Engine for Dynamism and Stability
Edited by Masahiro Kawai, Jong-Wha Lee, Peter A. Petri and Giovanni Capanelli
Chapter 14: Deepening Asian Integration and the Architecture for Regional Cooperation
Peter Drysdale The case for greater regional cooperation in Asia is clear. Less so is the form that it should take. Asia’s huge diversity and complex politics argue for pragmatism and flexibility in the scope, speed, sequencing and style of economic cooperation. Different groups of countries may wish to collaborate in various policy areas to varying extents; overlapping subregional groups may coexist comfortably with broader regional ones. But Asia’s growing integration and importance in the world economy also require more ambitious, comprehensive efforts in cooperation. An Asian single market is hugely preferable to a tangled web of preferential trade agreements, for instance. And if Asia is to play a role in global economic decision-making commensurate with its growing importance, it must increasingly act together – not just for its own sake, but also for the world’s sake. The future of the system of open world markets on which regional and global prosperity rest may depend on it. This became more and more abundantly clear as the global financial crisis unfolded through 2008. Global and regional institutions will need to accommodate the rise of the People’s Republic of China (PRC) and India, while ensuring that smaller economies – notably those of ASEAN – have an important stake in both of them. The PRC is already Japan’s largest merchandise export market, and in the next 20 years it will become the top export market for every East Asian economy. The rise of the PRC and India presents huge opportunities, as well as risks and challenges....
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