Introduction 

The geographic concept of “East Asia” which covers Northeast and Southeast Asian regions is relatively new. In Japan, until recently, the term seemed to imply almost the same area as “Northeast Asia” that included Japan, Korea and China. The Russian Far East (and sometimes North Korea) was often included when one talked about economic cooperation in the “East Asian” region (or the “Japan Sea Rim” cooperation), but not Southeast Asian countries. However, after the currency crisis broke out in 1997 and hit many Asian economies severely, a renewed necessity of regional cooperation has emerged. As the ASEAN Plus 3 process has begun to take off, the words “East Asia” now often imply the geographic area on which this round table discussion focuses. It shows how fast the ASEAN Plus 3 process has been developing.

           Before starting, however, I have to admit that I am not familiar with the concept of the “East Asian Economic Development Organisation”. Is it the same as ASEAN Plus 3 process, or something different in cooperation measures or participants? In this brief paper, thus, I will concentrate on discussing the ASEAN Plus 3 process. First, I review the recent policy of the Japanese government on East Asia and the rapid development of the ASEAN Plus 3 process. Second, the evolving policy objectives of Japan for the ASEAN Plus 3 will be discussed. Third, how the ASEAN Plus 3 fits in the existing institutions in the region, such as ASEAN and APEC, will be considered. 

The Asian Currency Crisis and Japan’s ASEAN Plus 3 Policy 

The basis of Japan’s policy toward Southeast Asia was laid in August 1977 in the then Prime Minister Takeo Fukuda’s speech to commemorate the 10^th anniversary of ASEAN. The “Fukuda Doctrine” declared, among other things, that Japan would never become a military power again, it would pursue mutual confidence building with ASEAN members, and it would assist their economic development as an equal partner. Though the philosophy of the Fukuda Doctrine is still valid after more than two decades, it did not attempt to build new regional mechanisms under which Japan would carry out its policy. That kind of initiatives always came from the ASEAN side (i.e. Dialogue Partnership in the 1970s). Nevertheless, the Asian currency crisis that occurred first in Thailand in July 1997 had much influence on the readiness for accommodating such mechanisms (or institution) not only in Japan but also in other East Asian countries in general.

           The immediate response to the crisis by regional actors had significant implications for subsequent cooperation in the region. Of the emergency loan program for Thailand worth $17 billion, IMF provided just less than 25% and the rest promised by countries in East Asia including Japan. Countries in Europe and North America did not participate. From this result, the Japanese Ministry of Finance realised that future currency crisis in any country in East Asia, which would be highly transmissible to others, had to be dealt with mainly by countries in the region and the IMF would support the move if it were coordinated with the Fund (Kikuchi [2001]). The Ministry’s response was the Asian Monetary Fund proposal shortly after the outbreak of the crisis in September 1997, but it was only to be denied by opposition from the IMF, the United States, China and others, though it had strong support from Thailand, Malaysia and Indonesia. The next response from Japan was the “New Miyazawa Plan” in October 1998, whose feature was financial cooperation in bilateral basis, not aiming for establishing a regional mechanism.

Meanwhile, an institution that had potential to become regional mechanism for such cooperation emerged: the ASEAN Plus 3. After the inaugural, but not-too-significant in substance, summit held in November 1997, the ASEAN Plus 3 process began to roll quickly. At the second summit in December 1998, the then Japanese Prime Minister Keizo Obuchi emphasised Japan’s willingness to commit itself to the recovery of Asian economies, announcing a plan aimed at boosting human resources in East Asia and promoting exchanges between Japan and ASEAN countries, worth $500 million. At the third summit in December 1999, leaders agreed to make the meeting permanent and the eight areas for the ASEAN Plus 3 cooperation were identified in the Joint Statement that included economy, currency and finance, human resource development and development cooperation. In 2000, the ASEAN Plus 3 process developed rapidly than ever: agreeing on the “Chiang Mai Initiative” that is a network of bilateral currency swap arrangements among East Asian countries; setting the priorities for economic cooperation on information and communication technology, SMEs and trade/investment, and; agreeing on the establishment of working group to study the ASEAN Plus 3 FTA. At the summit in 2000, Prime Minister Mori raised three principles that Japan considered suitable for the ASEAN Plus 3 process: building partnership; enhancing the ASEAN Plus 3 as a framework for regional cooperation to complement the global system, and; expanding cooperation among 13 countries to various fields, including political/security. In 2001, the process looks to have started yielding concrete fruits, as the bilateral currency swap arrangements between Japan and Korea, Thailand, Malaysia, the Philippines and China set to be signed.

In short, after only four years since the first summit meeting, the ASEAN Plus 3 process now covers not only cooperation in international finance area from where it started, but also trying to engage in other areas like international and regional trade, information and communication technology, human resource development, SMEs and even political/security. To accommodate the increasing number of subjects, the institution has been expanding. In addition to the summit, the ASEAN Plus 3 process now boasts annual meetings of Economic, Foreign, Labour and Agricultural Ministers, as well as the senior officials level meeting called East Asia Study Group to coordinate the cooperation agenda. 

The Policy Objectives of Japan

As the process evolved, Japan’s policy objectives for the ASEAN Plus 3 seem to have been evolving, too. They can be summarised as follows: 

•        The original motive for a regional financial mechanism has started to materialise. Though China’s initial response to the AMF proposal was negative arguing that not to devaluate its currency was the best contribution it could make, a network of swap arrangements among the 13 countries, or at least a part of it, is in the making.

•          The ASEAN Plus 3 provides the framework where Japan can actively set the cooperation agenda. So far, the ASEAN Plus 3 process has been led by the “Plus 3” part, not like the ASEAN Dialogue Partnership or the ASEAN Post Ministerial Conference framework.

•          In Japan, the ASEAN Plus 3 FTA is expected to remain as one of the options for the future, since most of the participants are competing severely in the global market and the “Plus 3” part, especially Japan, have problems in liberalising their agricultural, fishery and forestry sectors, in which developing members have interests.

•          The “Plus 3” part of the process is also valuable for Japan, as the relations with China and Korea are very important but sometimes problematic. Annual meetings of the Plus 3 provide a good opportunity to build good relations with them. Furthermore, it is important to note that the inclusion of political/security cooperation in the agenda was proposed by Japan. I believe that Japan has intention to utilise the ASEAN Plus 3 framework to deal with regional issues outside of the current participants, such as North Korea and Taiwan, as well as internal confidence building.

•          The ASEAN Plus 3 is an important tool to engage China as a constructive and cooperative member of East Asia, both in political and economic sense. This notion is shared between Japan and ASEAN and intensive consultations for this purpose is essential.

 How and Where the ASEAN Plus 3 Fits in? 

There are several institutions in the region already in existence that have overlapping functions with the ASEAN Plus 3, like ASEAN itself, APEC and ARF. Though how the ASEAN Plus 3 process should co-exist has not yet been much discussed, I think it is important to do so because the close cooperation (or networking) with existing institutions will strengthen the function of the ASEAN Plus 3.

           It is not effective, thus not desirable, for the ASEAN Plus 3 just to remain as a East Asian mechanism for the purpose of it. Since the process covers a wide range of cooperation agenda, collaborating with other international/regional institutions with specific functions, and even trying to create a wider regional momentum by leading them to collaborate, will help achieve the objectives of the ASEAN Plus 3. For instance, the Chiang Mai Initiative is already a collaborative work with the IMF and the ASEAN Plus 3 FTA, if formed, will have to be consistent with the GATT/WTO and APEC principles (Kikuchi [2001]). ICT, SMEs and other economic and technical cooperation are in line with the APEC Ecotech activities so that the collaboration with APEC in these areas would enhance the ASEAN Plus 3 work to greater effect.

           This discussion leads to the question of participants in the ASEAN Plus 3 process. It is desirable to allow wider participants in agenda by agenda basis, in economic cooperation areas in particular. As Dr Supachai of Thailand stated, the “East Asian Economic Zone” concept should not be confined to the ASEAN Plus 3. There are not strong reasons to disallow the participation of able and willing countries that locate outside of Northeast and Southeast Asia, such as India, Australia and New Zealand, in areas like development cooperation. In addition, if associated with APEC activities, the politically sensitive question of Taiwan’s participation may be solved, at least in the areas of economic cooperation.

Reference 

Kikuchi, Tsutomu (2001), “Higashi Azia Chiiki Shugi no Kanousei” (The Possibility of East Asian Regionalism), Kokusai Mondai (International Affairs), No. 494, May.