Week 6: Regionalism in East Asia
Readings:
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Wan 2 , 5, and 11
Lim 2
Lecture notes
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Key Terms:
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The Association of Southeast Asian Nations[5] (ASEAN)
The ASEAN Free Trade Area (AFTA): is a trade bloc agreement by the
Association of Southeast Asian Nations supporting local manufacturing in all
ASEAN countries. The AFTA agreement was signed on 28 January 1992 in
Singapore. When the AFTA agreement was originally signed, ASEAN had six
members, namely, Brunei, Indonesia, Malaysia, Philippines, Singapore and
Thailand. Vietnam joined in 1995, Laos and Myanmar in 1997 and Cambodia
in 1999. AFTA now comprises the ten countries of ASEAN. All the four
latecomers were required to sign the AFTA agreement to join ASEAN, but
were given longer time frames in which to meet AFTA's tariff reduction
obligations.
The primary goals of AFTA seek to:
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Increase ASEAN's competitive edge as a production base in the world market
through the elimination, within ASEAN, of tariffs and non-tariff barriers;
and
Attract more foreign direct investment to ASEAN. The primary mechanism
for achieving such goals is the Common Effective Preferential Tariff scheme,
which established a phased schedule in 1992 with the goal to increase the
region’s competitive advantage as a production base geared for the world
market.
ASEAN Plus Three (APT) : ASEAN and the three Northeast Asian
states—China, Japan, and South Korea
(Map: APT)
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The Asia-Pacific Economic Cooperation (APEC)
Asia–Europe Meeting
Chiang Mai Initiative (CMI): a multilateral currency swap arrangement among the ten
members of the Association of Southeast Asian Nations (ASEAN), the People's Republic
of China (including Hong Kong), Japan, and South Korea. It draws from a foreign
exchange reserves pool worth US$120 billion and was launched on 24 March 2010. That
pool has been expanded to $240 billion in 2012. The initiative began as a series of
bilateral swap arrangements after the ASEAN Plus Three countries met on 6 May 2000 in
Chiang Mai, Thailand, at an annual meeting of the Asian Development Bank. After 1997
Asian Financial Crisis, member countries started this initiative to manage regional shortterm liquidity problems and to facilitate the work of other international financial
arrangements and organizations like International Monetary Fund.
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ADB vs. AIIB
Asian Development Bank (ADB)://
• Asian Development Bank (ADB) aims at improving the welfare of
the people in Asia and the Pacific, particularly the 1.9 billion who
live on less than $2 a day. Asia and the Pacific still remains home
to two thirds of the world poor.
• The ADB was modeled closely on the World Bank (WB), and has a similar
weighted voting system where votes are distributed in proportion with
members' capital subscriptions. As of 31 December 2016, Japan and
United States hold the largest proportion of shares at 15.607%. China
holds 6.444%, India holds 6.331%, and Australia holds 5.786%.
The Asian Infrastructure Investment Bank
(AIIB)
• The Asian Infrastructure Investment Bank (AIIB) is a
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multilateral development bank that aims to support the building
of infrastructure in the Asia-Pacific region.
The bank currently (2018) has 87 (as of June 30/2018) member
states from around the world. The bank started operation after
the agreement entered into force on 25 December 2015, after
ratifications were received from 10 member states holding a total
number of 50% of the initial subscriptions of the Authorized
Capital Stock. Major economies that are not members include
Japan, Mexico, Nigeria, and the United States.
The United Nations has addressed the launch of AIIB as having
potential for "scaling up financing for sustainable development"
for the concern of global economic governance. The capital of the
bank is $100 billion, equivalent to 2⁄3 of the capital of the Asian
Development Bank and about half that of the World Bank.
The bank was proposed by China in 2013 and the initiative was
launched at a ceremony in Beijing in October 2014. It received the
highest credit ratings from the three biggest rating agencies in the
world, and is seen as a potential rival to World Bank and IMF.
As of 30 June 2018, total approved membership of AIIB is 87
(Regional Members: 42, Non-Regional Members: 24, Prospective
Members: 21).
• The bank was proposed by China in 2013and the initiative launched at a
ceremony in Beijing in October 2014. The Articles of Agreement (AOA)
were signed by 50 PFMs on 29 June 2015, which become a party to the
agreement through ratification. As of July 2015, 1 state (Myanmar) has
ratified the agreement, formally becoming a founding member.
• AIIB is regarded by some as a rival for the IMF, the World Bank
and the Asian Development Bank (ADB), which are regarded as
dominated by developed countries like the United States. The
United Nations has addressed the launch of AIIB as "scaling up
financing for sustainable development” for the concern of Global
Economic Governance.
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'Open' Regionalism
in Asia:
A. Silk Road Economic "BELT " &
Maritime Silk "ROAD " : China (2014)
• The "one belt and one road" initiative (一带一路”正
改)
[Silk Road/ The Silk Road (Silk Route) ]
• China' s initiatives on the Silk Road Economic Belt and
Maritime Silk Road in the 21st Century. By promoting
the development of the Silk Road Economic Belt and the
21st Century Maritime Silk Road, China has injected a
strong impetus to the common development in Eurasia:
The great Silk Road revival
• There are several areas as well that suggest a more active
Chinese role in the region: the New Silk Road initiative,
the Infrastructure Bank (Asian Infrastructure Investment
Bank) and the BRICS Bank.
• The ancient Silk Road was opened by China. This
economic corridor, which covers both the Asia-Pacific
region and Europe, will realize a multi-dimensional
connection between nearly 60 countries and regions in the
area.
B. The Free Trade Area of the Asia
Pacific (FTAAP)
• China, leaders at the APEC Summit in Beijing (2014) have agreed to
start the process of the Free Trade Area of the Asia Pacific (FTAAP) a mega deal worth over US$2 trillion for 17 economies.
C. Trans-Pacific Partnership (TPP)
• The Trans-Pacific Partnership (TPP) is a proposed regional
regulatory and investment treaty. As of 2015 twelve countries
throughout the Asia-Pacific region have participated in negotiations
on the TPP: Australia, Brunei Darussalam, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, the United States,
and Vietnam.
• The TPP intended to enhance trade and investment among the
TPP partner countries, to promote innovation, economic growth
and development.
• The Trans-Pacific Partnership (TPP) is a defunct proposed trade
agreement between Australia, Brunei, Canada, Chile, Japan,
Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and
United States signed on 4 February 2016, which was not ratified as
required and did not take effect. After the United States withdrew its
signature, the agreement could not enter into force. The remaining
nations negotiated a new trade agreement called Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP), which
incorporates most of the provisions of the TPP.
• In January 2017, the United States withdrew from the agreement.
The other 11 TPP countries agreed in May 2017 to revive it and
reached agreement in January 2018. In March 2018, the 11 countries
signed the revised version of the agreement, called Comprehensive
and Progressive Agreement for Trans-Pacific Partnership.
• For Japan, promoting the benefits of multilateral free trade
arrangements such as the Trans-Pacific Partnership agreement is a
priority. Tokyo hopes the United States, which has withdrawn from
the TPP framework, will eventually return to it. Japan also welcomes
Britain's willingness to join TPP. Aside from Britain, Thailand,
Indonesia, Colombia, South Korea and Taiwan have also indicated
interest in joining the framework.
• Japan, now the leading economy in the framework, and the other
existing members are seeking to open its doors to new comers amid
the rise of protectionist moves under U.S. President Donald Trump's
"America First" policy.
D. Asia-Pacific Economic Cooperation
(APEC)
APEC economies (Map)
• A forum for 21 Pacific Rim member economies that seeks
to promote free trade and economic cooperation
throughout the Asia-Pacific region.
• It was established in 1989 in response to the growing
interdependence of Asia-Pacific economies and the advent
of regional trade blocs in other parts of the world.
• Asia-Pacific Economic Cooperation (APEC): to defuse fears that
highly industrialized Japan (a member of G7) would come to
dominate economic activity in the Asia-Pacific region; and to
establish new markets for agricultural products and raw
materials beyond Europe. Taiwan Republic of China is
represented by a ministerial-level official under the name
Chinese Taipei as economic leader
• APEC members committed to taking a concrete step
towards greater regional economic integration by
endorsing a roadmap for the Free Trade Area of the AsiaPacific (FTAAP) to translate this vision into a reality.
E. ASEAN
• ASEAN Free Trade Area: (AFTA)
*The ASEAN Free Trade Area (AFTA) is a trade bloc agreement by the Association of
Southeast Asian Nations supporting local manufacturing in all ASEAN countries.
*The AFTA agreement was signed on 28 January 1992 in Singapore. When the AFTA
agreement was originally signed, ASEAN had six members ( Brunei, Indonesia, Malaysia,
Philippines, Singapore and Thailand), Vietnam joined in 1995, Laos and Myanmar in
1997 and Cambodia in 1999. AFTA now comprises the ten countries of ASEAN. All the
four latecomers were required to sign the AFTA agreement to join ASEAN, but were given
longer time frames in which to meet AFTA's tariff reduction obligations.
*The goals of AFTA: (a) Increase ASEAN's competitive edge as a production base in the
world market through the elimination, within ASEAN, of tariffs and non-tariff barriers;
and (2) Attract more foreign direct investment to ASEAN.
Treaty of Amity and Cooperation (TAC) in
Southeast Asia (2003)
ASEAN's Treaty of Amity and Cooperation (TAC)/2003: ASEAN signed the
Treaty of Amity and Cooperation in Southeast Asia, which is an agreement ASEAN
10+3 (ASEAN Plus -Three): ASEAN 10 Plus China, Japan, and South Korea
• ASEAN's Treaty of Amity and Cooperation (TAC)/2003: ASEAN signed the
Treaty of Amity and Cooperation in Southeast Asia.
The Treaty of Amity and Cooperation in Southeast Asia is a peace treaty
among Southeast Asian countries established by the founding members
of the Association of Southeast Asian Nations (ASEAN). In1976, the
treaty was signed into force by the then-leaders of the original members
of ASEAN. The Treaty was amended in 1987 by a protocol to open the
document for accession by states outside Southeast Asia.
*The Treaty of Amity and Cooperation (TAC) in Southeast Asia is a peace
treaty among Southeast Asian countries established by the founding
members of the Association of Southeast Asian Nations (ASEAN), a geopolitical and economic organization of 10 countries located in Southeast
Asia.
*India and China were first, outside ASEAN to sign the treaty in 2003/ As of
July 2009, sixteen countries outside the bloc have acceded to the treaty.
On 22 July 2009, Secretary of State Hillary Clinton signed the TAC on
behalf of the United States.
*The European Union announced in 2009 its intention to accede as soon
as the treaty is amended to allow for the accession of non-states. The
treaty has been endorsed by the General Assembly stating that:
"The purposes and principles of the Treaty of Amity and Cooperation
in Southeast Asia and its provisions for the pacific settlement of
regional disputes and for regional co-operation to achieve peace,
amity and friendship among the peoples of Southeast Asia [are] in
accordance with the Charter of the United Nations."
Principles:
*The purpose of the Treaty is to promote perpetual peace, everlasting
amity and co-operation among the people of Southeast Asia which would
contribute to their strength, solidarity, and closer relationship. In their
relations with one another, the High Contracting Parties shall be guided by
the following fundamental principles;
a. mutual respect for the independence, sovereignty, equality,
territorial integrity and national identity of all nations,
b. the right of every State to lead its national existence free from
external interference, subversion or coercion,
c. non-interference in the internal affairs of one another,
d. settlement of differences or disputes by peaceful means,
e. renunciation of the threat or use of force, and
f. effective co-operation among themselves.
(Map of TAC)
The following table lists the parties (TAC) in the order of the dates on which they entered into
the treaty:
Country
Date
Indonesia
24 February 1976
Malaysia
24 February 1976
Philippines
24 February 1976
Singapore
24 February 1976
Thailand
24 February 1976
Brunei
7 January 1984
Papua New Guinea
5 July 1989
Laos
29 June 1992
Vietnam
22 July 1992
Cambodia
23 January 1995
Burma (Myanmar)
27 July 1995
People's Republic of China 8 October 2003
India
8 October 2003
Japan
2 July 2004
Pakistan
2 July 2004
South Korea
27 November 2004
Russia
29 November 2004
New Zealand
25 July 2005
Mongolia
28 July 2005
Australia
10 December 2005
France
20 July 2006
East Timor
13 January 2007
Bangladesh
1 August 2007
Sri Lanka
1 August 2007
North Korea
24 July 2008
United States
23 July 2009
Canada
23 July 2010
Turkey
23 July 2010
European Union
12 July 2012
United Kingdom
12 July 2012
Brazil
17 November 2012
Norway
1 July 2013
Chile
6 September 2016[39]
Egypt
6 September 2016[39]
Morocco
6 September 2016[39]
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ASEAN Regional Forum (ARF)
ASEAN Regional Forum (ARF): The inaugural meeting of the ARF was held in
Bangkok on 25 July 1994. The objectives of the ASEAN Regional Forum: (1) To
foster constructive dialogue and consultation on political and security issues
of common interest and concern; and (2) To make significant contributions to
efforts towards confidence-building and preventive diplomacy in the AsiaPacific region.
• ASEAN 10+3 (ASEAN Plus -Three): ASEAN 10 Plus China, Japan,
and South Korea. Created in1997.
• The ASEAN–China Free Trade Area (ACFTA) (also known as
China–ASEAN Free Trade Area) is a free trade area among the ten
member states of the Association of Southeast Asian Nations
(ASEAN) and the People's Republic of China. It was signed on 28
January 1992 in Singapore.
• Chiang Mai Initiative: After the 1997 Asian financial crisis, a revival
of the Malaysian proposal, known as the Chiang Mai Initiative was
put forward in Chiang Mai Initiative. It called for better integration of
the economies of ASEAN as well as the ASEAN Plus Three
H. Mekong Subregion (GMS)
Economic Cooperation
1.
(map: Greater Mekong Subregion)
• The Greater Mekong Subregion/GMS: designates a development
project formed by the Asian Development Bank (ADB) in 1992 that
brought together the six states of the Mekong River basin: Cambodia,
Laos, Myanmar (Burma), Thailand, Vietnam, and China.
• The GMS Program, with the support of ADB and other development
partners, helps identify and implement high-priority subregional
projects in a wide range of sectors.
• To realize its vision of a prosperous, integrated, and harmonious
subregion, the GMS Program has adopted a three-pronged strategy:
*increasing connectivity through sustainable development of physical
infrastructure and the transformation of transport corridors into
transnational economic corridors;
*improving competitiveness through efficient facilitation of cross-border
movement of people and goods and the integration of markets,
production processes, and value chains; and
*building a greater sense of community through projects and programs
that address shared social and environmental concerns
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QUIZ: Week 6
How can you approach for assessing the effect of
regionalism via regional intergovernmental
organizations (RIGOs) in East Asia on economic
development? You may choose one or two RIGOs.
Send the answer (Attachment) with less than one page in length
TO: eunhaen@troy.edu
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Purchase answer to see full
attachment