Research and Information System
for Developing Countries (RIS) organized a High-Level Conference
on ‘Asian Economic Integration: Agenda for the East
Asia Summit’ in collaboration with Institute of South
East Asian Studies (ISEAS), Singapore; and the Institute
of Developing Economies (IDE)/ JETRO, Tokyo, and supported
by Sasakawa Peace Foundation (SPF), Tokyo on 12-13 November
2007 in New Delhi. This was aimed at contributing to the
process of regional economic integration in Asia and to
provide inputs for the forthcoming Third East Asia Summit
(EAS) to be held in Singapore on 21st November 2007 with
leaders of 10 ASEAN countries, Japan, China, South Korea,
India, Australia and New Zealand.
The Conference was Sixth in
a series of High-Level Conferences on the subject launched
by RIS in March 2003 and conducted in collaboration with
other think-tanks in Asian countries. The previous Conferences
have been held in New Delhi (March 2003), Tokyo (November
2004), and Taiyuan, P.R. of China (September 2005), New
Delhi (November 2005) and Singapore (2006).
The Conference was inaugurated
by Shri Pranab Mukherjee, Hon’ble Minister of External
Affairs, Government of India at a session chaired by Dr
Arjun Sengupta, Member of Indian Parliament and Chairman,
RIS. Shri Jairam Ramesh, Hon’ble Minister of State
for Commerce and Industry delivered a valedictory address
at a session chaired by Ambassador Leela K. Ponappa, Vice-Chairperson,
RIS. The Final Agenda of the Conference is at Annex 1. The
External Affairs Minister in his inaugural address said
that ‘it is incumbent on us to put in place a political
and economic architecture which is conducive to Asia’s
emergence as a pre-eminent region of stability and prosperity’
adding that India was willing to work together with her
Asian neighbours to realize the aspirations and dreams to
make the 21st century truly the Asian century. He said that
creation of EAS was an important development in the direction
of building a cooperative architecture in Asia. Mr Ramesh
in his valedictory address added that India was deeply committed
to deeper engagement with the Asian countries.
The Conference was attended
by over 90 senior experts from think-tanks, policy makers,
business enterprises, media and other stakeholders from
different EAS countries. Among the notable think-tanks and
institutions represented at the conference besides the organizing
institutions namely RIS-India, ISEAS-Singapore, IDE/Jetro-Tokyo,
included: Philippine Institute for Development Studies,
Manila: New Zealand Institute of International Affairs,
Wellington; Korea Institute of International Economic Policy
(KIEP), Seoul; Shanxi University of Finance and Economics,
Taiyuan, P.R. of China, Hosei University, Tokyo; Chulalongkorn
University, Bangkok; Asian Development Bank, Manila; UN-ESCAP,
Bangkok; Council for Social Development; India-Japan Forum,
Centre for Research in Rural and Industrial Development,
Chandigarh; Confederation of Indian Industries, Exim Bank
of India; Japan External Trade Organization (JETRO), different
Indian Universities, government agencies, business enterprises,
among others.
This Note represents a summary record of
the discussion at the Conference.
The Conference deliberated
upon the economic, strategic and business perspectives on
the relevance of Asian economic integration in the EAS framework
and the specific issues concerning integration of trade
and investment regimes, and monetary and financial cooperation,
among other issues, against the background of emergence
of Asia as the new locomotive and an emerging centre of
gravity of the world economy. China and India are together
contributing nearly 40 per cent of global incremental output
now that has helped in reducing the dependence of the world
economy on the US as an engine of growth. The Asian economies
have also developed profound synergies that have helped
in expanding the intra-regional trade in Asia to more than
55 per cent. The new Asian dynamism and the emergence of
the Asian middle classes as a centre of final demand, and
the synergies make regional economic integration in Asia
a viable strategy.
In the recent years Asian countries
have begun to exploit the potential of regionalism for their
development. In particular ASEAN besides expediting their
own sub-regional economic integration have brought together
other major Asian economies as dialogue partners. A virtual
economic community is emerging from a complex web of FTAs
linking ASEAN and its six dialogue partners. However, these
FTAs remain sub-optimal as they fail to provide a seamless
regional market important for fuller exploitation of the
synergies for mutual benefit. The participants agreed that
a broader regional architecture was needed to complement
these initiatives.
In that context, the conference
welcomed the evolution of the EAS as an annual forum for
dialogue on regional issues bring together ASEAN10 and their
six dialogue partners viz. Japan, China, India, Korea, Australia
and New Zealand. At the Second EAS held in Cebu on 15th
January 2007, the Leaders decided to move forward on the
regional cooperation agenda in five select sectors, namely,
education, energy, natural disaster mitigation, avian flu,
and finance. They also launched a track-II feasibility study
of a Comprehensive Economic Partnership Arrangement of East
Asia (CEPEA) bringing together the 16 member countries of
EAS and endorsed establishment of a regional economic think-tank
called Economic Research Institute of ASEAN and East Asia
(ERIA).
The conference discussed rigorous
studies finding economic integration in EAS framework having
potential to bring about substantial economic gains to not
only the participating countries but also to the rest of
the world and these gains substantially exceed those emanating
in a less inclusive framework such as ASEAN+3. The prime
basis for such observations is the underlying economic logic
of expanded scope of economic complementarities inherent
in the EAS process, for instance, by bringing together software
and service-dominated economies with hardware and manufacturing-driven
economies in the Asian region or by combining the domestic
consumption driven dynamism in some countries with external-market
oriented ones across the EAS. The differential stages of
development among the members of EAS too provide for economic
opportunities in a complementary fashion for achieving developmental
objectives through regional economic integration.
The participants felt that
instead of diffusing the agenda to cover diverse issues,
EAS could concentrate on taking some visible concrete steps
towards economic integration. The deliberations in the conference
suggested some key priorities for the EAS process for creating
an institutional framework for promoting regional cooperation
in select areas as follows:
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Comprehensive
Economic Partnership Arrangement of East Asia (CEPEA)
as a framework agreement aiming to liberalize
tariff and non-tariff barriers to intra-regional trade
in goods and services and investments in phased manner
by 2020 accompanied by improving connectivity and
trade facilitation to cut trade costs, and economic
cooperation to narrow the development gaps. The ultimate
objective of CEPEA could be to provide a ‘seamless
market’ combining all the EAS participating
countries. CEPEA should be designed as an inclusive
framework to which additional Asian countries can
accede to, as and when they are ready, on a reciprocal
basis. However, as trade liberalization affects certain
vulnerable sections adversely, it needs to be have
provisions for safeguards for sensitive products,
livelihood security, special and differential treatment
for countries at different levels of development and
making CEPEA as a role model of economic integration
by balancing the objectives of ‘efficiency and
equity’. Care must be taken in designing the
programmes of regional economic integration in such
a manner that they keep equity, employment generation,
food and livelihood security, necessary social transformation
and social safety-nets for the vulnerable sections
of the society at their heart so that it is regionalism
with an ‘Asian Face’. |
| • |
Asian
Monetary and Financial Architecture (AMFA)
of EAS countries by building on the Chiang-Mai Initiative
and expanding it to cover all the EAS participants.
There was a consensus on the need for institutional
intermediation between growing foreign exchange reserves
of Asian countries and widening infrastructure deficits
in Asia and for funding the cross-country infrastructure.
There is a need to study whether such an institutional
intermediation could be provided by existing regional
institutions such as the Asian Development Bank. Among
other avenues for financial and monetary cooperation
include creation of an Asian Currency Unit (ACU) as
a unit of account for facilitating intra-regional
trade and exchange rate stability within the EAS region,
strengthening and development of Asian Bond Markets
and creation of an apex body of Asian Exim Banks.
EAS could also create a virtual EAS secretariat and
an EAS Caucus for coordinating their positions at
the global institutions. For facilitating regional
financial cooperation, EAS could consider creating
an annual meeting of EAS Finance Ministers and central
bank governors alongside the Economic Ministers’
Meetings. |
| • |
Cooperation
and Coordination among Networks of Asian Think-Tanks:
The conference agreed that intellectual cooperation
among Asian institutions and experts was the need
of the hour for promoting broader Asian regional cooperation.
Asian minds need to meet before the economies can.
The initiatives of regional cooperation need to be
effectively supported by networks of think-tanks of
EAS countries which could brain-storm on the policy
challenges for regional economic integration and provide
a road-map for the official processes. The Conference
agreed that the series of High-Level Conferences,
of which the present one is a part, have served a
useful purpose and should continue to be held in different
Asian capitals. The conference noted with appreciation
the setting up of ERIA, a regional policy think-tank,
to assist the process of regional cooperation. It
was hoped that in due course ERIA could reinforce
the networking of think-tanks on regional cooperation
issues besides contributing to capacity building in
EAS region in collaboration with the national think-tanks.
|
| •
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Institution
building for Educational, Cultural and Media Exchanges:
It was emphasized that social, cultural and
strategic dimensions are equally important as economic
ones if not more for the successful regionalism while
supporting the EAS dialogue on energy and climate
change related issues. Efforts are needed to build
an Asian identity, as Pandit Nehru had sought to do
sixty years ago by organizing the Asian Relations
Conference in 1947! EAS could take steps to promote
education, cultural and media exchanges to promote
people-to-people contacts, generate informed public
opinion on issues of developmental significance of
the region, allowing for an Asian identity or ‘Asianness’
or ‘One Asia’ to take hold for building
an Asia of tomorrow. Regional institution building
is important for developing an Asian identity.
|
The Conference felt that the
Report of the Conference should be submitted to Chair of
the EAS, namely, the Singapore government through the Institute
of South East Asian Studies (ISEAS), to the Japanese government
through IDE/JETRO, and to the Indian Government by RIS.
New Delhi
13 November 2007
