Case Study ; Asian Regionalism

The most important regional initiatives to have emerged in Asia have come out of the Association of South-East Asian Nations (ASEAN). ASEAN was established in 1967 by Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, with Vietnam (1995), Laos and Burma (1997) and Cambodia (1999) joining subsequently. ASEAN was a product of the Cold War period, its initial interests focusing mainly on security matters, especially those linked to settling intra-regional disputes and resisting superpower influence. However, the organization moved steadily towards cooperation on economic and trade matters, leading in 1992 to the agreement to establish the ASEAN Free Trade Area, due to be completed by 2007. This was complemented by the growth of political regionalism, in the form of an emphasis on so-called ‘Asian values’ , sometimes portrayed as the ‘ASEAN way’, although enlargement and other developments have meant that this has become, over time, a more marginal and contested aspect of the ASEAN project. The integration process was nevertheless given renewed impetus from the late 1990s onwards, both by the vulnerabilities exposed by the Asian financial crisis of 1997–98 and by the need to cooperate and compete effectively with the rapidly rising economic powers of China and India. This led to initiatives such as the proposed creation of the ‘ASEAN Community’, due to be completed by 2015, which has led some to draw parallels with the EU and the process of European integration . In addition, attempts to foster political and economic dialogue with major powers, notably the ‘big three’ Asia-Pacific powers, the USA, China and Japan, were stepped up. Particular emphasis in this respect has been placed on strengthening ASEAN’s relationship with China.

In 2002, China and ASEAN agreed to create between them the world’s largest free trade area, which would encompass some 2 billion people and which came into effect at the beginning of 2010. ASEAN has also sought to promote wider regional cooperation, in a number of ways. These include the ASEAN Regional Forum (ARF), established in 1994, which aims to build confidence and enhanced dialogue on security matters amongst Asia-Pacific countries. As of 2010, the ARF had 27 members. The ASEAN Plus Three grouping, created in 1997, has deepened cooperation between the ASEAN ten and China, Japan and South Korea. One of its most important achievements was the Chiang Mai Initiative of 2000, under which the ASEAN Plus Three countries launched a multilateral arrangement of currency swaps designed to provide protection against future financial crises. ASEAN also plays a leading role in the East Asia Summit (EAS), which has been held annually since 2005 and includes, as well as the ASEAN countries, China, Japan, South Korea, India, Australia and New Zealand.

ASEAN brings together ten Southeast Asian states – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – into one organisation.

Since the late 1990s, ASEAN has developed in ways that have encouraged commentators to draw comparisons with the process of European integration. This has happened particularly due to the ambitions set out at the ninth ASEAN summit meeting of heads of government, in Bali in 2003, to establish an ‘ASEAN Community’. In language reminiscent of the EU, this involves ‘three pillars’: the ASEAN Economic Community, the ASEAN Political-Security Community and the ASEAN Socio-Cultural Community.

The economic aspect of this intensified cooperation is especially important because of the perception that ASEAN has only had limited success in creating a genuine free trade area. The bloc’s biggest success in recent years has been promoting economic integration among members. It also helped negotiate the RCEP, the world’s largest free trade agreement.

The ASEAN Economic Community aims to create a ‘seamless production base’ and an integrated market among member countries. In a process due to be completed by 2015, remaining tariffs within ASEAN are scheduled to be eliminated, together with a large number of nontariff barriers; trade in services will be fully liberalized and barriers to flows of capital and skill labour will be relaxed in all economic sectors. However, significant differences exist between ASEAN and the EU as models of regional integration, and these seem set to continue. In particular, ASEAN is geared to the establishment of a free trade area, with even the goal of a common external tariff (which would make ASEAN a fully-fledged customs union) some way from being achieved.

The EU, by contrast, has gone much further, by establishing a single market and subsequently embracing monetary union. Most importantly, ASEAN has remained firmly intergovernmental in character and has not engaged in EU-style experiments in supranational governance, its long-standing emphasis on state sovereignty impeding the construction of a more centralized decision-making framework. How can differences between ASEAN and the EU be explained?

In the first place, ASEAN embraces greater economic and political diversity than does the EU (for instance, Singapore and Burma represent radically different forms and levels of economic development).

Second, as the largest economies in the region, notably China, Japan, India and South Korea, remain outside ASEAN, the association’s emphasis tends to be placed more on sponsoring wider cooperation than on consolidating its internal market.

Third, as an association of relatively equal countries, ASEAN lacks a major power, or powers, that could drive the integration process in the way that France and Germany have done in Europe.

Fourth, ASEAN’s project of regional integration has never been fuelled by the same level of political urgency as was injected into the European project by the pressing need to overcome Franco-German hostility and thus to prevent future world wars. ASEAN has struggled to form a cohesive response to Myanmar’s military takeover and China’s claims in the South China Sea, which overlap with those of several ASEAN members.

ASEAN is headed by a chair—a position that rotates annually among member states—and is assisted by a secretariat based in Jakarta, Indonesia. Important decisions are usually reached through consultation and consensus guided by the principles of noninterference in internal affairs and peaceful resolution of conflicts. Many experts see this approach to decision-making as a drawback of the organization. “These norms of consensus and noninterference have increasingly become outdated, and they have hindered ASEAN’s influence on issues such as dealing with China and crises in particular ASEAN states,” says CFR’s Joshua Kurlantzick.

Supporters of ASEAN, such as Kishore Mahbubani, who served as Singapore’s permanent representative to the United Nations, say the grouping has improved previously hostile regional relations. “[ASEAN’s] culture of consultations and consensus generated geopolitical miracles, some so stealthy that few outside the region have noticed them,” says Mahbubani.

RCEP entered into force on 1 January 2022, for ten countries, Australia, New Zealand, Brunei Darussalam, Cambodia, China, Japan, Laos, Singapore, Thailand and Vietnam, with Australia as an original party. RCEP entered into force for the Republic of Korea on 1 February 2022 and for Malaysia on 18 March 2022. The 16 countries negotiating the RCEP together account for a third of the world Gross domestic product (GDP) and almost half the world’s population, with the combined GDPs of China and India alone making up more than half of that. RCEP's share of the world economy could account for half of the estimated $0.5 quadrillion global (GDP, PPP) by 2050.

What is the objective of RCEP?

RCEP aims to create an integrated market with 16 countries, making it easier for products and services of each of these countries to be available across this region.

The negotiations are focused on the following: Trade in goods and services, investment, intellectual property, dispute settlement, e-commerce, small and medium enterprises, and economic cooperation.

China's role in RCEP

RCEP was pushed by Beijing in 2012 in order to counter another FTA that was in the works at the time: The Trans-Pacific Partnership (TPP). The US-led TPP excluded China. However, in 2016 US President Donald Trump withdrew his country from the TPP. Since then, the RCEP has become a major tool for China to counter the US efforts to prevent trade with Beijing.

The RCEP isn't as comprehensive and doesn't cut tariffs as deeply as the TPP's successor. But many analysts think RCEP's sheer size makes it more significant.

"Its membership includes a larger group of nations, notably reflecting the membership of China, which considerably boosts the total Gross Domestic Product (GDP) of RCEP members," according to Rajiv Biswas, Asia Pacific chief economist for analyst firm IHS Markit.

While China already has a number of bilateral trade agreements, this is the first time it has signed up to a regional multilateral trade pact.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement (FTA) between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.

The CPTPP was signed by the 11 countries on 8 March 2018 in Santiago, Chile.

The CPTPP entered into force on 30 December 2018 for:

  • Australia

  • Canada

  • Japan

  • Mexico

  • New Zealand

  • Singapore

on 14 January 2019 for:

  • Vietnam

and on 19 September 2021 for:

  • Peru