US wary of move for E Asian economic integration
The Daily Yomiuri (Tokyo) | Nov. 9, 2006
U.S. wary of move for E. Asian economic integration
Taku Iwaki / Yomiuri Shimbun Staff Writer
The Asia-Pacific Economic Cooperation forum’s reported move to launch discussions on the creation of a Free Trade Area of the Asia-Pacific region (FTAAP) reflects Washington’s wariness of an initiative for East Asia’s economic integration centering around the Association of Southeast Asian Nations.
The proposal for embarking on studies on an Asia-Pacific free trade zone is expected to be on the agenda for leaders of the 21 economies in the region, who will get together in Hanoi on Nov. 18-19 for an annual summit meeting.
China and the 10-nation ASEAN are likely to react so unenthusiastically to the U.S. move that the summit meeting will find it difficult to coordinate conflicting stances toward an APEC-wide free trade agreement.
To date, the notion of an APEC free trade agreement involving all 21 economies has been floated at a private level.
The United States reportedly wants to give a boost to the idea by having the APEC members agree to enter into a joint study on an FTAAP, looking into hurdles that will have to be surmounted for the realization of an all-inclusive free trade agreement as well as the merits of such an accord for about one year.
Behind its trade strategy vis-a-vis East Asia is Washington’s concerns about the possibility of an East Asian regional economic bloc emerging without the presence of the United States.
In East Asia, China has been strengthening its economic influence by concluding free trade agreements with ASEAN.
The possible process and related agreements on economic integration of Asia have been regularly taken up by leaders of ASEAN as well as Japan, China and South Korea during their summit meetings in November or December.
Japan, for its part, also has proposed its own initiatives for concluding an East Asian Economic Partnership Agreement and setting up an East Asian version of the Organization for Economic Cooperation and Development. Multilateral talks on the initiatives have begun, involving 16 countries—the 10 ASEAN member states, Japan, China and South Korea as well as Australia, India and New Zealand.
The APEC region and East Asia have the world’s leading high-growth emerging economies such as China, India and Russia.
The European Union also is intensifying its approach to Asian economies, including ASEAN, to conclude free trade agreements.
From the U.S. perspective, it is the most realistic to make the best use of APEC to keep itself part of Asian economic integration.
A Japanese government source said Washington is apparently trying to use APEC as leverage to open up the Asian market.
Leaders attending the Hanoi summit meeting are likely to back the U.S. proposal as far as it is designed to launch a joint study on an FTAAP.
However, China, which has been increasing its economic sway over ASEAN, has been reacting strongly against U.S. involvement.
In 2004, China proposed an East Asia Free Trade Area plan, including ASEAN, Japan, China and South Korea.
Against this backdrop, Beijing been insisting that trade liberalization in the ASEAN plus Three zone—which includes Japan, China and South Korea—should precede the conclusion of an APEC-wide free trade accord.
But, Washington’s wariness aside, it is very difficult for APEC to pursue economic integration involving the 21 member economies as there is an enormous gap concerning levels of economic development and liberalization.
It has been APEC’s tradition since its inauguration in 1989 to adopt nonbinding agreements.
However, the United States proposed during preparatory high-level sessions for the Hanoi summit talks that APEC attach binding power to some trade liberalization measures.
If the United States enhances its efforts to strengthen the role of APEC in the future, developing countries in the regional forum will become wary of Washington’s aim, a development that will trigger discord among the 21-economy group.
