panel proposal: Political Economy of New Regionalism in East Asia

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Date Tue, 1 May 2007 11:33:43 +0800
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Panel Proposal for the Conference of the European Association for
Southeast Asian Studies (EuroSEAS), Naples, 12­15 September 2007

Deadline for abstracts/Paper proposals: 1 June 2007

Political Economy of New Regionalism in East Asia

Unlike the earlier phase of regional integration achieved by the
cross-border expansion of Japanese multi-layered subcontracting
networks, after the economic crisis of 1997-98, governments have
taken the lead in regional integration initially through the creation
of defensive mechanisms to insulate the regionšs economies from
speculative attacks on their currencies and to be able to better
protect their interests in international trade negotiations and
broadening it to include security arrangements. Whereas the United
States had earlier been included in the institutional frameworks of
regional integration such as the Asian Development Bank and the Asia-
Pacific Economic Cooperation to provide a counter-weight to China and
Japan, reflecting greater confidence, the new regional agreements
pointedly ignore the US. Nevertheless, access to the US market
remains critical to economic growth strategies and hence, Asian
states tend to repatriate the bulk of their export earnings back to
the US to maintain exchange rates.

In the decade since an economic crisis rocked the foundations of some
of the fastest growing economies in Asia, several initiatives have
led to a greater regional economic, political, and social
integration. In the first instance, reacting to the IMFšs imposition
of harsh conditions that deepened the impact of the crisis, several
East and South-East Asian states have created facilities to prevent
speculative attacks on their currencies and other forms of inter-
governmental cooperation in economic affairs. Recognizing that the
lack of bilateral trade agreements place them at a disadvantage in
international negotiations as European and American states can draw
on their own experiences in negotiating bilateral and regional trade
agreements, Asian states have begun to negotiate a series of
bilateral and pluri-lateral trade agreements.

These negotiations have involved China, Japan, South Korea, and to a
lesser extent Australia, India, and New Zealand. In the first
instance, these powers provide a counterbalance to each other and
hence the smaller South-East Asian states are shielded against
domination by any one big power. Chinašs voracious appetite for raw
materials and intermediate and capital goods has been a major engine
of regional economic growth. This is reflected in China also
peacefully resolving all its territorial disputes with neighboring
South-East Asian states and even beginning to conduct military
exercises with them as well as joining the Asian Regional Forum on
security. Closer economic and political ties have led to closer
social ties as well and now several Thai and Filipino politicians
emphasize their Chinese heritage.

The new regionalism in East Asia is formed by a number of different
processes, partially coordinated and coherent and partially
contradictory with one another. Regional integration is exploited as
an instrument to strengthen export potentials while creating
defensive mechanisms against the instability of international
markets. However, liberal trade agreements, and even more so
financial liberalization, clearly conflict with those state-led
economic strategies that have been central to the economic
development of the region. While the major schemes of regional
integration such as the EU and NAFTA have been major vehicle of
neoliberal economic principles and practices, the consequences of
East Asian regional integration in terms of economic policies at
national and regional level are still to be clearly understood.

Hence this panel explores the implications of regional integration in
the immediate future: given the greater role of governments in
regional integration, and long standing hostilities between them, are
the present patterns of regional integration likely to endure? Is it
possible that governments of the region will attempt to create a
regional monetary unit as part of an attempt to emancipate themselves
from a dependence on the US dollar? Will this be able to allow them
to invest their export earnings in their economies or neighboring
economies and thus lessen their dependence on the US market? Will
they be able to cooperate and establish their own industry standards
and thus act as a rule maker in world markets? Will the process of
regional integration allow Asian countries to maintain forms of state-
led economic development as an alternative to neoliberal globalization?

Prof. Pietro P. Masina, Dept of Social Sciences, University of Naples

Prof. Ravi A. Palat, Dept of Sociology, Binghamton University: