Secretary-General of ASEAN

ERIA Symposium on Opportunities and Challenges towards Regional Integration in East Asia
Singapore , 6 November 2007

It gives me great pleasure to join you at this ERIA Symposium on Opportunities and Challenges towards Regional Integration in East Asia

Asia is the most dynamic region in the world today. In 2006, developing Asia grew by 9.8 per cent, faster than the world output, which grew at 5.4 per cent. ASEAN has certainly benefited from Asia’s continued expansion, growing by 6% in 2006.

ASEAN recognises its place in Asia as highlighted in its 40th anniversary theme, “one ASEAN in the heart of Dynamic Asia”. 

Currently, various initiatives on regional cooperation are in place. Foremost amongst these is ASEAN Plus Three Cooperation, which began in 1997 and was formalised in 1999 with the adoption of the Joint Statement on East Asia Cooperation at the Third ASEAN Plus Three Summit in Manila, Philipines. Since then, ASEAN and the Plus Three Countries of China, Japan and the Republic of Korea (ROK) have developed a web of co-operation spanning the cultural, economic, functional, political, security and social areas.

ASEAN Plus Three Cooperation is complemented by co-operation at the ASEAN Plus One level, i.e. ASEAN Plus China, ASEAN Plus Japan and ASEAN Plus ROK, which on their own, have also spurred co-operation in various areas.

The growing interdependent economic relations between ASEAN and the Plus Three Countries prompted the pursuit of a higher form of economic relations through the establishment of Free Trade Areas with each of the Plus Three Countries. In line with this, there is also great interest in the establishment of an East Asian Free Trade Area (EAFTA). This is currently in its Phase II of study by experts from the ASEAN Plus Three countries.

On 14 December 2005, the first East Asian Summit (EAS) was held in Kuala Lumpur, Malaysia. During that Summit, the Leaders agreed that “the East Asia Summit with ASEAN as the driving force is an integral part of the overall evolving regional architecture”. The Leaders also agreed that the East Asian region had already advanced in its efforts to realise an East Asian community through the ASEAN Plus Three process and in this context, the EAS together with the ASEAN Plus Three and the ASEAN Plus One processes could play a significant role in community building in the region

Whilst reiterating support for ASEAN's role as the driving force for economic integration in this region at the second EAS held on 15 January 2007 in Cebu, Philippines, the Leaders agreed to launch a Track Two study on a Comprehensive Economic Partnership in East Asia (CEPEA) among EAS participants. To date, the experts have met three times and have made progress in the task at hand.

These developments have certainly presented various opportunities, not just for advancing trade and investment but also in addressing transnational concerns in the East Asian region. In moving these initiatives forward, however, we should also be mindful of the many challenges ahead. These challenges are largely due to the different levels of development of the East Asian Countries, as well as the different ways by which the East Asian Countries deal with the challenges.

Let me mention three that come to mind.

The first challenge is modernisation. Advances not just in technology but also in innovation have revolutionised the conduct of business in the world. Production and services are no longer integrated in one factory or location but are outsourced and increasingly manufacturing is now undertaken through production networks. Information technology, on the other hand, has increased the speed of innovation. Governments must ponder the appropriate policies to meet the challenge of modernisation, whether it is best addressed to increase R&D spending or promote the development of clusters, Silicon Valley-like establishments.

The second challenge is competition. The opening up of markets have certaintly heightened competition not just for small and medium enterprises but also large and more established firms. Now more than ever, businesses are pressed to undertake more efficient activities, including outsourcing and efficient supply chain management in order to lower costs and achieve economies of scale. As governments pursue liberalisation efforts through FTAs, they must also put in place the safety nets and the enabling environment for their firms to compete in a globalised trading environment.

Finally, the third challenge is the absence of an adequate legal regime. The region has inadequate laws to protect intellectural property rights and govern e-Commerce. Not only are the laws lacking, enforcement has also been inadequate. Moreover, there is weak legal mindset to protect rights or even pursue these rights through arbitration or dispute settlement.

These three challenges of modernisation, competition and absence of an adequate legal regime need to be addressed in order to advance regional integration in East Asia. It is clear that in doing so governments should closely interact with the relevant stakeholders, i.e. the private sector, civil society and the academia. This is to ensure that balanced and good policies are developed and put in place for the region.

This is where the Economic Research Institute for ASEAN and East Asia (ERIA) could play an important role. The challenges I highlighted require not only a lot of study but may also necessitate the harmonisation of rules and procedures. ERIA could contribute not just by synthesizing the issues at hand but also in educating our policy makers so that they could make informed decisions.

With the help of initiatives such as ERIA and concurrent with the current dialogue and cooperation, the region could develop a regional framework, which could facilitate the realisation of East Asian integration.

It is my hope that the points I put forward would stimulate greater interest and information exchange among the participants of this symposium. I, therefore, would like to congratulate JETRO Singapore and the Singapore Institute of International Affairs for spearheading this initiative, as well as the various institutions that have supported it.

I wish all participants a fruitful exchange of ideas and I look forward interacting with you in the course of the symposium.

Thank you for your kind attention.