The Political Economy of Regionalism in East Asia

The Political Economy of Regionalism in East Asia Integrative ExpLanation for Dynamics and Challenges

Hidetaka Yoshimatsu

Graduate School of Asia Pacific Studies Ritsumeikan Asia Pacific University, japan

Political Political

Political Challenges

* ©Hidetaka Yoshimatsu 2008 Softcover reprint of the hardcover 1st edition 2008 978-0-230-51634-2 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

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PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin's Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries.

ISBN 978-1-349-35444-3 ISBN 978-0-230-58419-8 (eBook) DOI 10.1057/9780230584198

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Library of Congress Cataloging-in-Publication Data

Yoshimatsu, Hidetaka. The political economy of regionalism in East Asia : integrative

explanation for dynamics and challenges I Hidetaka Yoshimatsu. p. em.

Includes bibliographical references and index.

1. East Asia-Economic integration. 2. Regionalism-East Asia. I. Title.

HC460.5Y66 2008 337.1'5-dc22 2008011818

10 9 8 7 6 5 4 3 2 1 17 16 15 14 13 12 11 10 09 08

Transferred to Digital Printing 20 II

Contents

Preface

Tables and Figure

List of Abbreviations

Introduction

vii

ix

x

1

1 Explaining Regionalism in East Asia: Theoretical Perspectives 6

2 State Sovereignty, Collective Action Problems and Regional Integration in Southeast Asia 24

3 Business Interests and Regional Integration in Southeast Asia: A Comparison with Europe 44

4 Intergovernmentalism and Emerging Regionalism in Northeast Asia 61

5 Business Involvement in Regional Cooperation in Northeast Asia 82

6 ASEAN's Manipulation of Balancing and Entangling Strategy in East Asia 105

7 China's Regional Economic Diplomacy in Pursuit of Domestic and Global Interests 127

8 Japan's East Asian Diplomacy: Patchwork Realism and Na'ive Liberalism 147

9 Conclusions 169

Notes 181

References 195

Index 209

v

Preface

Challenge and opportunity are two keywords characterising East Asia in the new millennium. The region as a whole has undergone a dynamic economic growth process, and nations that are integrated into this process have achieved steady economic growth, elevating people's liv­ing standards. The region is also facing formidable challenges, such as China's astounding ascendancy, underdeveloped social conditions in the Indochinese countries, and global market liberalisation trends. The sound development of regionalism becomes increasingly important in expanding opportunities for further prosperity and responding skilfully to the challenges.

East Asian regionalism in the new millennium is uncertain. While the ASEAN+3 has developed a feasible regional forum, ASEAN members seek to advance ASEAN+1 (China, Japan, South Korea, and so on). The East Asia summit, another vehicle for regionalism in East Asia, will have increasing influence on the evolution of regional consolidation. Further­more, global market forces encourage regional states to search for tighter economic linkages by forming free-trade agreements. These complicated dimensions reflect the geopolitical calculations of the states and growing economic power drawn from the global market. Regionalism in East Asia is in the crossover point of politics and economics.

This book seeks to examine challenges and dynamics of regional eco­nomic affairs in East Asia by articulating concrete interactions among governmental and business actors on major economic policies and rela­tions. It also intends to make some theoretical contributions by linking practical moves towards regional consolidation to key perspectives in major international relations theories. Different versions of several chap­ters in this book have appeared in academic journals: 'From Distrust to Mutual Interests? Emerging Cooperation in Northeast Asia', East Asia: An International Quarterly, 22 (4), 200S; 'Collective Action Problems and Regional Integration in ASEAN', Contemporary Southeast Asia, 28 (1), 2006; and 'Regional Integration and Business Interests: A Comparative Study of Europe and Southeast Asia', European Journal of East Asian Studies, 6 (2), 2007. Permission to use these materials is gratefully acknowledged to Springer Science and Business Media, Institute of Southeast Asian Stud­ies, Singapore (http://bookshop.iseas.edu.sg), and Koninklijke Brill NV.

vii

viii Preface

It is a pleasure to acknowledge my debt to those who have pro­vided assistance in the completion of this volume. In the process of preparing for this book, many scholars have become a source of inspi­ration and support. I am particularly thankful to John Ravenhill, Mark Beeson, Chris Hughes, Wyn Grant, Susumu Yamagami, Koichi Miyoshi, Patrick Ziltener and Hiro Katsumata. I am also grateful to postgraduate students at Graduate School of Asia Pacific Studies, Ritsumeikan Asia Pacific University. Discussions with these students helped me sharpen my ideas about regionalism in East Asia. I also wish to express my deep gratitude to three organisations. The first is the Centre for the Study of Globalization and Regionalisation, University of Warwick in Britain. The first idea of this book project floated into my mind when I conducted research on regionalism as a visiting fellow there. The second is the Insti­tute of Defence and Strategic Studies (currently, S. Rajaratnam School of International Studies), Nanyang Technological University in Singapore. I was able to undertake intensive surveys on regional cooperation and integration in Southeast Asia and East Asia when I was affiliated to this institute. The third is my current affiliation, the Graduate School of Asia Pacific Studies, Ritsumeikan Asia Pacific University (APU). Although APU is a relatively small university located in a local city in southwestern Japan, its internationally oriented academic environment has provided me with valuable intellectual stimulus through participation in interna­tional conferences and daily discussions with researchers. The university also offered financial support for conducting fieldwork for this book.

Finally, my gratitude goes to my wife, Mutsumi, and our son, Satoshi, for their willing sacrifices and continuous support. Without their understanding and encouragement this project could not have been possible.

Hidetaka Yoshimatsu January 1998

Tables and Figure

TabLes

1.1 Trade among ASEANS, China and Japan 1.2 Major Economic Indicators in China 2.1 Population, GDP, and Life Expectancy in ASEAN 4.1 Primary Energy Consumption in China, Japan

and South Korea 5.1 The Development of the Trilateral Business Forum 5.2 Major Actors Involved in the Northeast Asia ass

Promotion Forum 6.1 ASEAN-6 Contributions to CLMV 7.1 FDI Inflow in China and ASEAN-S 8.1 Japan's Commitments to FTAs 8.2 The Trade Liberalisation Ratio in Japan's FTAs

Figure

1.1 Intra-regional Trade in East ASia, EU2S and NAFTA

ix

12 21 39

77 87

96 123 141 153 ISS

11

List of Abbreviations

ABIS ABP ACCSQ

ACFTA ACMECS

ADB AEC AEM AFTA AlA AJCEP AMAF AMBDC AMM APEC ARF ASEAN ASEAN+3 ASEAN-BAC ASEAN-CCI AS EM BSA CABC CAB IS CAREC CCP CCPIT CEOs CEPEA

CEPT CISA CLMV CLV

ASEAN Business and Investment Summit Asia Broadband Programme ASEAN Consultative Committee on Standards and Quality ASEAN-China Free Trade Area Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy Asian Development Bank ASEAN Economic Community ASEAN Economic Ministers ASEAN Free Trade Area ASEAN Investment Area ASEAN-Japan Comprehensive Economic Partnership ASEAN Ministers on Agriculture and Forestry ASEAN Mekong Basin Development Cooperation ASEAN Ministerial Meeting Asia-Pacific Economic Cooperation ASEAN Regional Forum Association of Southeast Asian Nations ASEAN Plus Three ASEAN Business Advisory Council ASEAN Chamber of Commerce and Industry ASia-Europe Meeting bilateral swap agreement China-ASEAN Business Council China-ASEAN Business and Investment Summit Central Asia Regional Economic Cooperation Chinese Communist Party China Council for the Promotion of International Trade chief executive officers Comprehensive Economic Partnership Agreement in East Asia Common Effective Preferential Tariff China Iron and Steel Association Cambodia, Laos, Myanmar and Vietnam Cambodia, Laos and Vietnam

x

List of Abbreviations xi

CMI Chiang Mai Initiative CSIA Chinese Software Industry Association DSM dispute settlement mechanism EAEC East Asian Economic Caucus EAERR East Asia Emergency Rice Reserve EAS East Asia Summit EC EHP EMU EPA ERT EU FDI FKI FKII PTA GATT GDP GMS IAI ICT IMF IPA IR IT JBF JETRO JFPR JICA JISA JISF JSDF KIEP KIPA LDP MAFF MET! MFN MIC MIl MOFA

European Community Early Harvest Programme Economic and Monetary Union Economic Partnership Agreement European Round Table of Industrialists European Union foreign direct investment Federation of Korean Industries Federation of Korean Information Industries free trade agreement General Agreement on Tariffs and Trade gross domestic product Greater Mekong Sub-region Initiative for ASEAN Integration information and communication technology International Monetary Fund Information-Technology Promotion Agency international relations information technology Japan Business Federation Japan External Trade Organisation Japan Fund for Poverty Reduction Japan International Cooperation Agency Japan Information Technology Services Industry Association Japan Iron and Steel Federation Japan Social Development Fund Korea Institute for International Economic Policy Korea IT Industry Promotion Agency Liberal Democratic Party Ministry of Agriculture, Forestry and Fisheries Ministry of Economy, Trade and Industry most favoured nation Ministry of Internal Affairs and Communications Ministry of Information Industry Ministry of Foreign Affairs

xii List of Abbreviations

MOU MRAs MRC NAFTA NEAT NGOs ODA OECD OSS R&D SCO SEOM SKRL SMEs TELMIN TEMM TMRR UNICE

VAP WGIC WTO

memorandum of understanding mutual recognition agreements Mekong River Commission North American Free Trade Agreement Network of East Asian Think-tanks non-governmental organisations official development assistance Organisation for Economic Cooperation and Development open source software research and development Shanghai Cooperation Organisation senior economic officials meeting Singapore-Kunming Rail Link small- and medium-sized enterprises ASEAN Telecommunications and IT Ministers' Meeting Tripartite Environment Ministers' Meeting Technical Meeting on Rice Reserve Union of Industrial and Employers' Confederations

of Europe Vientiane Action Programme Working Group on Industrial Cooperation World Trade Organisation