Asian Integration Necessary to Survive

Kim Dae-jung''s Asian Economic Proposal Reflects More Regional Willingness to Let Korea Lead

Debates over whether globalization and regionalism complementary or contradictory are moot. Even economists believe the debate will not end for a long time.

The international organizations charged with creating a global economic order cannot afford to indulge in mere rhetoric. World trade bodies such as the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, are pressed to make decisions to direct the flow of world trade.

When the United States created the North American Free Trade Agreement, advocates of globalization protested that integrating a regional economy goes against the tide of globalization, a charge the United States rebutted by citing the example of the European Union.

Neither the GATT nor the WTO were bold enough to cry foul over the NAFTA or the EU, and they conveniently decided that the regionalism of the United States and Europe does not contradict globalization.

The world order is governed by strong powers, backed by their strength. This is a hard fact of reality. There is one problem, however, which is to say that we have to ask why Asia is not allowed to used the same logic to create its own regional bloc.

Not allowed? you could ask. Asia doesn''t need anyone''s permission to strengthen its regional ties, you might retort angrily. True, but since when did the world revolve around the countries of lesser power?

In 1998, Malaysian Prime Minister Mahathir proposed the formation of East Asian Economic Caucus, as a regional economic cooperation mechanism between the 10-member Association of Southeast Asian Nations and its three key Northeastern Asian partners, South Korea, China and Japan.

South American states also took their first step towards creating a regional bloc by launching Mercosur, known as the Southern Common Market. Only Asia has so far failed to achieve a powerful economic integration, for two reasons.

The first is historical conflicts between Asian countries and Japan, the centripetal force of Asian integration. More precisely, Asian countries fear the specter of Japan''s past militarism recurring in a different form.

Actually, Japan has been trying hard to reinforce regional cooperation, proposing the Asian Monetary Fund, the Miyazawa Plan, and a South Korea-Japan free trade agreement. The other countries in the region, despite the benefits they could expect from closer integration, were reluctant to accept the proposals due to the wide gap in the economic strength between themselves and Japan.

The second reason for the lack of Asian economic integration is objections by the United States. Unless the United States can relocate its territory at will, it is not qualified to join a trade bloc in a continent in which it is not situated. The United States thus conceived the notion of distinguishing regional boundaries around the seas, i.e. the Atlantic and the Pacific, rather than Europe and Asia. NATO and APEC were the result.

But it is impossible to apply even this expedient to the EAEC, which specifically limits the participants to Asian countries. The United States is competing with the EU to hold sway over the 21st century economy. Under the circumstances, it can hardly welcome the economic integration of East Asia led by Japan and China.

Since the collapse of the Soviet Union, holding China in check or at least keeping Japan and China from cooperating might have been the top priority in U.S. foreign policy. Prime Minister Mahathir is also on the U.S. blacklist for his biting criticisms of the International Monetary Fund and U.S. meddling in the Asian economy. Thus the United States tried to prevent the formation of an Asian economic community, on the ground that it could turn into a protectionist bloc.

During the recent ASEAN Plus Three summit in Singapore, President Kim Dae-jung proposed the launching of an East Asian mechanism to foster economic integration. He presented specific plans, including the creation of an East Asia Study Group, which will report back in 12 months on the proposed ideas.

Although the political situation in East Asia has not changed greatly from two years ago when President Kim first floated the idea, there are several notable points about its reception now.

First, Asian countries are less resistant to Korea playing the leading role in creating a regional forum, due to the traditional rivalry between China and Japan. Mr. Kim also enjoys high confidence in Washington, and is better suited to take the lead than Prime Minister Mahathir, who is known for his anti-American sentiments.

We do not know whether Mr. Kim conceived the proposal independently or after consultation with the United States. In any case, there are still many obstacles to be overcome to create an East Asian economic entity, such as liquidating past conflicts between Japan and other Asian countries and allaying smaller nations'' anxieties over the possibility of China and Japan supremacy.

Despite the problems, East Asian countries agree there is a pressing need to strengthen regional economic cooperation and ties in order to compete. No country or region is preordained to lead the world. East Asia has to unite to find ways to compete in a globalizing world.

The writer is an editorial writer of the Joongang Ilbo.

by Joseph W. Chung