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Tuesday, Dec. 1, 2009

East Asian Community primer

Since taking office, Prime Minister Yukio Hatoyama has attached importance to East Asia policy and has proposed, in Japan and abroad, his vision for creating an East Asian Community (EAC).

The idea of promoting regional cooperation in Asia dates back to the Pacific Rim cooperation initiative advanced in 1979 by then Prime Minister Masayoshi Ohira, which resulted in the inauguration of the Asia-Pacific Economic Cooperation (APEC) forum in 1989. After the Cold War ended, the Association of Southeast Asian Nations (ASEAN) shifted its priority to bolstering regional economic cooperation, and then the East Asia Summit was launched. In 2005, discussions began on ways to create an EAC.

An ASEAN leader once told me, "Japan could not become the leader of Asia as Japan is a homogeneous society. It would be difficult for it to understand Asia's diversity in ethnicity, religion, language, customs and habits." If it wants to push for an EAC, Japan must seriously study bilateral relations, deepen exchanges and become a true friend.

Perhaps because Japan's relevant efforts appear inadequate, Hatoyama's EAC concept is not warmly received in Asia. Former Prime Minister Ohira maneuvered to encourage ASEAN and other relevant countries to take the lead in working out the framework for creating APEC by taking the sentiments of Asian people into consideration. This is a good lesson for today's Japan to learn.

East Asia accounts for about 25 percent of the world's GDP, and that figure is expected to reach 40 percent in 2030. East Asia has potential to be the driving force that helps the world out of recession, so it is strongly hoped that regional integration will succeed and benefit global growth.

To achieve this goal, those involved must specify the substance of their plans for cooperation and the process of implementation:

First, the philosophical and ideological basis for regional cooperation should be made clear.

Asia is diverse in terms of ethnicity, religion, language, lifestyle and culture, but in its diversity there is commonality, such as respect for others' values, deep consideration for trustful relations, hard work and diligence, and coexistence with nature. I strongly hope that the Japanese will push forward regional integration based on human values by stepping up efforts to respect other Asians' sense of values and promote mutual trust.

Second, clear policies should be worked out to give full play to the growth potential of the Asian economy.

To vitalize the regional economy, expansion of free trade is the key policy. Reform of industrial structures, enhancement of technological capabilities, consolidation of infrastructures, improvement of energy and environmental bases, stabilization of financial and currency markets, protection of intellectual properties and development of human resources are also to be tackled. Furthermore, balancing the economy and the environment is important.

Needed for this purpose are measures to: improve market structure, technological systems and corporate management; enhance social awareness of environmental problems; and make contributions to the establishment of a post-Kyoto Protocol framework to fight global warming.

In East Asia, various projects are now being studied for wide-area infrastructure such as the Mekong-India industrial corridor and transportation network. As these plans are indispensable for vitalizing the region, it is necessary to take them forward by using the Asian Development Bank and other related tools.

Third, policies should be adopted with the aim of ensuring peace and political and social stability in the region while envisioning the future of the region.

The European Union has taken many years to achieve integration because of its long-range aim to realize political stability in Europe. Similarly, Japan should sincerely reflect on its history and at the same time try hard to ferment trust in Asia. It should work towards setting up a framework to help denuclearize North Korea and eliminate other unstable factors while attending to human security through efforts at disaster prevention, infectious disease control and poverty reduction.

Fourth, it is necessary to act in a flexible and practical manner.

In Asia, there are multitiered cooperative relationships such as ASEAN plus Three or Six, the ASEAN Regional Forum, APEC and various bilateral free trade agreements (FTAs). It is desirable for these forms of regional integration to operate cohesively and flexibly, from a position of sharing common values.

The problem is how to deal with the United States. While playing a major role in the security of this region, the U.S. is oriented toward free trade and has close economic relations with Asia. It is also a major player in APEC.

Prime Minister Hatoyama initially seemed reluctant about U.S. participation in Asia's regional integration, but changed his attitude about the time President Barack Obama visited Japan. Mr. Hatoyama started emphasizing the pivotal role of the Japan-U.S. partnership.

In my view, U.S. participation should be sought on the idea of making the Pacific "a peaceful and vibrant ocean." At least by concluding its FTA with the U.S., Japan should play a bridging role between the U.S. and Asia.

Fifth, the proposed framework of cooperation needs to be worked out in phased and multilayered ways.

If all of East Asia suddenly becomes involved in talks, the negotiations may get complicated and stagnate. Since Japan, China and South Korea have already been pushing individually for FTAs with ASEAN, and as these three countries jointly represent about 70 percent of East Asia's GDP, it would be realistic for the three to first create an FTA among themselves. They could then integrate such an FTA with thier bilateral FTAs with ASEAN. During this process, it would be desirable to consider a cooperative framework with the U.S.

East Asian nations hope for stable relations between Japan and China, the No. 2 and No. 3 economies in the world. Recently, summit-level exchanges have been taking place frequently between the two countries, offering a good opportunity to foster mutually benficial strategic relations. If Sino-Japanese cooperation deepens, it will greatly contribute to improving the circumstances for regional integration.

In Japan, some merely call for stronger solidarity with Asia in an attempt to revitalize the Japanese economy. However, such an attitude could not gain favor with Asian people. I hope Japan will step up the process of formulating a framework for regional integration in East Asia in a humble manner, and in the interests of Asia.

Shinji Fukukawa, formerly vice minister of the Ministry of International Trade and Industry (now the Ministry of Economy, Trade and Industry) and president of Dentsu Research Institute, is currently chairman of the Machine Industry Memorial Foundation.

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