ASEAN Economic Community: A Model for Asia-wide Regional Integration? ed. by Bruno Jetin and Mia Mikic (review)

This edited book focuses on the ASEAN Economic Community (AEC). It is written and published in the same year as the AEC has been created. In the light of this event, the authors describe: ASEAN’s current state; how the region has changed since the association’s establishment in 1967; and also examines ASEAN’s future challenges. This book is an interesting read for policymakers, economists and anyone interested in ASEAN and the AEC.

The AEC has four pillars to transform ASEAN into an economic community: (i) a single market and production base; (ii) a competitive economic region; (iii) equitable economic development; and (iv) integration into the global economy. The book concentrates on pillars one, three and four, with a focus on trade and social inequalities. The book is divided into three parts. The editors give most weight to the first part on ASEAN Economic Integration in the context of East Asian regionalism (Chapters 1 to 7). The second and third parts deal with the impact of regional integration on structural change, employment, poverty, and inequalities (Chapters 8 to 15).

Following a quick introduction on the book’s structure and topics, Chapter 1, written by David Martin Jones, directly addresses the original purpose of ASEAN: a regional security arrangement with a non-interference policy. The Association, however, is focusing its attention on further economic integration within the region through the AEC, and beyond, through the Regional Comprehensive Economic Partnership (RCEP). Contrary to the official ASEAN view, the author doubts if further significant integration between these nations, whether in politics or economics, is possible due to the practice of non-interference and non-binding consensus. Jean-Raphael Chaponniere and Marc Lautier discuss ASEAN’s history within Southeast Asia in Chapter 2. Mia Mikic (Chapter 3) examines the Association’s next steps within the region with the development of RCEP, and globally, with the U.S.-led Trans-Pacific-Partnership Agreement and the China-led Free Trade Area of the Asia Pacific. The conclusion is that regional cooperation is mainly foreign-driven and that deeper integration, for example the ASEAN Free Trade Area, was a reaction to other integrated markets around the world. ASEAN’s main economic achievement has been the removal of tariffs; while on a global perspective, the core ASEAN states successfully integrated themselves into the global value chain in automobiles and electronics manufacturing. Yann Duval and Emilie Feyler (Chapter 7) contrast different trade costs between major (free) trade areas, while Prema-chandra Athukorala (Chapter 4) analyses global production sharing and trade patterns within and between Southeast and Northeast Asian states. Concerning tariffs, the authors find that even though ASEAN member states have a comprehensive tariff reduction agreement, their trade costs, other than pure tariffs, remain very high amongst themselves and are comparatively higher than the same trade costs between China, Japan and South Korea — which have no common free trade agreement in operation. Athukorala highlights the importance of global production networks for ASEAN countries. The core ASEAN member states have been participating in global production sharing since the association’s inception and have deepened their participation due to China’s rise as a main player in the global production network. ASEAN nations profit from China’s participation in the global value chain by restructuring their operations from low- to high-value manufacturing and services tasks.

Chapters 5 and 6, by Nabil Aflouk, Jacques Mazier and Myoung Keun On, and Witada Anukoonwattaka, respectively, explore the exchange rate on ASEAN Economic Integration and the global value chain. In the former case, the authors use economic models to assess exchange rate misalignments between East Asian nations and to determine the most beneficial East Asian exchange rate regime. They find that the exchange rates would preferably have a certain degree of flexibility versus a strict peg to the U.S. dollar or the Chinese yuan. Likewise, the latter chapter reasons that a coordination of exchange...