Towards Asian Integration

Abstract

The Trans-Pacific Partnership (TPP) is dead; the largest free-trade zone in the world, the European Union, has splintered; and the global economy is on the way to notching up a decade of sub-par growth in trade and output following the global financial crisis. Given the backlash in developed polities against globalisation, the economic and political juncture at which Asian countries find themselves may not seem conducive to a push for further integration. But it is imperative that integration proceed. Given slower growth elsewhere, Asia’s place as the dynamic heart of the world economy must be entrenched and reinforced by a regional commitment to lowering barriers to the movement of goods, services, capital and people—and, crucially, by investing in the infrastructure that makes integration and connectivity a practical reality. That is as important now to the global trade regime as it is to the success of the Asian development enterprise. The form that this integration will take is still open. With the eclipse of the TPP, the Regional Comprehensive Economic Partnership (RCEP) spearheaded by ASEAN looks to be the only game in town for plurilateral trade and investment liberalization. Hopefully RCEP will be seen as a platform for ongoing cooperation rather than merely another addition to the ‘noodle bowl’ of Asian economic agreements. On the infrastructure front, China’s Asian Infrastructure Investment Bank is a welcome initiative, but the sums required to finance the kind of connectivity that Asian economies require are immense, and coordination is more important than ever. China’s ongoing financial liberalisation and outward investment will also put the region’s markets and regulators to the test in managing the risks while supporting the financial integration of the region. The essays in this issue of EAFQ have been adapted from the forthcoming 38th Pacific Trade and Development Conference volume on Asian integration. It brings together some of the region’s most prominent analysts to take stock of integration efforts to date and to chart a course for Asia’s future. Our regular Asian Review section features essays on what President Donald Trump means for Asia, the US-China economic relationship, and the future of the global monetary system and Chinese investment. Show more