Chapter 5: Regionalism in Asia-Pacific
5. Regionalism in Asia-Pacific 1. STRUCTURAL TRANSFORMATION OF THE ASIA-PACIFIC REGION Although approximately half of the trade is at present intra-regional, institutionalized regionalism was slow to put down its roots in Asia.1 Relative to other regions, the Asia-Pacific region was slow and late in catching on to the concept and phenomenon of regionalism. Asian policy makers ignored the institutional form of the concept for a long time. Economic growth in Asia has a certain characteristic pattern to it. Following a brief flirtation with the import-substituting industrialization strategy, over the preceding three-and-a-half decades, the high performing Asian economies adopted outward-oriented strategies, promoting trade and foreign investment. This led to brisk expansion of intra-regional trade and investment. Asia-Pacific regionalism was essentially market-led and uninstitutionalized. Regional production networks were the consequence of market-led economic dynamics of the region. Large corporations, including transnationals, contributed to the growth of the pan-Asian industrialization process (Chapter 3, section 3). Some institutional arrangements followed market initiatives, albeit with a substantial time lag. Some regional institutional initiatives were taken, which are presently operating with varying degrees of success. We shall see that empirical exercises, using a gravity model, concluded that East and Southeast Asian economies clearly show certain inward bias among themselves. Although this does apply to all, the dynamic economies of the Asia-Pacific region do seem to be natural trading partners.2 These regional initiatives not only coexist with globalism but also serve as stepping stones to multilateralism. A large body of research is available proving that trade and...
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