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Regional Economic Integration Elsewhere Outside of Western Europe and the Americas, there have been few significant attempts at regional economic integration. Although there are a number of groupings throughout Asia and Africa, few exist in anything other than name. Perhaps the most significant is the Association of Southeast Asian Nations (ASEAN). In addition, the Asian Pacific Economic Cooperation (APEC) forum has recently emerged as the seed of a potential free trade region. Association of Southeast Asian Nations Formed in 1967, ASEAN includes Brunei, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Laos, Myanmar, and Vietnam have all joined recently, and their inclusion complicates matters because their economies are a long way behind those of the original members. The basic objectives of ASEAN are to foster freer trade between member countries and to achieve cooperation in their industrial policies. Progress has been very limited, however. For example, only 5 percent of intra-ASEAN trade currently consists of goods whose tariffs have been reduced through an ASEAN preferential trade arrangement. Future progress seems limited because the financial crisis that swept through Southeast Asia in 1997 hit several ASEAN countries particularly hard, most notably Indonesia, Malaysia, and Thailand. Until these countries can get back on their economic feet, it is unlikely that much progress will be made. Asia Pacific Economic Cooperation Asia Pacific Economic Cooperation (APEC) was founded in 1990 at the suggestion of Australia. APEC currently has 18 member states including such economic powerhouses as the United States, Japan, and China (see Map 8.3). Collectively the 18 member states account for half of the world's GNP, 40 percent of world trade, and most of the growth in the world economy. The stated aim of APEC is to increase multilateral cooperation in view of the economic rise of the Pacific nations and the growing interdependence within the region. US support for APEC was also based on the belief that it might prove a viable strategy for heading off any moves to create Asian groupings from which it would be excluded. Interest in APEC was heightened considerably in November 1993 when the heads of APEC member states met for the first time at a two-day conference in Seattle. Debate before the meeting speculated on the likely future role of APEC. One view was that APEC should commit itself to the ultimate formation of a free trade area. Such a move would transform the Pacific Rim from a geographical expression into the world's largest free trade area. Another view was that APEC would produce no more than hot air and lots of photo opportunities for the leaders involved. As it turned out, the APEC meeting produced little more than some vague commitments from member states to work closely together for greater economic integration and a general lowering of trade barriers. However, significantly, member states did not rule out the possibility of closer economic cooperation in the future.32 Map 8.3 see Asia Pacific Economic Cooperation The heads of state met again in November 1994 in Jakarta, Indonesia. This time they agreed to take more concrete steps, and the joint statement at the end of the meeting formally committed APEC's industrialized members to remove their trade and investment barriers by 2010 and for developing economies to do so by 2020. They also called for a detailed blueprint charting how this might be achieved. This blueprint was presented and discussed at the next APEC summit, held in Osaka, Japan, in November 1995.33 This was followed by further meetings in 1996 and 1997. At the 1997 meeting, member states formally endorsed proposals designed to remove trade barriers in 15 sectors, ranging from fish to toys. However, the plan is vague and commits APEC to doing no more than holding further talks. Commenting on the vagueness of APEC pronouncements, the influential Brookings Institute, a US-based economic policy institution, noted that APEC "is in grave danger of shrinking into irrelevance as a serious forum." Despite the slow progress, APEC is worth watching. If it eventually does transform itself into a free trade area, it will probably be the world's largest.34 |
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