POLITICAL-ECONOMY POLITICAL-ECONOMY OF ASEAN AND APTOF ASEAN AND APT

Presented by:Presented by:Dr. Alexander C. ChandraDr. Alexander C. Chandra

Institute for Global Justice (IGJ)Institute for Global Justice (IGJ)Jakarta, IndonesiaJakarta, Indonesia

Prepared for the Regional Conference on Prepared for the Regional Conference on Civil-Society Engagement Civil-Society Engagement in ASEANin ASEAN

Bangkok, 3-5 October 2005Bangkok, 3-5 October 2005

Aims for PresentationAims for Presentation

An analysis of the political-economy An analysis of the political-economy of ASEAN and the ASEAN Plus Three of ASEAN and the ASEAN Plus Three (APT);(APT);

An analysis of the relationship An analysis of the relationship between ASEAN and the between ASEAN and the plus three plus three countries (China, Japan, and South countries (China, Japan, and South Korea)Korea)

Key QuestionKey Question

To what extent the co-operation To what extent the co-operation between ASEAN and the between ASEAN and the plus three plus three countries will grow?countries will grow?

What are the opportunities and What are the opportunities and challenges of APT for ASEAN?challenges of APT for ASEAN?

What are key concerns of Southeast What are key concerns of Southeast Asian civil-society groups about APT?Asian civil-society groups about APT?

What is APT?What is APT? Dialogue process that brings together Dialogue process that brings together

China, South Korea, Japan, and ASEAN that China, South Korea, Japan, and ASEAN that aimed at greater regional economic co-aimed at greater regional economic co-ordination (Robertson 2002); ordination (Robertson 2002);

The embryo of an East Asian regional The embryo of an East Asian regional organisation (Soesastro 2001); organisation (Soesastro 2001);

Or, the latest manifestation of the Or, the latest manifestation of the evolutionary development of East Asian evolutionary development of East Asian regional co-operation (Stubbs 2002: 441);regional co-operation (Stubbs 2002: 441);

In essence, APT is the manifestation of an In essence, APT is the manifestation of an increased realisation of the need to increased realisation of the need to expand co-operation between ASEAN and expand co-operation between ASEAN and the three Northeast Asian countries.the three Northeast Asian countries.

Background of APTBackground of APT

Dr. Mahathir’s East Asian Economic Group Dr. Mahathir’s East Asian Economic Group (EAEG);(EAEG);

EAEG as an exclusive economic bloc within EAEG as an exclusive economic bloc within APEC;APEC;

Rejection from APEC developed member Rejection from APEC developed member countries (i.e. US) because EAEG undermines countries (i.e. US) because EAEG undermines their economic interests in East Asia;their economic interests in East Asia;

Rejection from some Asian countries (i.e. Japan Rejection from some Asian countries (i.e. Japan and Indonesia);and Indonesia);

Indonesia suggested EAEG to be transformed Indonesia suggested EAEG to be transformed into EAEC within APECinto EAEC within APEC

Key Elements in the Making of Key Elements in the Making of APTAPT

The involvement of the The involvement of the plus three plus three countries in the Asia-Europe Meeting countries in the Asia-Europe Meeting (ASEM) – Allowed leaders from ASEAN, (ASEM) – Allowed leaders from ASEAN, Japan, China, and S. Korea meet on Japan, China, and S. Korea meet on regular basis;regular basis;

US fear US fear towards the possible creation of a towards the possible creation of a trade bloc amongst the East Asian trade bloc amongst the East Asian countries began to subside;countries began to subside;

The emergence of the Asian crisis of 1997 The emergence of the Asian crisis of 1997

Concrete Moves towards Concrete Moves towards APTAPT

Second informal ASEAN Summit 1997;Second informal ASEAN Summit 1997; Kim Dae Jung proposed the Kim Dae Jung proposed the

establishment of East Asian Vision establishment of East Asian Vision Group (EAVG) & East Asia Study Group Group (EAVG) & East Asia Study Group (EASG);(EASG);

Early form of co-operation include Early form of co-operation include financial co-operation (ASEAN Swap financial co-operation (ASEAN Swap Arrangement – ASA) in 2000Arrangement – ASA) in 2000

EAVG & EASG Report 2001EAVG & EASG Report 2001

Three key areas of co-operation: Three key areas of co-operation: economy, finance, and institution;economy, finance, and institution;

The establishment of an East Asia The establishment of an East Asia Free Trade Area (EAFTA) and East Free Trade Area (EAFTA) and East Asia Investment Area (EAIA);Asia Investment Area (EAIA);

The establishment of East Asian The establishment of East Asian Monetary Fund (EAMF)Monetary Fund (EAMF)

Rationales for APTRationales for APT

Alatas (2001) & Sang Ho (2001):Alatas (2001) & Sang Ho (2001): Increase economic interdependence Increase economic interdependence

and complementarity;and complementarity; Historical intention to strengthen co-Historical intention to strengthen co-

operation in the East Asian region operation in the East Asian region (i.e. PEC, ADB, ASPAC, etc.);(i.e. PEC, ADB, ASPAC, etc.);

Challenges from globalisationChallenges from globalisation

Opportunities of APT for ASEANOpportunities of APT for ASEAN

ASEAN’s economic objectives:ASEAN’s economic objectives:

Market access in Northeast Asian Market access in Northeast Asian countries & to secure more channels countries & to secure more channels to obtain financial assistance and to obtain financial assistance and development aiddevelopment aid

Neo-liberal policy-makers in Southeast Neo-liberal policy-makers in Southeast Asia seek greater investment from Asia seek greater investment from China, Japan, and South KoreaChina, Japan, and South Korea

Opportunities of APT for ASEANOpportunities of APT for ASEAN

Security objectives:Security objectives: Potential bulwark against possible Potential bulwark against possible

hostile behaviour from China;hostile behaviour from China; Lessening US dominance over the Lessening US dominance over the

security concerns of ASEAN member security concerns of ASEAN member countries;countries;

Pan-Asian nationalism and a Pan-Asian nationalism and a reactionary defensive / offensive reactionary defensive / offensive mechanism mechanism vis-à-vis vis-à-vis major powers and major powers and multilateral institutionsmultilateral institutions

Challenges of APT for Challenges of APT for ASEANASEAN

How ASEAN could proceed with APT? How ASEAN could proceed with APT? (Division: the strengthening the (Division: the strengthening the ASEAN Secretariat vs. establishment ASEAN Secretariat vs. establishment of APT Secretariat);of APT Secretariat);

APT leadership?APT leadership? Bilateral Free Trade Agreements Bilateral Free Trade Agreements

(BFTAs)?(BFTAs)?

How to proceed with APT?How to proceed with APT?

Division within ASEAN;Division within ASEAN; Malaysia & Philippines: establish APT Malaysia & Philippines: establish APT

Secretariat in Kuala Lumpur;Secretariat in Kuala Lumpur; Thailand, Indonesia, & Singapore: Thailand, Indonesia, & Singapore:

strengthening the ASEAN Secretariat strengthening the ASEAN Secretariat so that ASEAN could manage the APT so that ASEAN could manage the APT process betterprocess better

APT Leadership: Northeast APT Leadership: Northeast AsiaAsia

Japan Vs. ChinaJapan Vs. China Japan has been ambivalent:Japan has been ambivalent:

1. Prefer Asia-Pacific rather than East 1. Prefer Asia-Pacific rather than East Asia regionalism (US-centred foreign Asia regionalism (US-centred foreign policy)policy)

2. Japan’s Focus on multilateralism2. Japan’s Focus on multilateralism China desperate to lead East Asia China desperate to lead East Asia

(EHP in ACFTA);(EHP in ACFTA);

APT Leadership: ASEAN?APT Leadership: ASEAN?

APT, as suggested by its name, has been APT, as suggested by its name, has been driven by ASEAN since beginning driven by ASEAN since beginning (Soesastro 2001);(Soesastro 2001);

APT meetings have been conducted in APT meetings have been conducted in parallel with ASEAN meetings;parallel with ASEAN meetings;

ASEAN asked the ASEAN asked the plus three plus three countries to countries to participate in ASEM;participate in ASEM;

ASEAN has the potential to mediate ASEAN has the potential to mediate conflicts amongst China, Japan, and South conflicts amongst China, Japan, and South KoreaKorea

Bilateral Free Trade Agreements Bilateral Free Trade Agreements (BFTAs) as Strategy to Achieve (BFTAs) as Strategy to Achieve

APT?APT?

BFTAs have been used as key strategies to BFTAs have been used as key strategies to strengthen APT process;strengthen APT process;

Deep mistrust, suspicions, and the absence Deep mistrust, suspicions, and the absence of regionalism in Northeast Asia make the of regionalism in Northeast Asia make the final objectives of APT difficult to achieve;final objectives of APT difficult to achieve;

BFTAs detrimental to ASEAN’s cohesion BFTAs detrimental to ASEAN’s cohesion (Japan’s strategy of (Japan’s strategy of divide and conquerdivide and conquer););

The limited participation of civil-society The limited participation of civil-society groups in these BFTAsgroups in these BFTAs

Key Concerns from Civil Key Concerns from Civil Society Groups in Southeast Society Groups in Southeast

Asia (I)Asia (I) The actual ability of ASEAN to lead The actual ability of ASEAN to lead

APT?APT? The ability of the The ability of the plus three plus three countries countries

to accept new set of values and to accept new set of values and idealism promoted by the Southeast idealism promoted by the Southeast Asian civil society groups in the Asian civil society groups in the making of ASEAN Community;making of ASEAN Community;

The participation of civil-society The participation of civil-society groups in the APT process?groups in the APT process?

Key Concerns from Civil Key Concerns from Civil Society Groups in Southeast Society Groups in Southeast

Asia (II)Asia (II) The ability of ASEAN to maintain its The ability of ASEAN to maintain its

cohesion in light of APT and BFTA cohesion in light of APT and BFTA strategies;strategies;

The limited professional staffs at the The limited professional staffs at the ASEAN Secretariat? – the need for ASEAN Secretariat? – the need for extra-bureaucracy agency?extra-bureaucracy agency?

The use of neo-liberal approach as a The use of neo-liberal approach as a sole mechanism to promote sole mechanism to promote regionalism in Southeast Asia regionalism in Southeast Asia

ConclusionConclusion

It is undeniable that APT offers a host of It is undeniable that APT offers a host of opportunities for the states involved in it.;opportunities for the states involved in it.;

APT member countries should, therefore, APT member countries should, therefore, address those aforementioned issues if address those aforementioned issues if they wish to make substantial and they wish to make substantial and justified progress towards the justified progress towards the strengthening of East Asian regionalism.strengthening of East Asian regionalism.

THE ENDTHE END

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THANK YOUTHANK YOU