Asia's Turning Point: An Introduction to Asia's Dynamic Economies at the Dawn of the New Century

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Regional Integration and Prospects for the East Asian Community

For almost five postwar decades, regional integration in East Asia was off the agenda. In the 2000s, none of the region’s countries can work out its economic strategies outside the context of the integration process. Regional institutions have emerged, and the East Asian Community (EAC) idea is on the table.

The pro-integration drive is down to three major factors. First, economic interdependence in East Asia has been visibly boosted by rising intraregional trade and capital flows, deepening division of labor and production linkages, and an intensifying movement of people, among other things. This process is often called de facto integration.

The second factor is a growing sense of crisis about being outpaced by other regions, especially Europe and North America, in terms of the speed and intensity at which regional institutions have been created. Europe has the European Union (EU) and North America has the North American Free Trade Agreement (NAF TA) (not to mention the prospective Free Trade Area Americas (F TAA) which is to include both North and South American countries). Asia has no large-scale regional arrangement of this kind. Thus, apprehensions appear that the two big blocs will set world trade and other international economic rules, while Asian states will be left on the sidelines. They are especially strong in some Association of Southeast Asian Nations (ASEAN) countries, fearing the decline of their international ...