The fragility of East Asian Regionalism

The paper argues that East Asian regionalism is fragile since (i) each nation’s industrial competitiveness depends on the smooth functioning of ‘Factory Asia’ – in particular on intra-regional trade; (ii) the unilateral tariff-cutting that created ‘Factory Asia’ is not subject to WTO discipline (bindings); (iii) there is no “top-level management” to substitute for WTO discipline, i.e. to ensure that bilateral trade tensions – tensions that are inevitable in East Asia – do not spillover into region-wide problems due to lack of cooperation and communication. This paper argues that the window of opportunity for East Asian ‘vision’ was missed; what East Asia needs now is ‘management’ not vision. East Asia should launch a “New East Asian Regional Management Effort” with a reinforced ASEAN+3 being the most likely candidate for the job. The first priority should be to bind the region’s unilateral tariff cuts in the WTO.