11-05-2025
Boosting Asean centrality
FOR too long, the Asean region has been policy-rich but institutionally poor. There is much to do with many policies for getting things done, but little by way of regional frameworks for doing them cohesively and comprehensively.
Asean itself emerged after failed attempts at indigenously-led regionalism: the Association of South-East Asia (Asa) and Maphilindo (Malaya, the Philip-pines, and Indonesia). Since then Asean has succeeded admirably, but it has always needed to do more.
This need is particularly clear in regional economics. For consecutive decades since Japan's economic miracle from the mid-1950s, East Asia, comprising North-East Asia and South-East Asia, has remained the world's most economically dynamic region.
Yet while Europe has the European Union and North America had Nafta (North American Free Trade Agreement) and now the United States-Mexico-Canada Agreement, East Asia has no equivalent regional economic organisation. Despite growing challenges to East Asia's legitimate interests, there is still no dedicated institution for better regional coordination, synergy, and representation of shared interests.
In December 1990 Malaysia's activist foreign and trade policies proposed an East Asia Economic Grouping (EAEG) comprising Asean countries and China, Japan, and South Korea. Conceived as 'a loose, consultative grouping', it was endorsed by most of the countries including China, but the US pressured Japan to stay out.
Without the EAEG, the 1997 Asian financial crisis devastated the region. A particularly stricken South Korea then strongly advocated reviving the EAEG's Asean Plus Three (APT) framework.
A slightly expanded version is Asean Plus Six (APS) which shares Asean centrality with the APT, but with Australia, New Zealand, and India. The APS is represented in the Asean-led Regional Compre-hensive Economic Partnership (RCEP), with India staying out for now.
Calls are now heard for reviving the EAEG to work alongside the RCEP. Each can have its own focus while contributing to Asean centrality, without any unnecessary duplication or redundancy.
Just as the 1997 Asian financial crisis had underscored the importance of the APT, rising US tariffs since 2018 can be a catalyst for the EAEG – it pays to turn economic adversity into greater prosperity instead.
East Asia's current circumstances are the best yet for reviving the EAEG. It had been an Asean idea that Malaysia gave voice to a generation ago, and it should remain as much an Asean-led initiative today.
Already, China, Japan, and South Korea are converging in North-East Asia. As expected, economics is the main theme for their convergence and the best means for overcoming their bilateral differences from a troubled history.
This growing intergovernmental cooperation is supported by industrial collaboration. Toyota China for example has begun using Chinese automobile technology in such areas as autonomous driving and battery powertrains.
The automobile sector is likely to see more regional collaboration, setting a trend for other sectors. After years of hesitation over electric vehicles (EVs) in which China is the world leader, Japan's Toyota Motor Corporation is proceeding in partnership with Chinese companies.
An EAEG integrating North-East and South-East Asia would help regional promise and productivity immeasurably. Asean is a trusted, neutral and non-threatening agency that can help boost common regional fortunes with better prospects of peace and stability.
The EAEG will be East Asia's first regional organisation if it materialises. From Asean at the core, an EAEG, the RCEP, and then the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) would form overlapping areas or concentric layers of trade cooperation to boost supply chain cohesiveness – with Asean centrality.
Regional supply chains and markets need to be robust, resilient and closely integrated if they are to survive external shocks. Business climates thrive on confidence and is threatened by anxiety and uncertainty.
Even the EU is revising its trade policies on China by improving relations, as a result of indiscriminate US tariffs. The East Asian region itself, comprising China and its neighbours, would be expected to do more.
Since 2020, China's 'dual circulation' economic strategy emphasises domestic consumption to help cope with shortfalls in overseas demand. It has also prioritised 'new productive forces' with technology as an economic multiplier. Other East Asian economies can learn useful lessons from China's experience. South-East Asia's import substitution model for example may need to be tweaked if not transcended entirely when sanctions and high tariffs threaten.
The immense benefits of closer regional integration include swift and seamless economic transitions in better protecting growth. China's size and vulnerability to foreign trade pressures have forced it to innovate considerably in economic policy, which can be instructive for other countries.
East Asia may now be hunkering down to develop greater regional cohesion as a defence against involuntary trade restrictions. A logical consequence would be dual circulation applied on a regional scale.
For years, successive US administrations have sought partisan support from South-East Asian countries, but a neutral Asean has refused to choose a side. Now the unwarranted and unwanted tariffs of April 2 may organically promote regional self-determination instead.
Bunn Nagara is Director and Senior Fellow at the BRI Caucus (Asia-Pacific), and Honorary Fellow at the Perak Academy. The views expressed here are solely the writer's own.
