Fighting Irrelevance: An economic community 'with ASEAN characteristics'

Abstract

Contrary to expectations at the time, the financial crises of 1997-98 may have strengthened ASEAN. The backlash against a perceived unsympathetic Western response put ASEAN at center stage in new regional cooperative arrangements. Moreover, the rivalry between China and Japan for regional leadership has led them both to seek to negotiate regional partnerships with ASEAN as a whole. ASEAN, however, faces new challenges - particularly from rapid economic growth in China and India, and from the proliferation of preferential trade agreements (PTAs). ASEAN has made only slow progress in economic cooperation, which has fallen further behind schedule. The private sector makes little use of ASEAN's preferential arrangements because they afford little advantage over most-favored-nation tariffs. ASEAN has failed to address 'deeper integration' issues - the removal of 'beyond border' barriers to trade. Some of the bilateral PTAs that ASEAN countries have negotiated with extra-regional partners go further in removing barriers than ASEAN's own arrangements. ASEAN members continue to eschew binding commitments. Liberalization under ASEAN's auspices has not been sufficiently significant to encourage business groups to invest substantial resources in lobbying for deeper integration. Show more