Asian Economic Integration, Meet the 'Anti-Region'

Yesterday evening, we at LSE IDEAS hosted an event titled "Contesting East Asian Economic Integration: China, Japan, US" featuring two of the UK's foremost authorities on the subject matter in Shaun Breslin of the University of Warwick and Christopher Dent of the University of Leeds. Those with an interest in regions or regionalization--particularly in the Asia-Pacific--should find both names exceedingly familiar. As I was the speaker introducing the topic at this roundtable presentation, I set the table with the presentation slides above. (The content of PowerPoints above are much updated from the lecture slides I uploaded earlier.) Understandably, free trade agreements are always coloured by political considerations--whom to include, what goods and services to include, and so forth.



As such, various countries tout their own preferred groupings--including the world's three largest economies. China wants to stick with ASEAN+3 or the ten ASEAN countries plus China, Japan and South Korea. Japan, wary of increasing Chinese regional influence--perhaps especially now that the PRC has overtaken it as the world's third largest economy--is keener on ASEAN+6, or ASEAN+3 plus India, Australia, and New Zealand. More recently, the East Asia Summit upon which a putative ASEAN+6 (or East Asian Community) would be based recently invited Russia and the US, further complicating matters. After all, Russia isn't even a WTO member. Also, can you imagine the US and Myanmar being in a free trade agreement? Finally, the United States is still pushing for a regional grouping built upon the Asia Pacific Economic Cooperation (APEC). At present, there is an existing FTA called the Trans-Pacific Partnership (TPP) among Brunei, Singapore, Chile, and New Zealand that does boggle the mind as to the 'Asianness' of it all. Still, the US is exploring possibilities for joining the TPP and creating momentum for a 'bandwagon' effect. Not only would it include itself in regional integration despite obviously being outside of Asia proper, but it would also make TPP the more likely wider FTA.



Shaun Breslin countered my suggestion that China, Japan, and the US were seeking their own visions of economic integration by explaining that Japan and the US were likely pursuing a strategy of 'anti-region.' That is, the purpose of championing an East Asian Community for Japan wasn't really to counterbalance the presence of China in a regional grouping, but to forestall the far more likely formation of an ASEAN+3. For Japan, it may indeed be the case that the status quo of having no broader regionalism effort suits it better. With more countries being invited at Japan's behest to the East Asia Summit, it becomes progressively more difficult to obtain consensus on a pan-regional FTA. To some extent, the Trans-Pacific Partnership is yet another instance of an unlikely FTA whose main purpose is not constructive but diversionary. (For instance, ASEAN members Brunei and Singapore are founding TPP members, while Vietnam is seeking to join--but what about the rest?)



Meanwhile, the objectives for China in pursuing regional integration according to him are threefold:

1. To neutralize America's geostrategic hold over East Asia by means of growing trade ties with nation-states in the region;
2. To undermine Japan's regional stature in relation to China; and
3. To continue Taiwan's status as a non-country despite its obvious economic heft.

Though it's a bit too complex to explain here and I suggest reading Professor Breslin's recent Review of International Studies paper to get a fix on the concept, he draws on the work of Walter Mattli to ultimately argue that there is a deliberate oversupply of regions being proposed by the Japanese and Americans to delay the seeming inevitability of ASEAN+3. Provocatively, he suggests that China's 'Monroe Doctrine' moment when China declares East Asia as its sphere of influence may be at hand.



Christopher Dent also had interesting things to say about this regional competition. For him, regions are in a constant state of flux where power essentially resides in those who are able to determine membership in a particular region and make it stick. (For instance, previous centuries of European hegemony mean that the 'Middle East' and 'Far East' make sense--if your location was in Western Europe.)



Moreover, he believes that many of us who study regions neglect to mention that FTAs can be very dissimilar. Given that all of them are custom-made or bespoke as it were, they vary greatly in terms of what falls under their remit as well as how various participants' areas of comparative advantage are treated. For obvious reasons, media content-heavy America will always insist on strong intellectual property rights protection and access to others' markets for services.



As for the likelihood of regions, all three of us agree that ASEAN+3 is most likely to come to fruition--there is no doubt about that given its more compact membership (read: less rival interests to sort out) and already-existing Asian Development Bank-based initiatives. Still, Professor Dent believes that there can be a multiplicity of regional arrangements coexisting at the same time covering ever-so-slightly different facets of economic interaction. At the same time, while ASEAN+3 and the East Asian Community may stand some chance of coexisting, the prospects for an expanded Trans-Pacific Partnership are remote to him. For, prospective TPP member Vietnam is very unlikely to adduce trade and environmental standards as per the preferences of more trade-phobic Democratic lawmakers who've inserted such conditions into recent US FTA proposals.



All in all, it was a highly informative and at times entertaining event. We will soon upload a video interview of Shaun Breslin so that will be something to look forward to as well. In the meantime, we'll continue to monitor the rather exciting if sometimes confusing proliferation of FTAs in the Asia-Pacific. I hope the material included above helps makes sense of it all.