POLITICAL-ECONOMY OF ASEAN AND APT Presented by: Dr. Alexander C. Chandra Institute for Global Justice (IGJ) Jakarta, Indonesia Prepared for the Regional Conference on Civil-Society Engagement in ASEAN Bangkok, 3-5 October 2005

Aims for Presentation An analysis of the political-economy of ASEAN and the ASEAN Plus Three (APT); An analysis of the political-economy of ASEAN and the ASEAN Plus Three (APT); An analysis of the relationship between ASEAN and the plus three countries (China, Japan, and South Korea) An analysis of the relationship between ASEAN and the plus three countries (China, Japan, and South Korea)

Key Question To what extent the co-operation between ASEAN and the plus three countries will grow? To what extent the co-operation between ASEAN and the plus three countries will grow? What are the opportunities and challenges of APT for ASEAN? What are the opportunities and challenges of APT for ASEAN? What are key concerns of Southeast Asian civil-society groups about APT? What are key concerns of Southeast Asian civil-society groups about APT?

What is APT? Dialogue process that brings together China, South Korea, Japan, and ASEAN that aimed at greater regional economic co-ordination (Robertson 2002); Dialogue process that brings together China, South Korea, Japan, and ASEAN that aimed at greater regional economic co-ordination (Robertson 2002); The embryo of an East Asian regional organisation (Soesastro 2001); The embryo of an East Asian regional organisation (Soesastro 2001); Or, the latest manifestation of the evolutionary development of East Asian regional co-operation (Stubbs 2002: 441); Or, the latest manifestation of the evolutionary development of East Asian regional co-operation (Stubbs 2002: 441); In essence, APT is the manifestation of an increased realisation of the need to expand co- operation between ASEAN and the three Northeast Asian countries. In essence, APT is the manifestation of an increased realisation of the need to expand co- operation between ASEAN and the three Northeast Asian countries.

Background of APT Dr. Mahathir’s East Asian Economic Group (EAEG); Dr. Mahathir’s East Asian Economic Group (EAEG); EAEG as an exclusive economic bloc within APEC; EAEG as an exclusive economic bloc within APEC; Rejection from APEC developed member countries (i.e. US) because EAEG undermines their economic interests in East Asia; Rejection from APEC developed member countries (i.e. US) because EAEG undermines their economic interests in East Asia; Rejection from some Asian countries (i.e. Japan and Indonesia); Rejection from some Asian countries (i.e. Japan and Indonesia); Indonesia suggested EAEG to be transformed into EAEC within APEC Indonesia suggested EAEG to be transformed into EAEC within APEC

Key Elements in the Making of APT The involvement of the plus three countries in the Asia-Europe Meeting (ASEM) – Allowed leaders from ASEAN, Japan, China, and S. Korea meet on regular basis; The involvement of the plus three countries in the Asia-Europe Meeting (ASEM) – Allowed leaders from ASEAN, Japan, China, and S. Korea meet on regular basis; US fear towards the possible creation of a trade bloc amongst the East Asian countries began to subside; US fear towards the possible creation of a trade bloc amongst the East Asian countries began to subside; The emergence of the Asian crisis of 1997 The emergence of the Asian crisis of 1997

Concrete Moves towards APT Second informal ASEAN Summit 1997; Second informal ASEAN Summit 1997; Kim Dae Jung proposed the establishment of East Asian Vision Group (EAVG) & East Asia Study Group (EASG); Kim Dae Jung proposed the establishment of East Asian Vision Group (EAVG) & East Asia Study Group (EASG); Early form of co-operation include financial co-operation (ASEAN Swap Arrangement – ASA) in 2000 Early form of co-operation include financial co-operation (ASEAN Swap Arrangement – ASA) in 2000

EAVG & EASG Report 2001 Three key areas of co-operation: economy, finance, and institution; Three key areas of co-operation: economy, finance, and institution; The establishment of an East Asia Free Trade Area (EAFTA) and East Asia Investment Area (EAIA); The establishment of an East Asia Free Trade Area (EAFTA) and East Asia Investment Area (EAIA); The establishment of East Asian Monetary Fund (EAMF) The establishment of East Asian Monetary Fund (EAMF)

Rationales for APT Alatas (2001) & Sang Ho (2001): Increase economic interdependence and complementarity; Increase economic interdependence and complementarity; Historical intention to strengthen co- operation in the East Asian region (i.e. PEC, ADB, ASPAC, etc.); Historical intention to strengthen co- operation in the East Asian region (i.e. PEC, ADB, ASPAC, etc.); Challenges from globalisation Challenges from globalisation

Opportunities of APT for ASEAN ASEAN’s economic objectives: Market access in Northeast Asian countries & to secure more channels to obtain financial assistance and development aid Market access in Northeast Asian countries & to secure more channels to obtain financial assistance and development aid Neo-liberal policy-makers in Southeast Asia seek greater investment from China, Japan, and South Korea Neo-liberal policy-makers in Southeast Asia seek greater investment from China, Japan, and South Korea

Opportunities of APT for ASEAN Security objectives: Potential bulwark against possible hostile behaviour from China; Potential bulwark against possible hostile behaviour from China; Lessening US dominance over the security concerns of ASEAN member countries; Lessening US dominance over the security concerns of ASEAN member countries; Pan-Asian nationalism and a reactionary defensive / offensive mechanism vis-à-vis major powers and multilateral institutions Pan-Asian nationalism and a reactionary defensive / offensive mechanism vis-à-vis major powers and multilateral institutions

Challenges of APT for ASEAN How ASEAN could proceed with APT? (Division: the strengthening the ASEAN Secretariat vs. establishment of APT Secretariat); How ASEAN could proceed with APT? (Division: the strengthening the ASEAN Secretariat vs. establishment of APT Secretariat); APT leadership? APT leadership? Bilateral Free Trade Agreements (BFTAs)? Bilateral Free Trade Agreements (BFTAs)?

How to proceed with APT? Division within ASEAN; Division within ASEAN; Malaysia & Philippines: establish APT Secretariat in Kuala Lumpur; Malaysia & Philippines: establish APT Secretariat in Kuala Lumpur; Thailand, Indonesia, & Singapore: strengthening the ASEAN Secretariat so that ASEAN could manage the APT process better Thailand, Indonesia, & Singapore: strengthening the ASEAN Secretariat so that ASEAN could manage the APT process better

APT Leadership: Northeast Asia Japan Vs. China Japan has been ambivalent: Japan has been ambivalent: 1. Prefer Asia-Pacific rather than East Asia regionalism (US-centred foreign policy) 2. Japan’s Focus on multilateralism China desperate to lead East Asia (EHP in ACFTA); China desperate to lead East Asia (EHP in ACFTA);

APT Leadership: ASEAN? APT, as suggested by its name, has been driven by ASEAN since beginning (Soesastro 2001); APT, as suggested by its name, has been driven by ASEAN since beginning (Soesastro 2001); APT meetings have been conducted in parallel with ASEAN meetings; APT meetings have been conducted in parallel with ASEAN meetings; ASEAN asked the plus three countries to participate in ASEM; ASEAN asked the plus three countries to participate in ASEM; ASEAN has the potential to mediate conflicts amongst China, Japan, and South Korea ASEAN has the potential to mediate conflicts amongst China, Japan, and South Korea

Bilateral Free Trade Agreements (BFTAs) as Strategy to Achieve APT? BFTAs have been used as key strategies to strengthen APT process; BFTAs have been used as key strategies to strengthen APT process; Deep mistrust, suspicions, and the absence of regionalism in Northeast Asia make the final objectives of APT difficult to achieve; Deep mistrust, suspicions, and the absence of regionalism in Northeast Asia make the final objectives of APT difficult to achieve; BFTAs detrimental to ASEAN’s cohesion (Japan’s strategy of divide and conquer); BFTAs detrimental to ASEAN’s cohesion (Japan’s strategy of divide and conquer); The limited participation of civil-society groups in these BFTAs The limited participation of civil-society groups in these BFTAs

Key Concerns from Civil Society Groups in Southeast Asia (I) The actual ability of ASEAN to lead APT? The actual ability of ASEAN to lead APT? The ability of the plus three countries to accept new set of values and idealism promoted by the Southeast Asian civil society groups in the making of ASEAN Community; The ability of the plus three countries to accept new set of values and idealism promoted by the Southeast Asian civil society groups in the making of ASEAN Community; The participation of civil-society groups in the APT process? The participation of civil-society groups in the APT process?

Key Concerns from Civil Society Groups in Southeast Asia (II) The ability of ASEAN to maintain its cohesion in light of APT and BFTA strategies; The ability of ASEAN to maintain its cohesion in light of APT and BFTA strategies; The limited professional staffs at the ASEAN Secretariat? – the need for extra- bureaucracy agency? The limited professional staffs at the ASEAN Secretariat? – the need for extra- bureaucracy agency? The use of neo-liberal approach as a sole mechanism to promote regionalism in Southeast Asia The use of neo-liberal approach as a sole mechanism to promote regionalism in Southeast Asia

Conclusion It is undeniable that APT offers a host of opportunities for the states involved in it.; It is undeniable that APT offers a host of opportunities for the states involved in it.; APT member countries should, therefore, address those aforementioned issues if they wish to make substantial and justified progress towards the strengthening of East Asian regionalism. APT member countries should, therefore, address those aforementioned issues if they wish to make substantial and justified progress towards the strengthening of East Asian regionalism.

THE END & THANK YOU