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PASCN DP 2002-06: Torn Between Two Lovers: ASEAN and its Evolving Economic Relations with China and Japan

Last November, ASEAN Leaders met with the Chinese Premier in Brunei and endorsed a proposal for a Framework on Economic Cooperation and to establish a free trade area within the next ten years. Ahead of such an arrangement, the two sides agreed to explore the idea of an ?early harvest?, which will precede comprehensive market access negotiations on industrial goods and services between the two sides. And in early January 2002, Japan Prime Minister Junichiro Koizumi toured the Southeast Asian region and proposed the Initiative for Japan-ASEAN Comprehensive Economic Partnership. Koizumi hinted that a free trade arrangement could form part of this enhanced relationship. The Koizumi initiative has been viewed by not a few as a bid by Japan to counter China?s intensified dialogue with ASEAN members. Once fearing increasing irrelevance amidst developments in APEC, the WTO and other regional arrangements, ASEAN is suddenly thrust into limelight. These two initiatives compel its members to consider moving towards closer integration with the two of the biggest economies in the world. Indeed, the evolving economic relations between ASEAN and China and Japan directly impacts on the future of the ASEAN Free Trade Area, APEC, and the position of Asia in the world economy. This paper examines the developments behind these twin proposals, particularly taking the ASEAN perspective. This study will survey the various political, economic and strategic issues that impinge on these arrangements. The paper will conclude with an assessment of the prospects of an expanded free trade area between these countries.

Philippine APEC Study Center Network
Authors Keywords
Avila, John Lawrence V.; ASEAN;
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