In Asia, along with India and China, the 10-member Association of Southeast Asian Nations (Asean) is fast emerging as the third centre of economic growth.
With a combined gross domestic product of just under $1.5 trillion and a total population of about 600 million, this regional grouping not only withstood the recent recessionary period with surprising resilience, but now is an entity that many Western economies, including the United States, will look at forging closer ties with, as their own markets face a period of continued slowdown.
At the same time, the ongoing turmoil in Europe is likely to put pressure on some export-driven Asean members — Singapore and Indonesia, among others, recently cut their growth forecasts for the next year — a fact that has not escaped the attention of the grouping’s leaders, who are gathering in Bali for the Asean and East Asia Summits this week.
As a result, Asean member states have begun work on creating a new regional economic framework that will allow the grouping to engage more closely with its dialogue partners, which include Australia, Canada, China, the European Union, India, Japan, New Zealand, Korea, Russia and the US.
“My understanding is this framework will provide the blueprint or the principles that guide Asean’s collaboration or cooperation with its dialogue partners on the economic fields,” said Indonesian foreign minister Marty Natalegawa, while confirming the framework would be discussed within Asean members during this week, and a stand-alone declaration on the matter would be made at the end of the summit.
Asean’s move to build such a mechanism is of consequence, especially given the recent momentum that the Trans-Pacific Partnership (TPP) has gained since last weekend’s Asia Pacific Economic Cooperation (APEC) summit, where US President Barack Obama put his weight behind the pact.
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That four Asean members — Singapore, Brunei, Vietnam and Malaysia — are part of the proposed TPP, Asean officials admit, is causing some discomfort within the 10-member organisation, which also includes Indonesia, Thailand, Cambodia, the Philippines, Myanmar and Laos.
In fact, the primary logic behind this new framework is to leverage on the collective economic strengths of the Asean bloc. It will make it easier for countries to enter into free trade agreements (FTAs) with Asean, while existing FTA partners will automatically shift to the new regime.
“We are still in the process of finalising it (the framework), but I think the spirit is that we need to work together more. Again, this is not a negotiating forum, nor is APEC a negotiating forum, but how we have looked at this is to basically be sensitive to what’s happening economically around the world and how we could strengthen our collective position, whether it is in context of just the 10 countries within Asean, Asean+3 or Asean+6 or even together with the East Asia Summit members or affiliates,” said Indonesian trade minister Gita Wirjawan, after chairing a meeting of the Asean economic ministers here on Wednesday.
Apart from engaging with Western economies, Wirjawan indicated the framework could also provide an opportunity for Asean to draw closer to its two Asian partners, India and China, with which the grouping already has separate FTAs.
“I think it is an opportune time given the uncertainties that are happening in Western European countries and the US. The more reason for us to basically behave more collectively, and I don’t see any reason why we aren’t going to be able to do that... We basically were talking about how we can position Asean collectively to new markets and new opportunities, and I think we stand a good chance at reaping the benefits,” he said.
But there is also an underlying sentiment here at the meetings in Bali that this new economic framework is part of Asean’s efforts to maintain its leading role in the region and even within the larger 18-nation East Asia Summit, which will have the US and Russia joining it this year.
And significantly, even as the US had been aggressively pitching for the TPP, two of Asean’s dialogue partners with substantial interest in the Pacific, China and Japan, had expressed their reservations about the partnership, Asean officials said, adding inputs from both countries had been included in creating this Asean-led framework.
Asean secretary-general Surin Pitsuwan, however, played down the perception that the new framework was in reaction to any single pact or partnership. “I think Asean is taking into account all the developments around us and the TPP is just one. Four of our member states are part of the TPP process,” he said.
“It is a regional architecture,” Pitsuwan added, referring to the framework. “We have to be prepared in order to welcome a lot of engagement that will be coming towards us.”