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GO 357 The Political Economy of Regionalism

GO 357 The Political Economy of Regionalism. Walter Hatch Colby College Asia or Asia-Pacific. Is this Region called “Asia?”. A “racially” defined, geographically finite space. “Asia”. Northeast Asia (Tigers, Dragons) Japan ROK (South Korea) Greater China PRC (Mainland China)

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GO 357 The Political Economy of Regionalism

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  1. GO 357The Political Economy of Regionalism Walter Hatch Colby College Asia or Asia-Pacific

  2. Is this Region called “Asia?” A “racially” defined, geographically finite space

  3. “Asia” • Northeast Asia (Tigers, Dragons) • Japan • ROK (South Korea) • Greater China • PRC (Mainland China) • Hong Kong SAR • ROC (Taiwan) • Singapore (da hub) • Southeast Asia (New Tigers, Little Dragons) • Malaysia and Brunei • Indonesia • Thailand • The Philippines • Indochina (Vietnam, Cambodia, Laos) • Myanmar

  4. Or is the region called “Asia-Pacific?” A “racially” mixed, geographically expansive space

  5. “Asia-Pacific”(= Asia + some) • North America • Latin America • Oceania • Australia • New Zealand • Russia

  6. And what about India?

  7. Two Questions • What drives the high level of regionalization? • What causes the low level of regionalism?

  8. High Regionalization

  9. Asia’s Intra-regional Exports(1999-2005) 2005 2003 2001 1999

  10. Asian Exports (by destination) 1990 Other Europe Asia North America Source: WTO

  11. Asian Exports (by destination) 2005 Other Europe Asia North America Source: WTO

  12. Intra-regional Trade (% of total)

  13. FDI to Asia

  14. FDI to China and India (1982-2003)

  15. Regional Institutions • ASEAN • APEC • EAEG/EAEC • ASEAN + 3 • East Asian Summit

  16. ASEAN

  17. ASEAN: Basics • Created in 1967 as pro-capitalist (anti-communist) trade bloc • 10 member states • Population of about 559 million • Combined gross domestic product of US$884 billion

  18. ASEAN: Organization • Secretariat in Jakarta. Headed by secretary-general, who serves a five-year term. Supported by small staff (about 40). • Key work is done in annual summit meetings. The “ASEAN Way” works by consensus, and carefully protects national sovereignty. • Treaty of Amity and Cooperation in Southeast Asia (1976) spells out “non-interference in internal affairs of members” as one of the founding principles of ASEAN.

  19. ASEAN: Real Integration • ASEAN Free Trade Area (AFTA), 1992 • CEPT of 5% by 2008 • ASEAN Vision 2020 • Results: • exports among ASEAN countries grew from US$43.26 billion in 1993 to almost US$80 billion in 1996, an average yearly growth rate of 28.3 percent. • share of intra-regional trade rose from 20 percent to almost 25 percent • Pace slowed, though, in 1998

  20. APEC

  21. APEC: Basics • Created by Japan and Australia in 1989 • Invigorated by Clinton in 1993 • A meta-region • 21 countries • Russia and Peru? • Population of over 2.6 billion • Combined GDP of more than $20 trillion • Members account for nearly 47 percent of world trade.

  22. APEC: Organization • Secretariat, located in Singapore, established in 1993 • 21 officials seconded by member economies for fixed terms • Small permanent staff (about 30)

  23. APEC: Goals • “Bogor Declaration” (1994): achieve free and open trade and investment in the Asia-Pacific by 2010 for developed economies and 2020 for developing economies. • Three pillars • Trade and Investment Liberalization • Business Facilitation • Economic and Technical Cooperation

  24. APEC: Few achievements • Operates by consensus • Thus, nothing gets done • Conflicting ambitions • EVSL (1996) as example • Identified 15 sectors • Pared down to two: fisheries and forest products • Japan pulls out

  25. East Asia Economic Group • Former Malaysia PM Mahathir (1990) • “Asia for Asians” • No Oceania, no US • US opposition • Japanese reluctance • EAEG becomes EAEC (caucus)

  26. ASEAN + 3 • Japan, South Korea and China join ASEAN economic ministers at annual meetings • Asian Monetary Fund proposal (1997) • More US opposition • Chiang Mai Initiative for bilateral currency swaps • Asian bond program • Asian currency regime

  27. East Asian Summit • China’s idea • no US, please • ASEAN as core • India, please • And the Oceania-2 • 16 members • First summit in KL in 2005

  28. New Regionalism • Singapore gets antsy • Bilateral agreements • China emerges as new leader • FTA with ASEAN (2002) • Japan tries to catch up

  29. Bilateral FTAs

  30. More Bilateral FTAs

  31. WHY SO LITTLE “HARD” REGIONALISM?

  32. Possible Explanations • Nationalism • Legacy of colonialism • Illiberal states • Security externalities of interdependence • US role • Hub-and-spokes relationship • Divergent cultures • Divergent levels of development

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