1 ideas-ris workshop challenges to asian regionalism: an asean perspective suthiphand chirathivat...
TRANSCRIPT
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IDEAs-RIS Workshop
Challenges to Asian Regionalism:An ASEAN Perspective
Suthiphand CHIRATHIVATChulalongkorn University
5-6 November 2009New Delhi, India
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Changing Asia in Regional and Global Dynamics: Economic Outlook
• Asia’s economic outlook seems bright, with developing Asia’s estimated growth at 3.9% in 2009 and 6.8% in 2010.
• Asia leads recovery, despite the global economic downtown.
• China and India are leading region’s economic recovery
• Putting Asia into a “unique position”, but for how long?
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-12.00-10.00-8.00-6.00-4.00-2.000.002.004.006.008.00
10.0012.0014.00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
%
China Indonesia Japan KoreaMalaysia Philippines Singapore ThailandUnited States world EU
Co-movement of GDP Growth in the Asia, US, and EU Current and Forecast by IMF
Source: CEIC
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Changing Asia in Regional and Global Dynamics: Crisis is Redrawing the Map
of Asia’s Global Economic Influence
• A multi-polar economy less reliant on the US consumers will be a more stable economy (Zoellick)
• Crisis has accelerated a shift from west to east• Major emerging economies like China and India
take the lead and are becoming real partners• Would the world now start to “rebalance towards
Asia”?
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Changing Asia in Regional and Global Dynamics: Asia’s Role in the
Global Economy
• Asia’s “Seat at the Table” of G-20
• Growing recognition in the core economic discussion and governance like, the World Bank, WTO and the IMF
• US dollar under scrutiny with an increasing weight of Asian currencies
• Crisis might happen again and Asia is still part of the global imbalances (Bernanke)
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Global imbalances remain, but shifting
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• Strong Foreign Reserves in Asia as compared to other developing countries
• Reserve Pooling is a sound suggested option
• The question is how to implement it
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Changing Asia in Regional and Global Dynamics: New Emphasis on
Regional Strategy
• Crisis proved Asia not “decoupled”
• Debate on export-led growth model
• More focus on regional final demand rather than solely on regional production networks
• Potential rise in per capita income in all emerging Asian economies
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Drop In World Trade volume of goods and services
-15.0
-10.0
-5.0
0.0
5.0
10.0
15.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010e
%
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Moving into Asian Regionalism: At the Beginning
• East Asia,for long, an “Empty Box”
• Preferences of multilateralism
• ASEAN AFTA, the only RTA in operation
• Increasing cooperation and integration since the Asian financial crisis of 1997-98
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Moving into Asian Regionalism: AFTA
• AFTA 1992 to 2010 (2015 for CMLV)– At first, “conditional MFN” and partial tariff
cutting– Agree to go to zero (Bali II)– Each nation’s sensitive lists
• Net effects: each bilateral trade flows faces a different tariff structure
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Moving into Asian Regionalism: ASEAN Economic Community
• AEC Blueprint (2009-2015)• AEC based on single market and productive
base• Also aims for competitive economic region,
equitable economic development and integration into the global economy
• Roadmap for an ASEAN Economic Community• Implementation, hardest part (AEC Scorecard)
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Moving into Asian Regionalism: ASEAN-China FTA
• Signed in November 2004
• Nation-specific sensitive lists & conditional MFN, so de facto 10 bilaterals
• Tariff cutting started mostly mid 2005 to zero by Jan 1st, 2010 for 90% of Products
• From goods to investment and services
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Moving into Asian Regionalism: ASEAN-Japan FTA
• Japan-Singapore was signed in 2002– Different agreement to AFTA and ACFTA, reads like
European & US FTAs, more structured
• Japan-Malaysia signed Dec 2005• Soon with Indonesia, Thailand, the Philippines,
Vietnam and Brunei• In parallel, AJFTA with ASEAN as a whole from
2008• Tariff cutting, to zero by 2012
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Moving into Asian Regionalism: ASEAN-ANZ FTA
• Similar to Japan-ASEAN FTA, much structured an broadened
• In parallel with bilaterals, like Thailand-AWZ, starting in 2005.
• Tariff cutting starting in 2009 to zero in 2015
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Moving into Asian Regionalism: Latest initiatives of AKFTA, AIFTA
• Similar to AC FTA, but more political difficulties, started later
• De facto 10 bilaterals in 2008 (AKFTA)
• Tariff cutting to start in 2010 (AIFTA)
• Investment agreement concluded for AKFTA, to include services as well
• More negotiations needed for ASEAN-India investment and services agreements
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Moving into Asian Regionalism: BIMSTEC, GMS, BIMP-EAGA
• BIMSTEC is aiming at links of countries in South and Southeast Asia– Still negotiations on FTA– More cooperation on agriculture, fishery,
tourism, human resources, etc.
• GMS and BIMP-EAGA are sub-regional cooperation– Infrastructure development– Role of ADB, ASEAN (IAI)
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Moving into Asian Regionalism: Country-to-Country Bilaterals
• ASEAN individual countries have additional bilateral FTAs
• Singapore, the most advanced stage
• Malaysia, Thailand considered as medium high
• Indonesia, the Philippines and Vietnam, at a moderate level
• Others, not significant
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Defining Asian Regionalism: Some Conceptual Issues
• Asian “Noodle Bowl” (“Spaghetti Bowl” a la Bhagwati)
• Managing the Noodle Bowl: The Fragility of East Asian Regionalism (Baldwin (2006))
• Triggers & dominos
• Where all these leading to?
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Defining Asian Regionalism: Likely Outcomes
• ASEAN+1, with 6 major partners• Ad hoc nature of ACFTA, but will get done (192
billions US$ in 2008, from 60 billions US$ in 2002)
• Japan, bilaterals, with big ASEANs, will get done• AJ FTA looks like opportunity for largesse, but
basically, more GSP like• ASEAN-ANZ FTA, also, will get done• Finally, AK FTA and AI FTA look promising as
well (ASEAN-India trade, 50 billions US$ in 2010, then 70 billions US$ in 2012)
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Defining Asian Regionalism: System Fragility
Baldwin argues• East Asia’s collective action problem• Asymmetric dependence makes matters worse
– ASEAN more dependent on the “conveyer belts” than are China and Japan
• If a few “conveyer belts” break down, whole factory suffers– Competitiveness of Japanese firms in US market
depends on intra-regional trade– Ditto Korean & Chinese firms– Indian & ANZ firms?
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Defining Asian Regionalism: Emerging Issues
• RTAs, by nature, discriminatory
• Rules of origin, tools for protection
• Overlapping RTAs, difficult adjustment for business
• In the case of AFTA, utilization rates are low
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Institutionalizing AsianRegionalism: Needs for Broader
Regional Cooperation
• Market dynamics and increasing role of East Asia
• Consolidation of various initiatives
• Immediate concern, overlapping FTAs
• Institutionalizing possibilities, tremendous, but also to be realistic.
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Institutionalizing Asian Regionalism: EAFTA Phase I
• Leaders put EAFTA on the economic cooperation agenda during the 10th ASEAM+3 Summit
• EAFTA process to process within ASEAN+3 framework
• EAFTA to be of high quality
• Economic cooperation along with EAFTA
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Institutionalizing Asian Regionalism: EAFTA Phase II
• Leaders put EAFTA as an important initiative during the 13th ASEAN+3 Summit
• Gradual and realistic strategy be pursued to achieve a desirable and feasible EAFTA
• Consolidating existing FTAs• Working groups on (1) unified ROOs and (2)
tariff nomenclature and other customs-related issues
• Negotiations to be launched by 2012, at the latest
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Institutionalizing Asian Regionalism: CEPEA Phase I
• Objectives and structure to be composed of 3 pillars– economic cooperation– trade and investment facilitation– trade and investment liberalization
• Discussion to be commenced among officials on cooperation and facilitation
• Necessary decision to be made regarding on FTA
• Mechanism to be developed for the private sector
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Institutionalizing Asian Regionalism: CEPEA Phase II
• Objectives and structure reaffirmed by leaders
• Study and discusses on – concrete steps to realize CEPEA– comprehensive framework that includes
cooperation, facilitation and liberalization, and to be commenced immediately among officials.
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Impact on GDPASEAN+6 ASEAN+3
China 4.65 4.49
India 3.40 -0.07
Japan 0.64 0.63
Korea 2.67 2.64
Indonesia 4.35 4.15
Malaysia 9.53 9.24
Philippines 5.95 5.77
Singapore 3.83 3.67
Thailand 7.46 7.21
Vietnam 11.06 10.79Source: CEPEA Report
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Institutionalizing Asian Regionalism: ASEAN’s Centrality
• Role of ASEAN in the ASEAN+3 and ASEAN+6
• ASEAN’s in the driver’s seat?
• Bloc’s top-down, what’s about bottom-up?
• Upcoming challenges: Who’s in or out?
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Institutionalizing Asian Regionalism: Latest Initiatives
• Leaders accepted both EAFTA and CEPEA initiatives, still to be decided how to proceed
• In addition, more proposals added at the 4th East Asia Summit– “East Asia Community” by Japanese PM
Hatoyama– “Asia-Pacific Community” by Australian PM K.
Rudd