a problem: Despite previous trade deals, nontariff barriers continue to plague regional economic relations.
Nevertheless, the trade accord consolidates China’s position as the nation leading Asian economic cooperation and development. Beijing’s signing of a declaration on a code of conduct within the region is another important step that helps diffuse concern about China’s long-term intentions.
Just as important is the impetus the deal gives ASEAN to accelerate its own plans for integration. ASEAN leaders agreed to move up by three years — to 2007 — the deadline for eliminating tariffs on intra-ASEAN trade in 11 major product groups. It is estimated that these cuts will affect one-third of the $720 billion in trade among the group’s members. Eliminating barriers among ASEAN nations is crucial if Southeast Asia is to stay competitive with China. Without those tariff cuts, trade will increasingly move between individual nations to China. Creating a free market within ASEAN will spur trade within the region, and the region’s own growth.
Conscious of the region’s growing reliance on the Chinese market, ASEAN has been reaching out to other dialogue partners too. At this week’s meeting, the prime ministers of Australia and New Zealand made historic appearances, even though hopes for a leap in relations with Australia were dampened by Canberra’s refusal to join ASEAN’s Treaty of Amity and Cooperation. The group also signed a partnership agreement with India, which could boost trade between the two from the current $13 billion to $30 billion by 2007.
Japan was another winner at the meeting. Japan and ASEAN issued a joint statement calling for negotiations on a comprehensive economic partnership to begin next April and conclude within two years. This partnership should result in a FTA by 2012. In another statement, the two restated their resolve to prevent and fight terrorism. ASEAN also endorsed Japan’s bid for a permanent seat on the U.N. Security Council.
ASEAN has now agreed to conclude FTAs with all three of its Northeast Asian trade partners, although each has a different target date. These trade deals are designed to create a trade bloc that rivals the European Union and North American FTA. They will provide a huge boost to the region’s economic prospects, spurring growth and sharing prosperity. ASEAN’s efforts to diversify its trade relationships also serve a strategic purpose: They ensure that Southeast Asia is not excessively reliant on China. Japan, India, and Australia and New Zealand all provide strategic counterweights to China.
This balancing act also allows ASEAN to maintain the initiative in its relations with other nations. Ultimately the success of that effort depends on ASEAN’s ability to remain unified and to act when needed. Unfortunately, those two imperatives can clash, as was evident in this week’s meeting. ASEAN’s reluctance to interfere in the domestic politics of its member nations — in this case, Myanmar’s standoff with a prodemocracy opposition and Thailand’s approach to the violence in the south — makes it look weak and ineffectual, and it alienates other governments with which it must work. ASEAN is overcoming this aversion to such moves, although at a glacial pace.
ASEAN’s readiness to tackle those problems is essential if the organization is to take its place on the global stage. ASEAN’s success will provide the foundation of Asia’s own rise as a political power to rival the Americas or Europe. This week’s summit makes that future possible; ASEAN’s actions can make it happen.
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