Chapter 5

Relations with the Rest

of the World
1. challenges
ASEAN 2. directions of development

One of ASEAN’s strengths is not just its willingness but its

assiduous endeavours to link up with countries and organiza-
tions that can contribute to its development and security and
to those of its member-states. ASEAN has taken this position
despite its clear intention, at the time of its founding, to loosen
its involvement in the quarrels of the big powers and to avoid
being an arena for the conflicts of others. At the same time,
despite its move to deal with others as a group, ASEAN has been
pragmatic and flexible enough to take into consideration the
quan hệ song phuong
individual members’ particular interests in bilateral security and
economic relations with other countries. On the other hand,
ASEAN’s strategic location, resource endowments, economic-
đoàn kết thống nhất
growth trajectory, emerging political solidarity, and openness
to the outside world have attracted the interest of the world’s
major powers. intra-state ( Southeast Asia)__continental (ASIA)__International

THE DIALOGUE SYSTEM

From the start, ASEAN’s external relations have been driven
by both political and economic motives. The first relationship
that ASEAN entered into, appropriately enough, was with the

79
80 ASEAN

European Economic Community (EEC), in 1973, when ASEAN

and the EEC began to conduct an “informal dialogue”. (Some
date the formalization of the ASEAN-EEC relationship in 1977.)
As ASEAN ministers noted then, it was right that the associa-
tion should engage in a dialogue with another regional group,
the most advanced among the world’s regional associations.
To them, a relationship with Brussels also meant an important
mark of international recognition. In practical terms, ASEAN
used the dialogue with the EEC as a vehicle for seeking access
for the member-countries’ products to the lucrative European
market, promoting European investments in ASEAN, and
attracting development assistance to the member-states. However,
the political benefits of the relationship have also been high
in ASEAN’s mind.
For its part, the European Union (EU) sees ASEAN as a
commercial and strategic link to the fast-rising East Asian region.
To reinforce its relationship with the association, the EU sup-
ports some ASEAN projects, particularly those having to do with
the environment, energy and regional economic integration.
EU and ASEAN ministers meet regularly for discussions on
international issues and on the relations between the two
groups. Since 1996, the EU member-states and Asian countries,
now including all ASEAN member-states, have been meeting
at the summit in the Asia Europe Meeting every two years.
This relationship is underpinned by the numerous cultural,
intellectual and people-to-people exchanges sponsored by the
Asia Europe Foundation, which was set up in 1997 and is
headquartered in Singapore.
In somewhat of a contrast, the relationship between
ASEAN as a group and Japan started with a specific economic
issue — the surge in Japan’s production and export of syn-
thetic rubber, which competed directly with Southeast Asia’s
Relations with the Rest of the World 81

exports of natural rubber, particularly Malaysia’s. ASEAN first

raised the issue with Japan in 1973, and its foreign ministers
took it up formally with their Japanese counterpart the next
year.
On Japan’s part, soon after the Pacific War, Tokyo had
once again looked to Southeast Asia as a source of minerals,
timber, crude oil, and other raw materials and as a market
for Japanese manufactured products, this time in peaceful
terms. In this light, Japan started to provide development
assistance to build the required infrastructure in Southeast
Asia and raise the purchasing power of its people. With
ASEAN showing signs of long-term viability and growing
political influence, Japan felt it increasingly necessary to
deal with ASEAN as a group and with Southeast Asia as a
region.
After its Prime Minister, Kakuei Tanaka, underwent the
unnerving experience of being threatened by anti-Japanese
mobs in Bangkok and Jakarta in January 1974, Japan decided
that it had to put its relationship with ASEAN in a broader
context so as to strengthen relations with Southeast Asia in
a more comprehensive way, generating goodwill as well as
markets. Those relations would have to encompass the political,
social and cultural, as well as the economic. Prime Minister
Takeo Fukuda articulated this decision in the “doctrine” that he
enunciated at the end of his tour of ASEAN countries, which
followed his summit meeting with their leaders in 1977. He had
been the first foreign leader, together with those of Australia
and New Zealand, to hold such a meeting with ASEAN as a
group.
The Fukuda Doctrine had three components:

• Japan’s commitment to peace and rejection of military

power;
82 ASEAN

• The consolidation of mutual confidence between Japan

and Southeast Asia on the basis of “‘heart-to-heart’
understanding”;
• Equal partnership with ASEAN and its member-countries,
support for their “efforts to strengthen their solidarity and
resilience”, and “mutual understanding” with the nations
of Indochina.

Evidently, the Japanese intended to dispel any notion of

Japan as a military threat, stress the importance of cultural and
people-to-people relations with the Southeast Asian countries, and
give assurances of Japan’s support for ASEAN as an association
while reaching out to the new regimes in Indochina. Since then,
succeeding Japanese Prime Ministers have frequently invoked
the Fukuda Doctrine, basing on it their respective initiatives
for strengthening the overall relationship between ASEAN and
Japan. Starting with Fukuda’s 1977 swing around Southeast
Asia, each Prime Minister has made the rounds of the ASEAN
countries early in his incumbency.
Aside from being those countries’ leading or second trading
partner, Japan has been by far the region’s primary source
of official development assistance, whether for its individual
members or for ASEAN as a group, with the assistance going
into infrastructure, human resource development, and institu-
tional capacity building. It has been at the forefront of countries
extending emergency help to ASEAN nations stricken by
disasters. Japan has been an important source of support for
the development of the Greater Mekong Sub-region, directly or
through the Asian Development Bank.
After the revaluation of the yen pursuant to the Plaza
Accord of 1985, Japan began encouraging firms to relocate their
operations to Southeast Asia, substantially contributing to the
region’s industrialization. Similarly, Tokyo promoted Japanese
Relations with the Rest of the World 83

tourism to Southeast Asia as part of its attempt to redress its

trade surpluses with the rest of the world. Following the Asian
financial crisis of 1997–98, it led regional efforts to recover
from the crisis and prevent its recurrence, proposing an Asian
Monetary Fund, a move, however, that was rebuffed by the
United States. Japan has served as the anchor for the network
of bilateral currency swap and repurchase agreements that is
meant to discourage speculation on the region’s currencies. It
has lent its considerable economic weight to the other measures
to stabilize the regional economy taken under the so-called
Chiang Mai Initiative (CMI) of the ASEAN Plus Three process.
The CMI will be discussed in further detail below.
Established in 1981, the ASEAN Center in the heart of Tokyo
promotes ASEAN exports in Japan and Japanese investments
and tourism in ASEAN. Japan finances the Center to the extent
of 90 per cent, with the balance of 10 per cent shared equally
by ASEAN’s member-states. Japan has also been supporting
youth and cultural exchange programmes, including the ASEAN
Cultural Fund, a scholarship programme for ASEAN students,
the Friendship Programme for the 21st Century, the Ship for
Southeast Asian Youth, and the Solidarity Fund in the ASEAN
Foundation.
With Europe and Japan recognizing ASEAN’s value and
establishing “dialogues” with it, Australia, seeking to strengthen
its links with Asia, followed suit in 1974, and New Zealand
in 1975. Chastened by its tragedy in Vietnam but continuing
to maintain considerable interests in Asia, the United States
entered into a Dialogue relationship with ASEAN in 1977. So
did Canada.
Australia was the first individual country to be an ASEAN
Dialogue Partner, the first to discuss economic cooperation
projects as well as trade issues with ASEAN. An ASEAN-Australia
84 ASEAN

Forum manages the projects, which are quite concrete and

pragmatic and come in phases covering several years each.
Australia has a clear interest in close relations with ASEAN,
which Canberra sees as an avenue for its engagement with
Southeast Asia, an additional platform for its ties with East
Asia, and the hub of East Asian and Asia-Pacific regionalism.
New Zealand’s Prime Minister met with ASEAN’s heads of
government on the occasion of the second ASEAN Summit in
Kuala Lumpur in 1977, together with those of Australia and
Japan. Although it is a small country with a relatively small
economy, New Zealand exploits its strengths — specifically, in
alternative sources of energy and in forestry — in its develop-
ment cooperation with ASEAN. Wellington has been active
in supporting capacity building in the newer members of
ASEAN.
By virtue of its extensive trade, investment and tourism
links with ASEAN’s member-countries and of its economic heft,
military power and political influence, the United States is one
of ASEAN’s indispensable Dialogue Partners. Its ties with the
U.S. provide ASEAN with broader strategic options beyond East
Asia. The U.S. has always been a prominent participant in the
Post-Ministerial Conferences and the ASEAN Regional Forum.
Exchanges of views on security and strategic issues between
ASEAN and the U.S. — leaders, ministers, officials, academics
— are extremely valuable.
Contrary to perceptions shaped by the mass media,
Washington’s ties with Southeast Asia as a region and ASEAN
as a regional entity have intensified under the George W. Bush
administration, particularly in support of ASEAN’s economic
integration. President Bush met with the leaders of the ASEAN
members of APEC on the occasion of the APEC Economic Leaders
Meetings in Los Cabos, Mexico, in 2002, and at subsequent
Relations with the Rest of the World 85

such meetings. The Joint Vision Statement on the ASEAN-U.S.

Enhanced Partnership, which was issued in Washington and in
all ASEAN capitals in 2005, followed by a Plan of Action, set
the direction of ASEAN-U.S. relations in the future. The ASEAN
Cooperation Programme, initiated in 2002, places ASEAN-U.S.
development cooperation within a coherent framework, which
encompasses the ASEAN-U.S. Technical Assistance and Training
Facility. A regional aid office has been set up in Bangkok. An
ASEAN liaison officer has been assigned to the U.S. embassy in
Jakarta, and the future appointment of a U.S. ambassador to
ASEAN has been announced. Specialists from the U.S. have
worked in the ASEAN Secretariat. ASEAN senior officials have
met with their U.S. counterparts in Washington and been
received at Cabinet level in the U.S. capital.
With a membership of more than a hundred of the U.S.
leading corporations, the US-ASEAN Business Council has been
the primary advocate of strong U.S. links with ASEAN and art-
iculates American business interests in Southeast Asia, includ-
ing contacts with the economic, finance, transport and other
ASEAN ministerial bodies.
Canada was one of ASEAN’s first six Dialogue Partners,
being at that time one of the few developed, market economies.
However, trade and investment flows between ASEAN and
Canada have been rather thin. Based on the ASEAN-Canada
Economic Agreement, development cooperation focused on
forestry, human resource development, fisheries, energy, agricul-
ture, transportation and communications. Active cooperation was
interrupted in 1997 on account of Canada’s refusal to have any
dealings with Myanmar and to extend assistance to Brunei
Darussalam and Singapore. It was resumed in 2004.
The United Nations Development Programme became an
ASEAN Dialogue Partner in 1977, but it is a special case, being
86 ASEAN

the only international agency in the Dialogue system. It

occasionally takes part in limited segments of ASEAN’s Post-
Ministerial Conferences. With ASEAN assuming the status of
UN observer in December 2006, consideration is being given
to conferring Dialogue Partner status on the UN itself.
Although strategic considerations were never far from
their minds, the ASEAN countries, before the 1990s, used the
Dialogues as a venue for gaining access for their products,
which were at the time mostly commodities, to developed-
country markets, protecting those products from synthetic
competition or releases from strategic stockpiles, encouraging
investments in ASEAN countries, and drawing development
assistance to them. Thus, for about a decade and a half, the
Dialogue system was limited to the ASEAN countries’ major
trading partners and sources of investments and development
aid, that is, the developed world — Australia, Canada, the
European Community, Japan, New Zealand and the United
States — plus the UNDP. It was not until 1991 that ASEAN
added a new Dialogue Partner — South Korea, which was tech-
nically a developing country but had become highly industrial-
ised and acquired many of the characteristics of a developed
economy. ASEAN also used the Dialogue process to gain
international support for its diplomatic positions, such as on
the Cambodian situation of the 1980s and on the Indochinese
asylum-seekers.
For their part, the Dialogue Partners have been driven mostly
by political as well as economic motives in their relations with
ASEAN. They use ASEAN mainly to strengthen their presence
in the region, to maintain a voice in developments there, and,
on the part of those from outside the region, as an additional
political and economic link to East Asia as a whole. For the
Dialogue Partners, ASEAN has served the useful purpose of
Relations with the Rest of the World 87

giving a regional, political dimension to their relations with

Southeast Asia, which is strategically and economically important
to them. Thus, for both ASEAN and the Dialogue Partners,
the Dialogue system has a mixture of political and economic
components, the proportions of which have varied with each
ASEAN country, with each Dialogue Partner, and from time to
time.
Having sought a Dialogue Partnership with ASEAN as early
as 1982, South Korea became an ASEAN Dialogue Partner in
1991. Since then, Seoul has been crisp and business-like in
its approach to development cooperation with ASEAN, which
has included economic and technical assistance, especially for
the newer ASEAN members, environmental protection, and
youth and cultural exchanges. It was, under President Kim Dae
Jung, at the forefront of the development of the ASEAN Plus
Three process.
As the political element in the Dialogues grew in the 1990s,
ASEAN considered it useful to bring China, India and Russia
into the Dialogue system. The three countries were deemed to
have important strategic roles to play in East Asia. Moreover,
their economies were surging, albeit at different paces and
in different ways. They became ASEAN Dialogue Partners in
1996.
Since their collaboration on the Cambodian conflict in the
1980s and its eventual political settlement, the relationship
between ASEAN and China has been the fastest to develop
among the ASEAN Dialogue Partnerships. Even before China
formally entered the Dialogue system in 1996, the ASEAN-
China relationship had started to grow rapidly, with joint com-
mittees on trade and economic cooperation and on science and
technology being set up in 1994 and a regular political consulta-
tive forum of senior foreign ministry officials being launched
88 ASEAN

in 1995. China was a founding participant in the ASEAN

Regional Forum and was the first Dialogue Partner to accede
to the Treaty of Amity and Cooperation in Southeast Asia. On
the jurisdictional disputes that China has with four ASEAN
members in the South China Sea, Beijing, faced with deter-
mined ASEAN solidarity on the issue, altered its posture from
its insistence on dealing with the ASEAN claimants individually
to discussing the matter with ASEAN as a group. The process
resulted in the 2002 Declaration on the Conduct of Parties in
the South China Sea, an informal code of conduct committing
all parties not to resort to force, exercise self-restraint, and
refrain from moving into unoccupied land features in the South
China Sea.
With the death of Mao Zedong in 1976 and the rout of
the radical Maoist faction in the Chinese leadership, Beijing,
under Deng Xiaoping’s leadership, reformed China’s economy
and opened it to the world. Aside from resulting in that
economy’s spectacular growth, China’s economic reforms
eventually opened new opportunities for its Southeast Asian
neighbours. ASEAN and China have reinforced market forces
by entering into agreements that provide policy frameworks
for their rapidly growing trade and investment links. The
centrepiece is the ASEAN-China Framework Agreement on
Comprehensive Economic Cooperation, signed in 2002. Pur-
suant to this, agreements on trade in goods, trade in services,
and a dispute-settlement mechanism have been concluded, with
the investment component still being negotiated. Besides
liberalizing and promoting trade and investments between them
and laying down agreed rules for them, these policy frame-
works send signals to ASEAN and China’s officials and business
people affirming the importance of their countries to each
other and strengthen the political ties between them. China
Relations with the Rest of the World 89

also organizes an annual China-ASEAN EXPO in Nanning, the

Chinese provincial capital closest to Southeast Asia. China has
agreed to set up an ASEAN-China Centre for Trade, Investments
and Tourism similar to the long-standing such center in
Tokyo.
India almost became an ASEAN Dialogue Partner as early as
1980. It would have been the first developing country to do so.
However, ASEAN and India found themselves on opposite sides
of the Cambodian conflict in the 1980s, and the Dialogue
Partnership was held in abeyance. After the settlement of the
Cambodian problem, and with India undertaking reforms in its
economy and opening it up, India finally entered the ASEAN
Dialogue system in 1996, together with China and Russia, and
started participating in the ASEAN Regional Forum.
ASEAN’s interest in India arises from the strategic role that
New Delhi plays in Asian and global affairs. For countries like
Singapore and Malaysia, India also represents a rapidly grow-
ing market and a potential investment destination. Within the
framework of the Dialogue relationship, ASEAN and India have
been cooperating largely on the basis of India’s strengths in the
biological sciences, information technology, pharmaceuticals,
small and medium enterprises, and human resource develop-
ment in general.
In 2002, on the occasion of the ASEAN Summit in Phnom
Penh, the ASEAN leaders met with India’s Prime Minister for
their first summit. The ASEAN-India summit has been held
annually ever since. Pursuant to the 2003 Framework Agree-
ment on Comprehensive Economic Cooperation, ASEAN and
India are negotiating a free trade area agreement.
After the Russian Federation’s emergence from the break-
up of the Soviet Union and following the settlement of the
Cambodian problem, ASEAN and Moscow began to look at
90 ASEAN

each other with interest. Despite its diminished size, Russia

has remained a power to reckon with in world affairs. It is a
nuclear-weapon state that is a permanent member of the United
Nations Security Council. An important factor in the Middle
East, Russia is a member of the Quartet that is nudging the
Israel-Palestine peace process along. It takes part in the Six-Party
Talks on the nuclear problem in North Korea. Russia considers
itself as an Asian power, with a robust military presence, notably
of its Navy. It is in partnership with China and four Central
Asian states in the Shanghai Cooperation Organization, which
has conducted joint military exercises. It has been admitted to
the Asian Cooperation Dialogue, a loose forum of nations in a
region stretching from Central Asia to East Asia.
Russia has enormous energy resources, from which it has
considerably bolstered its financial power as a result of soaring
energy prices. It has made significant advances in certain
sectors of science and technology. Nevertheless, ASEAN does
not consider its relations with Russia substantive enough to
merit Moscow’s inclusion in the East Asia Summit. It was for
its strategic importance that Russia became an ASEAN Dialogue
Partner in 1996 and was a founding participant in the ASEAN
Regional Forum.

THE POST-MINISTERIAL CONFERENCES

For more than 25 years, the dialogues have been consolidated
in gatherings at the ministerial level. The ASEAN foreign min-
isters invited their Japanese counterpart to meet with them
on the occasion of the 1978 ASEAN Ministerial Meeting to
discuss ways of following through on the decisions at the
ASEAN-Japan Summit of 1977. The next year, the United States,
Australia, New Zealand and the European Community expressed
Relations with the Rest of the World 91

their interest in also meeting with ASEAN, particularly in the

light of Vietnam’s incursion into Cambodia and the continuing
problem of Indochinese asylum-seekers. Such meetings, includ-
ing Canada and, later, the four additional Dialogue Partners,
have been convened annually since then. They have been
taking place immediately after the annual ASEAN Ministerial
Meetings; hence, they are called the Post-Ministerial Conferences.
In these conferences, ASEAN engages its Dialogue Partners,
together and individually, in discussions of global and regional
issues and initiatives for regional cooperation. At the “working
lunch” among ASEAN and its ten Dialogue Partners in August
2007, for example, they discussed the situation on the Korean
peninsula and the threat of climate change. In addition, forums
and joint committees are convened between ASEAN officials
and those of each Dialogue Partner for more detailed dis-
cussions of the issues and for decisions on specific cooperative
projects and other activities. In recent years, “comprehensive
partnership agreements” have been adopted with three- to
five-year plans of action to set the direction of most Dialogue
Partnerships.

FREE TRADE AREAS AND ECONOMIC

PARTNERSHIPS
ASEAN has been at various stages of negotiating and con-
cluding free trade area (FTA) or “comprehensive economic
partnership” (CEP) arrangements with China, South Korea, India,
Japan, and Australia and New Zealand. These arrangements are
expressly intended to reduce or remove obstacles to trade and
investments and facilitate them. In some cases, they include
technical assistance for the ASEAN parties that need them. Just
as or even more importantly, the FTA or CEP arrangements
92 ASEAN

are politically considered as hallmarks of close relations with

ASEAN.
Of these, the arrangement with China is the most ad-
vanced. In accordance with the 2002 ASEAN-China Frame-
work Agreement on Comprehensive Economic Cooperation,
agreements on trade in goods and on a dispute-settlement
mechanism were concluded in 2004 and a framework agreement
on trade in services was signed in 2007. As of this writing,
the investments component is still under negotiation. Similarly,
pursuant to a 2005 comprehensive agreement, ASEAN and
South Korea concluded the trade-in-goods component in 2006
(minus Thailand on account of continuing disputes over agri-
cultural trade) and established a dispute-settlement mechanism.
An agreement on services was signed in 2007, with the invest-
ments component to follow. ASEAN and India are still struggling
in their own negotiations, primarily over the pace of tariff
reductions and India’s reluctance to free up trade in agriculture.
ASEAN’s negotiations with Australia and New Zealand together
have been taking the longest time but are also the most
comprehensive, prominently including technical assistance
and capacity building, which are to some extent already being
carried out.
In November 2007, ASEAN and Japan concluded negotia-
tions on a Comprehensive Economic Partnership Agreement,
scheduled for signing in 2008. In the meantime, Japan had
been concluding “economic partnership” agreements with
individual ASEAN countries — so far, with Singapore, Malaysia,
the Philippines, Indonesia, Thailand and Brunei Darussalam.
ASEAN and the United States have entered into a broad Trade
and Investment Framework Arrangement, in the context of
which the U.S. would negotiate free-trade agreements with
individual ASEAN members. The U.S. has concluded such an
Relations with the Rest of the World 93

agreement with Singapore and has started negotiating one with

Malaysia. Similar negotiations with Thailand are in abeyance.
ASEAN and the European Union have started negotiations
on a free-trade agreement, with the EU insisting that only a
comprehensive agreement including services and investments
makes sense and ASEAN preferring initially to negotiate only
on trade in goods.
Aside from easing trade and investment flows between the
parties, the negotiation, conclusion and implementation of free-
trade or comprehensive-partnership agreements serve to clarify
economic issues between them. They can be used as platforms
for the launch of domestic reforms that would be necessary not
only by virtue of the demands of the agreements themselves
but also for the overall competitiveness of the economies con-
cerned. They highlight for the business community of one party
the opportunities offered by the other. Not least, a free-trade
or comprehensive-partnership agreement sends a signal of the
importance in which the two parties hold their overall relation-
ship with each other.

THE ASEAN REGIONAL FORUM

By the early 1990s, the political importance of the Dialogues
intensified as a result of the altered configuration of the strategic
situation following the end of the Cold War, the reforms in
China, and, in Southeast Asia, the settlement of the Cambodian
problem. Accordingly, at the ASEAN Summit of January 1992,
its leaders directed ASEAN to “intensify its external dialogues
in political and security matters by using the ASEAN Post
Ministerial Conferences”. Senior officials of ASEAN and its
Dialogue Partners met in Singapore in May 1993 to discuss how
to carry out this mandate. With Vietnam not yet an ASEAN
94 ASEAN

member and China and Russia not yet in the Dialogue system,
it soon became quite clear that regional security could not be
fruitfully discussed without their participation.
Accordingly, after an informal meeting among ministers in
July 1993, ASEAN invited not only its Dialogue Partners but
also others to a gathering called the ASEAN Regional Forum
(ARF) on the occasion of the annual ASEAN Ministerial Meeting
in Bangkok in mid-1994. The others were China and Russia,
categorized in ASEAN’s usual creative and pragmatic way as
“consultative partners”; Papua New Guinea, an observer in
ASEAN since 1976; and Laos and Vietnam, at the time ASEAN
observers on the way to membership.
Together with Myanmar, India took part in the ARF min-
isterial meeting for the first time in 1996, the year of its entry
into the ASEAN Dialogue system. A year earlier, Cambodia
had joined the ARF, having become, like Myanmar, an ASEAN
observer on the way to full membership. Mongolia was
admitted into the forum in 1999, North Korea in 2000, Pakistan
in 2004, Timor-Leste in 2005, Bangladesh in 2006, and Sri
Lanka in 2007, increasing ARF participation to 27 as of mid-
2007. Inevitably, with the entry of four countries from South
Asia, the ARF’s “footprint” is bound to expand beyond the
Asia-Pacific.
The ARF is discussed more extensively in Chapter 2.

TREATY OF AMITY AND COOPERATION

At the first ASEAN Summit in February 1976, the ASEAN leaders
signed the Treaty of Amity and Cooperation in Southeast Asia,
which embodies Southeast Asia’s commitment to its norms
for inter-state relations — the rejection of the use or threat of
force, the peaceful settlement of inter-state disputes, and non-
Relations with the Rest of the World 95

interference in others’ internal affairs. Subsequent ASEAN mem-

bers had to sign on to the treaty. After the signatories amended
the treaty in 1987 to allow non-regional states to accede to it,
Papua New Guinea did so in 1989, China and India in 2003,
Japan and Pakistan in July 2004, South Korea and Russia in
November 2004, New Zealand and Mongolia in July 2005,
Australia in December 2005, France and East Timor in January
2007, and Sri Lanka and Bangladesh in August 2007. By doing
so, these countries adopted the ASEAN norms for inter-state
relations. The European Union has reached a decision to be a
party to the treaty, with ASEAN sorting out the legal questions
surrounding the accession by a non-state party. The United
Kingdom has expressed an interest in acceding to the treaty.

ASEAN PLUS THREE

By the early 1990s, it had become evident to ASEAN that the
times were calling for a heightened relationship with its neigh-
bours in the north — China, Japan and South Korea. China’s
economy was continuing its extraordinary surge. Korea’s was
maintaining its dynamic industrial expansion. Japan remained
eager to play its role as Asia’s economic leader. At the same
time, the East Asian economy was becoming more integrated
in terms of trade and investment flows, so that today intra-
regional trade, as a percentage of total East Asian trade, is at
a higher level than that of the North American Free Trade
Agreement and approaching that in the European Union.
Moreover, promoting East Asian contacts would help manage
the tensions and potential conflicts in the relations among the
three Northeast Asian powers.
Malaysia’s Prime Minister, Dr. Mahathir Mohamad, gave
voice to his recognition of this when he proposed an East Asia
96 ASEAN

Economic Group in December 1990. However, the proposal did

not make much headway in ASEAN, partly because of a lack
of prior consultation within the association. It was not until
December 1997, in Kuala Lumpur, that East Asian regionalism
gained both visibility and momentum with the first summit of
ASEAN with China, Japan and Korea. Since then, ASEAN leaders
have met with their counterparts from the three Northeast
Asian countries every year, together and with each of them.
The process was called ASEAN Plus Three to signal its informal
nature and ASEAN’s leadership role in it. It would be presided
over by the ASEAN chair, and its summits would be held in
conjunction with the annual ASEAN Summit.
The ASEAN Plus Three process has been steadily expanding
into an increasing number of areas of cooperation. Until the
foreign ministers endorsed four new forums in July 2006, ASEAN
Plus Three had 16 active forums, almost all at the ministerial
level, undertaking activities and projects of varying degrees of
concreteness, at different stages of development, and in diverse
states of focus and coherence. These pertain to political and
security matters, trade and investment, agriculture, fisheries
and forestry, energy, the environment, tourism, transnational
crime, health, labour, culture and the arts, science and technol-
ogy, information and communications technology, social welfare,
youth, and rural development, as well as finance. No less than
48 mechanisms, not counting the ASEAN Secretariat, manage
and drive these activities and projects. The four new areas of
cooperation are rural development and poverty eradication,
women issues, disaster risk management and emergency response,
and minerals.
The leading, and perhaps most important, of ASEAN Plus
Three’s areas of cooperation is finance. This is most promin-
ently embodied in the Chiang Mai Initiative (CMI), which was
Relations with the Rest of the World 97

launched in 2000 to help East Asian nations recover from the

1997–98 financial crisis and, above all, prevent its recurrence.
Supported by the Asian Development Bank (ADB) as well as the
ASEAN Secretariat, the CMI has several components. One is a
system for conducting, at the ministerial and senior officials’
levels, the collective surveillance and review of the regional
economy, a measure for avoiding surprises like that sprung by
the financial crisis. Another is the enlargement of the ASEAN
Swap Arrangement to include all ten ASEAN members and
to a value of US$2 billion. Another is a network of bilateral
currency swap and repurchase agreements under which each
of the parties would make available foreign exchange to the
other party in the arrangement should the latter find itself
in a serious balance-of-payments problem. The total value of
the 16 arrangements agreed upon so far amounts to some
US$80 billion. The system is being gradually “multilateralized”,
that is, consolidated and subjected to collective decision. While
some economists consider the amount involved as too small
to make any difference in an actual financial crisis, the very
existence of the network of swap arrangements, with Japan at
its core and the ADB backstopping it, could discourage currency
speculation and bring an added measure of financial stability
to the region. ASEAN Plus Three has also launched the Asian
Bond Market Initiative, which is intended to use East Asia’s
enormous savings for investments in East Asia, and is exploring
ways of coordinating exchange rates.
Beyond these areas of practical cooperation, the ASEAN
Plus Three process serves a number of strategic purposes. It
provides forums, including the annual summits, for building
confidence among the countries of East Asia and a political
framework for the growing linkages between the economies
of Southeast and Northeast Asia. Not least, ASEAN Plus Three
98 ASEAN

offers an additional venue for informal contacts among China,

Japan and Korea.

THE EAST ASIA SUMMIT

At the second ASEAN Plus Three Summit, in 1998, President Kim
Dae Jung of the Republic of Korea proposed the establishment
of an East Asia Vision Group (EAVG) of “eminent intellectuals”
to recommend ways of developing an East Asian community.
The 2000 ASEAN Plus Three Summit appointed an East Asia
Study Group (EASG) of senior officials and the ASEAN Secretary-
General to assess the EAVG recommendations.
One of the long-term recommendations was for the estab-
lishment of an East Asia Summit. Although neither the EAVG nor
the EASG envisioned this to happen anytime soon, the ASEAN
Summit of 2004 decided to convene the East Asia Summit in
conjunction with the ASEAN and ASEAN Plus Three Summits in
Kuala Lumpur in 2005. The ASEAN Plus Three leaders quickly
supported the ASEAN decision, apparently without the issue
of participation being settled. That issue was basically one of
whether to limit EAS participation to ASEAN Plus Three or to
include other states in it.
ASEAN was divided on the question. Some member-states
wanted to restrict it to ASEAN Plus Three as, it seems, originally
intended. Others preferred the broader participation, initially
to include ASEAN’s next circle of important neighbours. In
answer to a question after his Singapore Lecture in February
2005, President Susilo Bambang Yudhoyono stated Indonesia’s
desire for the inclusion of Australia, India and New Zealand in
the EAS. Singapore had signaled a similar preference. A larger
EAS would in certain ways provide value beyond ASEAN Plus
Three, bring Australia, India and New Zealand into cooperative
Relations with the Rest of the World 99

endeavours to which they could usefully contribute, and signal

ASEAN’s open-ended desire to engage the international com-
munity beyond East Asia. Australia, India and New Zealand
were increasingly linked to East Asia, particularly economically.
Indeed, ASEAN was already having annual summit meetings
with India, while Australia and New Zealand had been holding
intensive talks with ASEAN on a “comprehensive economic
partnership” between the two groups.
The view favouring the broader participation in the EAS
ultimately prevailed, with the ASEAN foreign ministers agreeing
in April 2005 on three conditions for participation — the
status of full ASEAN Dialogue Partner, accession to the Treaty
of Amity and Cooperation in Southeast Asia, and substantive
relations with ASEAN. The first two criteria — Dialogue Partner
status and accession to the Treaty of Amity and Cooperation
— are objective enough. Australia and New Zealand have been
ASEAN Dialogue Partners since 1974 and 1975, respectively,
and India since 1996. India signed the treaty in October 2003,
New Zealand in July 2005. Australia had publicly denigrated
the treaty, but, faced with exclusion from the EAS, had to do
a policy turnaround and acceded to it in Kuala Lumpur, four
days before the first EAS.
In my paper “Russia, ASEAN and East Asia” in the ISEAS
publication, Russia-ASEAN Relations: New Directions, I noted,
“The third criterion — whether a prospective EAS participant
has ‘substantive’ relations with ASEAN — is more subjective.
Whereas the other two criteria are matters of fact, the third
is a matter of judgment and, therefore, of political decision.
If, for political reasons, an ASEAN member wished a Dialogue
Partner and treaty party to participate in the EAS, it could argue
that that country’s relations with ASEAN are ‘substantive’. On
the other hand, if another ASEAN member had an interest in
100 ASEAN

blocking that Dialogue Partner’s participation, it could claim

that the latter’s relations with ASEAN are not “substantive”
enough. In other words, as is usual in diplomacy, the political
decision determines the public argument rather than the other
way around.”
The distinction between the functions of ASEAN Plus
Three and the EAS remains fuzzy. The countries involved
have not sought to clarify it, apparently preferring to let each
forum evolve over time, with ASEAN at its core. Meanwhile,
there should be no reason why Australia, India and New
Zealand cannot join any of the cooperative endeavours of
ASEAN Plus Three if it would be in the interest of all
involved for them to do so. While the three EAS meetings so
far have been largely devoted to discussions of broad strategic
and economic issues, each of them did focus on a subject
of great significance for people in Asia and in the world —
the threat of an avian influenza pandemic in Kuala Lumpur
in December 2005, energy security in Cebu, the Philippines, in
January 2007, and “Energy, Environment, Climate Change and
Sustainable Development” in Singapore in November 2007.

CONCLUSIONS
The succession of frameworks that ASEAN has built over the
years for relating to other countries and regions has provided
political platforms for ASEAN to relate to the world’s devel-
oped countries and strategic powers and other significant
actors on the regional stage. It has, for example, helped to keep
the United States engaged in East Asia in constructive ways
and to provide the U.S., China and others with a benign
multilateral environment for developing their relations with
each other and with the rest of the region and other important
 Relations with the Rest of the World 101

parts of the world. The variety of those frameworks manifests

the flexibility and pragmatism of ASEAN’s approach to its
relations with others in the world.
At the same time, the external powers find ASEAN con-
venient as the convener and hub of regional forums for inter-
action, ASEAN being benign, harmless, neutral and made up
of no less than ten countries. The forums provide additional
venues for the external powers not only to engage ASEAN but
also to interact with each other bilaterally or in small groups,
as the three Northeast Asian powers do on the occasion of the
ASEAN Plus Three meetings. The free trade area and economic
partnership agreements that ASEAN has been concluding with
major partners are not only measures for promoting trade,
investments and other economic interactions. They also
express the intention of ASEAN and its partners to intensify their
relationships, send signals to their officials and peoples about
those relations, and indicate the direction of the partnerships
in the future. The negotiations leading to the agreements clarify
positions and concerns and enable the parties to identify and
reach common ground. Not least, the agreements require and
encourage reforms in domestic policy.
In order to derive maximum benefit from leading the process
cooperation
of East Asian and Asia-Pacific regionalism and enhance the
non-interference
solidarity effectiveness of its leadership role, ASEAN has to strengthen
peace/amity
its capacity to provide the intellectual impetus for the process.
This would require closer political cohesion, deeper economic
integration, as well as creativity, imagination and a keen sense
perpective
of the region’s long-term strategic interests. tầm nhìn chiến luoc
future development and suggestion