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69. The Parallel Tracks of Asian Multilateralism
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342 Sheldon W. Simon By: ROS Size: 7.5" x 10.25" J/No: 03-14474 Fonts: New Baskerville 69. THE PARALLEL TRACKS OF ASIAN MULTILATERALISM SHELDON W. SIMON Reprinted in abridged form from Sheldon W. Simon, “The Parallel Tracks of Asian Multilateralism”, in Southeast Asian Security in the New Millennium, edited by Richards J. Ellings and Sheldon W. Simon (Armonk, N.Y.: M. E. Sharpe, 1996), pp. 13–33. Copyright © 1996 by The National Bureau of Asian Research. Reprinted with permission of M.E. Sharpe, Inc. and the author. As the Asia-Pacific region approaches a new millennium, regional international relations are moving away from Washingtoncentered bilateralism to a more diffuse multilateral structure. This new structure consists of both economic and politicalsecurity components, which currently run along separate tracks. The structure is quite comprehensive in that almost all Asia-Pacific states are involved, although it is not completely inclusive. For example, Russia, North Korea, the Indochinese states, and Burma (Myanmar) in early 1996 are not yet members of economic regional groups. Nor are North Korea, Burma, and Taiwan members of the new regional security gathering. (In all probability, however, Burma, Vietnam, Laos, and Cambodia will join both types of Asia-Pacific organizations by the turn of the century.) Economic regionalism in the Asia-Pacific region, in contrast to Europe, has been driven by market forces rather than politics. The European Union (EU) evolved over a thirty-five-year period through top-down political decisions. Economies were linked through negotiations among West European governments. In Asia, economic regionalism has been a product of market forces through which capital from Japan, the United States, and Europe has created linkages among Asian economies via transnational corporations and technology transfer. Again, unlike Europe, this marketled regionalism is open to interaction with states outside the Asia-Pacific region on the basis of reciprocity. The European model is rejected in Asia as too rigid, institutionalist , and discriminatory.1 Open economic regionalism in East Asia is partially driven by fears that other regionalisms will be closed. Asian states fear being shut out of the North American Free Trade Agreement (NAFTA) as well as the European Union. They are attracted, rather, to the concept of global free trade embodied in the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO). Asian states have initiated policy con069 AR Ch 69 22/9/03, 12:54 PM 342 The Parallel Tracks of Asian Multilateralism 343 By: ROS Size: 7.5" x 10.25" J/No: 03-14474 Fonts: New Baskerville sultations among themselves as well as some coordination to establish such common goals as the gradual elimination of trade barriers. They hope to accomplish these tasks through ASEAN (Association of Southeast Asian Nations) Free Trade Area negotiations and Asia-Pacific Economic Cooperation (APEC) forum plans. At this stage, however, no member-state is willing to consider sharing authority with a supranational mechanism that could make binding decisions, as in the EU. One of the most striking features of Asian economic growth has been mutual economic penetration. In the aggregate this has led to remarkable rates of economic growth in the region over the past fifteen years. But it has also led to friction with respect to the distribution of trade benefits, particularly between the United States and Japan and the United States and the newly industrializing economies (NIEs). America has been running large annual deficits with the Asia-Pacific region — currently around $80– $90 billion — since the early 1980s. To ameliorate this financial drain, Washington has pressed its Asian trading partners to open their markets further to U.S. products, in the case of Japan (until autumn 1994) even insisting that some U.S. exports be guaranteed shares of Japan’s market (e.g., government procurement, automobile parts, computer chips). U.S. bilateral negotiations with Japan, China, South Korea, and Thailand in particular have created political tensions that threaten to undermine the generally favorable U.S. relationship with Asia in the post-Cold War period. Despite these frictions, Asia-Pacific economies are of vital importance to the United States. American trade across the Pacific is one-and-a-half times as large its counterpart with Europe. Exports to APEC countries account for 2.6 million jobs in the U.S. economy. Approximately half of all U.S. exports go to Asia, and about 60 percent of U.S. imports come from that region. Thirty percent of U.S. overseas investment goes to APEC...