Fellows Speak

THE EAST ASIAN SUMMIT: Prospects of Economic Integration and Thorny Issues

By Bobby M. Tuazon*

The consensus to transform East Asia into a region of peace, economic cooperation, and partnership is now overshadowed by territorial rows in the South China Sea and elsewhere in the region. To underscore this point, the seventh East Asian summit held in Phnom Penh, Cambodia last Nov. 20 caught the attention of the foreign press not because of the new economic prospects that the one-day event tried to project but for the internal differences among some member-countries that dampened such spirit.

The latest East Asian summit hosted by Cambodian Prime Minister Hun Sen was attended by 18 member-countries – 10 ASEAN member-states, China, Japan, Republic of Korea, India, Australia, New Zealand, the United States, and Russia. Envisioned by Malaysia in 1991, the East Asian Summit (EAS) was first convened July 2005 in Laos initially with 16 members. The U.S. and Russia joined the summit in 2011.

With the Association of Southeast Asian Nations (ASEAN) serving as the driving force, EAS was conceived to advance member-countries’ economic and trade cooperation but it became a forum as well for other common issues. Indeed, the “Phnom Penh Declaration on the East Asia Summit Development Initiative” issued at the end of the summit reiterated the principles of dialogue and cooperation on wide-ranging strategic, security, and economic issues of common concern in order to promote “peace, stability, economic prosperity, and integration in East Asia.” Among others, the member-countries resolved to strengthen the global economic recovery – amid the lingering worldwide recession – as well as regional financial and energy cooperation.

To this end, the “Chairman’s Statement” manifested the member-countries’ renewed commitment “to avoid protectionist measures affecting trade and investment…and to refrain from raising new barriers to investment or trade in goods and services.” The statement also noted the progress in cooperation in six priorities – environment and energy, education, finance, global health issues and pandemic diseases, natural disaster mitigation, and ASEAN connectivity.

On a positive note, the 10 member-states of ASEAN as well as China, Australia, Japan, India, South Korea, and New Zealand agreed to start negotiation on a trade bloc to be known as the Regional Comprehensive Economic Partnership (RCEP). Fully supported by Chinese Premier Wen Jiabao, the new trade pact does not include the U.S. which has its own trade initiative in the region, the 11-nation Trans-Pacific Partnership (TPP), minus China. To kick off in 2015, the RCEP covers nearly half of the world’s population and involves the second and third biggest economies, China and Japan, as well as Asian powerhouse South Korea.

These developments, however, were sidelined by strong protests from the Philippines, Singapore, Brunei, Indonesia, and Vietnam over a communiqué drafted by host country Cambodia that cites a supposed “consensus” by the summit member-states not to “internationalize” the South China Sea territorial disputes. Denying that such “consensus” exists, Philippine President Benigno S. Aquino III emphasized the use of other multilateral approaches such as the UN Convention on the Law of the Sea (UNCLOS) to assert his country’s territorial claim on the Spratlys and other islands in the South China Sea. Expectedly, Premier Wen reiterated China’s historical claims on the disputed territories which constitute its “core interest” arguing – over the five countries’ call for a code of conduct – that previous declarations at East Asian summits had upheld free access and navigation in the South China Sea. Through the years, the Beijing government has taken a strong emphasis on bilateral rather than multilateral approaches to settling territorial claims.

Underplaying the maritime disputes, China is taking a strong stance to redouble efforts toward trade and economic cooperation and integration in the region with an underlying message that such a roadmap would help ease territorial tensions – or at least allow trade pacts to push through despite the rows. As a major player in the region, China aims to make economic integration and partnership as a centerpiece while member-countries of the EAS are locked in bitter territorial rows involving Japan and China over the Senkaku (Diaoyu) islands, South Korea and Japan over some islands in East China Sea, as well as border clashes between Cambodia and Thailand.

U.S. President Barack Obama, who also attended the summit, urged “restraint” on the territorial differences but repeated the call for “freedom of navigation.” Mr. Obama’s initiative, the 11-country TPP, is seen to rival China’s growing trade ties in the region especially in the light of the launching of the RCEP where Beijing is expected to be a major player. More to the point, Mr. Obama in a presidential debate prior to the Nov. 6 U.S. elections said that trade relations are being organized with countries excluding China so that Bejing “starts feeling more pressure about meeting basic international standards.”

The U.S. president’s presence at the summit – part of an Asian swing that also took him to Myanmar and Thailand – underpins a growing U.S. engagement in Asia as a center of global economic growth. Based on one estimate, by 2030 Asia will account for 49% of the global population, 43% of GDP, 35% of trade, and 38% of market capitalization. Explaining U.S.’ re-balancing diplomacy toward Asia – the so-called “Asian pivot” – Mr. Obama’s National Security Adviser Tom Donilon said “The U.S.’s rebalancing posture toward Asia…is a long-term effort to better position ourselves for the opportunities and challenges we’re most likely to face in the century.” More than a defense posture but deeper economic and political engagement - this essentially is what Donilon sought to convey.

However, in contrast to its trade initiatives in the region Washington’s defense posturing and re-balancing of military resources are being set in place faster and with greater visibility as to underscore a priority on enhancing American military supremacy and a containment strategy on China. This, as well as growing concerns about China’s defense spending – now the second biggest in the world – territorial disputes and other trans-border issues pose critical challenges to the region’s growing shared vision for integration and cooperation.

Clearly, economic integration and partnership remains a long shot and must overcome contentious issues, mutual suspicions, and provocations. Shifts in the internal politics among the region’s countries as well as hegemonic ambitions of certain powers will always affect regional economic initiatives.

What is important is to allow talks to remain open and the East Asian mechanism precisely serves this purpose. Consequently, it may be about time to allow Track-2 or Track-3 diplomacy to play a key role for it has been tested that where Track-1 diplomacy fails other roadmaps provided in the two alternative approaches become more effective.

*Re-posted by CenPEG from ASEAN Newsletter, November 2012.

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