Although the political climate in the United States, Britain, and other mature economies has turned against economic integration, ASEAN and its FTA partners are continuing to push for closer trade links in the Asia-Pacific via the Regional Comprehensive Economic Partnership (RCEP). The ASEAN-led RCEP is a mega FTA, involving the ten ASEAN countries, plus China, Japan, South Korea, India, Australia and New Zealand. The recently concluded ASEAN Economic Ministers meeting (49th AEM) held in Manila saw all ministers from all 16 countries endorsing a set of clear key elements that will guide the RCEP negotiations in November.
This is a positive step, but some analysts are arguing that the spotlight on the RCEP has overshadowed progress towards a more comprehensive East Asia Economic Community (EAEC) – the EAEC has effectively fallen under the radar.
Realising an East Asia Economic Community by 2020
The EAEC was suggested by the second East Asia Vision Group in 2011, and the proposal was adopted by the ASEAN Plus Three Commemorative Summit in Cambodia in 2012. The EAEC brings together all 10 ASEAN states with China, Japan, and South Korea. It aims to lower intra-regional tariff and non-tariff barriers, and beyond that, to realise a region of shared interests featuring equitable, inclusive, and sustainable development. The countries involved originally committed to establishing the EAEC by 2020. But in recent years, there has not been much media focus on this goal.
Geopolitics as a hump in the road
Despite the attractiveness of a fully integrated region, geopolitical concerns have impeded progress in developing a master plan to reach the 2020 goal. China and some ASEAN members still have yet to resolve the South China Sea territorial disputes, though some progress is being made in negotiations towards a Code of Conduct. Similarly, tensions remain between China and Japan over the Diaoyu/Senkaku islands. Disunity and lack of trust present a potential roadblock in achieving an integrated EAEC.
RCEP as a stepping stone to an integrated EAEC
However, the RCEP could be used as a starting point for Asian states to cooperate more deeply. All the EAEC states are also involved in the ASEAN-led RCEP negotiations, and mutual cooperation is key for this mega FTA to succeed. It has been suggested that countries should use the RCEP negotiations as a starting point of reference for a future EAEC that features deeper integration than the RCEP.
The process of negotiating and creating the RCEP can also serve as a confidence-building exercise for all the parties involved. Additionally, the common denominator in both groupings is ASEAN – making ASEAN is the central actor and influencer, a potential key player in building an integrated EAEC.
According to the Economic Research Institute for ASEAN and East Asia (ERIA), the region’s agreements should be seen as a continual process of integration, with the ASEAN Economic Community (AEC) that involves the ten ASEAN members eventually incorporating each of the countries ASEAN has FTAs with. The RCEP process can be seen as a step towards this. ERIA argues that Asia needs an ‘open regionalism’ policy, regional integration which is not discriminatory to outside countries but rather seeks to bring all parties on board.
Sources
The Road towards the East Asia Economic Community (EAEC) 2020: Report of the NEAT Working Group [The Council on East Asian Community, 2016]
East Asian Integration: Towards an East Asian Economic Community [Asian Development Bank Institute, 2017]
ASEAN: Regional Integration and Reforms [ERIA (Discussion Paper Series), Sep 2015]
Photo Credit: 49th Meeting of the ASEAN Economic Ministers (Philippine Business Registry)
