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Currently, the world is becoming increasingly integrated because of intensive trade liberalisation in different parts of the globe. Regional grouping also become an important trend around the world.
After the European Coal and Steel Community (ECSC), established in 1952, progressed to the creation of a customs union, the European community as a single market in 1992, and evolved into the European Union, the North American Free Trade Agreement (NAFTA) was also established in order to strengthen economic growth in the three-member countries, namely Canada, the United States and Mexico in January 1994.
Then, other regions realised seeking co-operation. During the 1990s, East Asia has been the most rapidly growing region in the world. It experienced a decade of "miraculous growth" before the outbreak of the financial crisis in 1997. However, it was the only major region in the world without formal regional arrangements.
The Association of Southeast Asian Nations (ASEAN), established on 8 August 1967 under the "Bangkok Declaration" by the five member countries namely Indonesia, Thailand, Singapore, Malaysia, and Philippines, can be accounted the first regional grouping in Asia. However, it has encompassed only the Southeast Asian countries.
There has never been any co-operation between the Northeast Asia and Southeast Asia. In fact, there was an initiative of Asian regional grouping in the 1990s from the Malaysia's Prime Minister Mahathir Mohamed, named the East Asia Economic Caucus (EAEC) comprising ASEAN, China, Japan and the Republic of Korea.
In 1997, the Asian financial crisis, which broke out from the Thailand bubble-economic crisis, gave impetus to Asian nations to realise the necessity of co-operation. The 1997 Asian financial crisis affected every country around the world; especially the Asian countries.
The crisis was an important turning point, since it changed greatly both the environment and structure of the East Asian economic growth and integration. Many East Asians realised the need to make their own arrangements. As an aftermath of the l997 crisis, there emerged a new push for larger regional co-operation that led to the first "ASEAN plus three" (APT) leaders' meeting that included China, Japan and the Republic of Korea in Kuala Lumpur in November 1997.
It started as co-operation in international finance, driven by the need to avoid future currency crises within the region. Compared to the three Northeast Asian countries, ASEAN has been far inferior economically. At the 1997 economic crisis, ASEAN lacked sufficient economic weight and political unity to tackle to the problem. Moreover, due to the weight of China, Japan, and South Korea, ASEAN was unable to lead them.
Northeast Asian countries themselves probably do not want to lose their identity and power. However, there is another role which ASEAN can perform. ASEAN can promote regional integration and co-operation and bridge East Asian countries into an East Asian co-operative process.
One of important setbacks in establishing the East Asian Community are China-Japan relations, troubled by suspicion and differences. There are historical reasons for this, from the Second World War. The politics of apology have been troubling Japan's ties with Korea and ASEAN too. However, they have emphasised a pragmatic approach to the economic aspects of the relationship.
On the other hand, the present circumstances and future relations between Japan and China are often adversely impacted by the US position. China will feel uncomfortable with Japan as a US partner, when China-US relations are strained. Conversely, Japan shows concern when US-China relations show improvement. Co-leadership of China and Japan might be necessary in the future, but it is still premature to project a picture of these co-leaders.
ASEAN can play a mediation role in China-Japan relations. The future of East Asian Community is at stake. The financial crisis was a driving force for promoting co-operation in East Asia, but the crisis itself has created difficulties in doing so. The political will of East Asian countries is not so strong in their efforts in moving toward high-level integration, such as a community. Due to the great diversity, consensus-building among East Asian countries is always very difficult. It will come across a variety of difficulties and setbacks on the way.

Copyright Business Recorder, 2010

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