Extra-Regional Economic Relations with China and Japan

Although the implementation of AFTA and the CEPT was criticised for being cumbersome and incomplete (Cuyvers et al. 2005; Ravenhill 2008), the share of intraregional trade within ASEAN grew from approximately 18 per cent in 1991 to around 21 per cent shortly before the Asian crisis, and to 25 per cent in the mid-2000s.¹⁴ Although these numbers are high for a developing region and mark a significant improvement in intraregional trade, they also show that the ASEAN member states are

Table 5.2 The three most important export destinations of the ASEAN member states in 2006

Calculation based on the UN Comtrade database (comtrade.un.org)

still largely dependent on trade with extra-regional economic partners. In 2006, shortly before the ASEAN Charter and the AEC were adopted, the main trade partners for Southeast Asian countries were still the EU, Japan, and the USA (see Table 5.2). The importance of the EU and the USA for ASEAN’s exports had increased in comparison to 1991, whereas the dominance of Japan declined due to the ongoing economic stagnation of that country. Japan’s central position was replaced by the EU’s, which was among the three most important export destinations for nearly all ASEAN member states in 2006.

The cursory data of 2006 misses one important change in ASEAN’s trade network: the rise of China as an important trade partner for Southeast Asia.¹⁵ The dynamic economic growth of China was one of the most important developments on the global market during the first decade of the new millennium (Ikenberry 2008). Of course, China became a much more important export destination for the ASEAN member states due to this development. ASEAN’s trade network of 2010 demonstrates this very clearly (see Fig. 4.5 in Chap. 4). Whereas China was not yet represented among ASEAN’s three most important extra-regional trade partners in 2005, it became one of the most central actors in ASEAN’s trade network of 2010. The EU lost relevance for Southeast Asian trade and the USA was not among ASEAN’s three most important trade partners anymore in 2010, because the global financial crisis of 2008-2010 led to weakening demand in the Western World. In 2010, the most important trade partners for ASEAN became the two regional powers China and Japan, which cooperated with ASEAN in the ASEAN+3 framework.

The economic weights within ASEAN did not change a lot between the 1990s and the 2000s. There were still four member states—Indonesia, Malaysia, Singapore, and Thailand—that were more economically important than the six remaining member states (see Chap. 4). However, none of these bigger member states were large and wealthy enough to dominate the region in economic terms and to be of outstanding economic importance for extra-regional actors. This reduced the risk that any member state would enjoy privileges in its extra-regional economic relations with the EU and the USA at the beginning of the decade or with China and Japan at its end. This situation would have allowed for cooperation between the member states in order to improve their common position in relation to extra-regional partners. It was unlikely that one of the member states would have had to protect important privileges in its extra-regional relations at the cost of regional integration.