2008-E-6
POLITICAL-SECURITY COMPETITION AND THE FTA MOVEMENT:MOTIVATIONS AND CONSEQUENCES
Mike M. Mochizuki
George Washington University

June, 2008

Paper presented at the International Symposium “Competitive Regionalism,” Ibuka
International Conference Hall, Waseda University, Tokyo, Japan. May 30 to 31, 2008.

Second Draft: Not for Citation or Distribution without Author’s Permission
Prepared for the Project on “Competitive Regionalism”
Waseda University, Tokyo, JapanMay 30-31, 2008

POLITICAL-SECURITY COMPETITION AND THE FTA MOVEMENT:MOTIVATIONS AND CONSEQUENCES
Mike M. Mochizuki
George Washington University

Calculations of national economic interests have animated the pursuit of freetrade agreements (FTAs) in the Asia-Pacific region, and such agreements can havesignificant commercial consequences. But the recent FTA bandwagon is not exclusively
about economics. This phenomenon encompasses a political-security dimension as well.
It would indeed be surprising if nations sought such agreements devoid of any politicalsecurity calculations and if such agreements did not have international political-security
consequences.
Incorporating the political-security dimension in an analysis of the recent
proliferation of FTAs and other preferential trading arrangements resonates well with thecompetition hypothesis that is proposed and tested in this project. Given that anarchy has
been a bedrock assumption in the international security realm, the security studies field
has naturally focused on the possibility of and the means for taming the competitive
tendencies in the inter-state system and preventing war. At one end are the pessimistic
works of what is now often called the school of “offensive realism” that posits that theinsecurity of great powers drive them in an unceasing and tragic competitive quest for
relative power.1 In this conception, periods of peace are just interludes in the preparation
for war. Only the establishment of hegemony (regional and/or global) by one power
provides the international system with stability, but the quest for this hegemony bycontending states will be fraught with conflict and war. Less pessimistic analyses in the“defensive realism” school believe that the competitive logic endemic to anarchy can be2tamed enough to avoid great power war through balances of power and mutual
reassurance strategies.2 At the other end of the spectrum lie more optimistic or at least
more hopeful arguments. Institutionalists propose that collective and/or cooperative
security institutions can restrain the competitive dynamics of anarchy enough to establish
a more enduring peace.3 Commercial liberals believe that increasing economic
interdependence between states will alter the material calculations of national elites andeven the domestic political dynamics within states so that states will focus more on thepositive-sum features of economic competition rather than the zero-sum characteristics of
security competition.4 Finally, democratic peace theories argue that the spread of liberal
democracies in the international system offers the best ultimate hope for a perpetual
peace.5
These divergent theories about the implications of anarchy complicate the task ofincorporating the political-security dimension in an explanation of the FTA movement in
the Asia-Pacific region. Depending on one’s theoretical inclinations, one could have very
different takes on the current dynamics in the Asia-Pacific as a regional security system –in particular regarding how powerful are the competitive (as opposed to cooperative)
political-security tendencies, how these tendencies exhibit particular geographic patterns,
and what their long-term consequences are likely to be. Nevertheless, without prejudging
the answers because of theoretical biases, it is still possible to pose empirical questions
that link the political-security dimension to the FTA movement. To what extent does
political-security competition motivate or reinforce a state’s FTA policy –in particular the
choice of FTA partners and the timing and/or sequencing of these partnerships?
Conversely, to what extent does a state’s interest in ameliorating political-security
competition drive or constrain FTA policies? Finally, what are the political-security
effects of the regional FTA frenzy? Does the proliferation of FTAs in the Asia-Pacificreinforce or even exacerbate the competitive tendencies in the political-security realm?
Or is the net effect of the FTA movement that of taming political-security competitionand even promoting political-security cooperation?
The existing literature on the security-economic nexus in general and the linkage
between security and FTAs in particular suggests various arguments germane to theabove questions.6 One argument that emerges from commercial liberalism is that FTAs

3
can be an instrument of cooperative diplomacy. Fostering economic integration between
states through FTAs as well as other methods can help overcome mutual mistrust andmitigate security competition. The European Coal and Steel Community (ECSC) forgedby France and West Germany is often cited as a proto-typical example of how economic
integration can promote reconciliation even between so-called “hereditary enemies.”7
But the ECSC case suggests another logic that is more consistent with political-security
competition –namely that FTAs can be one of the economic instruments for bolstering
security alliances that are designed to counter potential or actual threats from third
parties.8 Both the cooperative logic of mutual reassurance and the competitive logic ofsecurity alliances can unfold bilaterally or multilaterally. In the case of Western Europe,
the institutionalization of a multilateral collective defense organization (NATO) and thedevelopment of an inclusive multilateral cooperative security process (CSCE) reinforced
the movement towards multilateral economic integration (the European Community andlater the European Union). In East Asia, the U.S. adoption of bilateral alliancearrangements weakened or even impeded the development of multilateral economic
integration processes.9
Another line of argument is that FTAs and other economic integration moves areways to assert political influence or enhance a state’s international status or visibility. In
the case of great powers or potential great powers, the logic of political-security
competition suggests that FTAs might be a factor in hegemonic or leadershipcompetition. For instance, the existing predominant power might seek to defend its
hegemonic status by using FTAs to reinvigorate the loyalty and dependence of states
already aligned with it, to broaden the network of aligned subordinate states, and tocounter hegemonic projects of potential challengers. Conversely, hegemonic challengers
might use FTAs to mobilize supportive states and to weaken the influence of the existinghegemon. Albert Hirschman’s analysis of how Nazi Germany used preferential trade
links to enhance its relative power in Europe is a classic statement of such a strategic
calculation.10 Even if major powers eschew hegemonic projects, they can still compete
for leadership and influence so to encourage a political-security order that is morefavorable to its long-term interests and to discourage an order that is unfavorable. Of
course, such an analysis requires specifying state preferences regarding alternative orders.

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Nevertheless, as Michael Wesley has recently argued, the pursuit of FTAs for politicalsecurity reasons can reinforce or exacerbate competition and tensions among the major
powers and contribute to international instability.11
For smaller states that have little or no prospect of becoming great powers, FTAs
can serve as tools to reduce their security vulnerabilities or prevent international isolation
by deepening economic links with larger and more powerful states. Furthermore, smaller
states might form FTAs or pursue other integrationist projects among themselves in orderto enhance their collective voice and bargaining power relative to larger states.12 They
can also overcome the disadvantages of smallness by striving to become “trade-hub”
nations by serving as the focal point of FTA networks.13
This paper will examine the political-security dimension of the proliferation of
FTAs in the Asia-Pacific region in the following manner. First, it will provide an
overview of the Asia-Pacific security environment and its changing dynamics. The
purpose here will be to identify the political-security calculations and responses ofvarious key states in the context of this evolving regional security environment. The
paper will then analyze the extent to which these political-security calculations havemotivated state policies regarding FTAs. Finally, this essay will assess the implicationsof the regional FTA movement for competitive and cooperative tendencies in the regional
security system.
Evolving Security Environment in the Asia-Pacific Region
Michael Mastanduno has aptly characterized the Asia-Pacific security order as
one of “incomplete hegemony.”14 It is a hegemonic order because the United States
maintains a preponderance of both material and nonmaterial power capabilities. U.S.
military capabilities remain unrivaled in the region and are forwardly deployed. Despite
fears of some about American isolationist tendencies, the United States did not disengage
from Asia after the collapse of the Soviet Union. Its extensive bilateral alliance network
not only provides military access over long distances, but also augments U.S. capabilities
through the defense contributions of allies. America’s economic revival after the end of
the Cold War (coupled with the economic stagnation of Japan) reaffirmed U.S. economic
and technological primacy. Despite some decline in its international reputation in the5wake of the Iraq debacle, most Asia-Pacific states still find the United States attractive
and its soft as well as hard power pretty much intact. With varying degrees of success,Washington has used its power and influence to manage regional security conflicts,
discourage nuclear proliferation, moderate security dilemmas, and help prevent extreme
forms of nationalist economic competition. But as Mastanduno argues, the U.S.
hegemonic order is incomplete because China’s power is rising and is ambivalent about
U.S. hegemony; and the sustainability of even this incomplete U.S. hegemony is far fromassured. In this sense the interactive dynamics (both the competitive and cooperative
elements) between the United States and China is likely to be the key factor in shaping
the Asia-Pacific security order. But even if no other state in the region has the potential
to match these two states in terms of comprehensive power capabilities in the foreseeable
future, the strategic calculations and behavior of the other states vis a vis both the UnitedStates and China will also affect the relative power and influence of the United States andChina and therefore the Asia-Pacific security order itself. In this era of a shifting
distribution of power, how then are we to code the strategic responses of states?
International security specialists have offered numerous concepts for
distinguishing state strategies under anarchy. A commonly used distinction is thatbetween balancing and bandwagoning. Balancing involves a state acting to deter andcontain an adversary. A state can balance internally by using one’s own resources tocounter an adversary or externally by forging alliances against a common adversary.
Bandwagoning entails joining forces with an adversary to prevent the adversary fromacquiring power at one’s expense and/or to enjoy the spoils of the adversary’s victory. To
this balancing-bandwagoning dichotomy, some have added the strategies of buck-passing
and appeasement.15 Buck-passing involves a state relying on another great power tocounter an adversary while staying on the sidelines. Appeasement entails seeking to alter
the behavior of an adversary in a non-threatening direction by conceding power to theadversary.
The problem with this typology of balancing, buckpassing, appeasement, andbandwagoning strategy is that it presumes certainty about which states are adversaries orthreats. This is not analytically problematic if we assume threats to be simply functionsof material capabilities and geographic position. But if one views threats to be a function

6of intentions as well as material capabilities and geographic position, then thedetermination of which states are threatening and how threatening they are becomes more
uncertain and open to debate. A state’s true intentions at a given point in time may not be
truly knowable and may depend as much on the perceptions of the other state.
Furthermore, a state’s intentions can change easily depending on the international
circumstances, domestic factors, or shifts in relative power resources. For an offensive
realist, the changeability of intentions suggests that states ought to identify adversaries byfocusing only on capabilities and geographic position. But for a defensive realist, such
behavior could lead to worst-case responses and counter-responses that can result in aself-fulling prophecy of provoking a potential adversary into becoming an actual
threatening adversary. Therefore, a defensive realist is likely to find the balancing,
buckpassing, appeasement, and bandwagoning typology to be too crude and stark.
Uncertainty about present and future intentions of potential adversaries may point tomixed strategies that combine certain elements of the other strategies. For example, under
uncertainty about intentions, states can hedge by combining elements of balancing on the
one hand and elements of accommodation on the other.16 Accommodation can in turnencompass efforts to engage, integrate, reassure or even appease potential adversaries.
Whether or not a state has threatening intentions will depend greatly on how astate views the existing international order. According to many power transition theories,
if a state is satisfied with the existing order or status quo, that state should not bethreatening even as its relative power rises. But if a state is dissatisfied with the existingorder and is willing to use force to alter the status quo, then the state is revisionist andthreatening and is likely to provoke a great power war as the distribution of power
shifts.17 The operationalization of the status quo-revisionist state distinction raises threefurther issues. The first issue is specifying what the existing order or status quo is –something that is by no means obvious. The existing order can encompass various
factors including the following: (1) the existing power distribution and hierarchy amongstates, (2) the existing territorial boundaries, (3) the existing pattern of alliances andalignments, and (4) existing international institutions and their operating rules and norms.
Second, there is the issue of what measures a state is willing to use to revise the existingorder. The range of possible state action on behalf of a revisionist agenda is quite broad:7
they can include the use of force, diplomatic coercion, economic incentives, andpersuasion/socialization. For security specialists interested in the causes of war, the useof military force for revisionism is of course the most salient. But if one is also
considering political-security competition short of war (as is the case in this project), thenother non-lethal instruments become important. Finally, there is the issue of order
creation or evolution. In reality (especially in a region as dynamic as the Asia-Pacific),
the distinction between status quo and revisionist states may be too stark in some respects
since states in the region are collectively considering the development of new
international institutions and processes.
How then are states in the Asia-Pacific region responding to the shifting
distribution of power? In addressing this question, the security studies literature suggests
distinguishing between great and secondary powers. According to Mearsheimer, to be agreat power, “a state must have sufficient military assets to put up a serious fight in an
all-out conventional war against the most powerful state in the world.” A great power
does not necessarily have to be able defeat the leading state, but “it must have somereasonable prospect of turning the conflict into a war of attrition that leaves the dominantstate seriously weakened.”18 Under this definition, one might argue that there is currently
no great power in the Asia-Pacific that can militarily challenge the U.S. hegemon. But
with its growing power resources, China has the potential of taking on the United States
militarily at least in the East Asia region. What about Japan? Although Japan was agreat power in the first half of the 20th century, its pursuit of a tightly constrained defense
policy because of anti-militarist norms and its reliance on the United States for security
would relegate Japan to the status of a secondary power.19 Nevertheless, Japan still has
the economic and technological capabilities to become a formidable military power; andif Japan were to pursue a security policy that is strategically independent of the UnitedStates, then it would have a dramatic effect on the regional balance of power. So for the
purposes of our discussion here, it makes sense to distinguish between the actual andpotential great powers on the one hand (the United States, China and Japan) andsecondary states on the other.

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Actual and Potential Great Powers (the US, China and Japan)
What is striking about the major powers –the United States, China, and Japan – isthat all three are pursuing mixed hedging strategies vis a vis each other.
Although American policymakers and foreign policy analysts have debatedwhether or not to treat China as a strategic competitor or partner and U.S. policy toward
China has fluctuated because of presidential election cycles, the center of gravity ofAmerica’s China policy has been a hedging strategy.20 On the one hand, the UnitedStates has balanced against China by maintaining nuclear, air and naval military
superiority, buttressing its bilateral alliance network (especially with Japan andAustralia), expanding military access in the region with bilateral arrangements withcountries like Singapore, selling new military systems to Taiwan, and improving relations
with India as a potential counterweight to China. On the other hand, the United States
has accommodated China by restraining Taiwan from pushing toward formal
independence, accepting China into the WTO and other international organizations,cooperating with China to deal with North Korea’s nuclear program, supporting China’s
economic modernization, and engaging China to become a “responsible stakeholder.”China too is pursuing a mixed hedging strategy.21 It is balancing against theUnited States and the U.S. alliance network by modernizing its military (especiallynuclear, air and naval forces and even the exploration of anti-satellite capabilities) and by
preventing the formation of an anti-China coalition in Asia through reassurance andconstructive bilateral and multilateral diplomacy. But China is also accommodating theUnited States. Beijing is willing to join U.S.-supported international regimes (e.g. theNuclear Suppliers Group and the Missile Technology Control Regime), cooperate with
Washington to deal with North Korea, and develop a common stance on counterterrorism. Compared to earlier analyses that predicted and hoped for a multipolar world,
Chinese leaders now seem willing to accept U.S. predominance for at least the time being
and to use the international stability that American hegemony offers so that China canconcentrate on its own economic development. The one issue in which China is willing
confront the United States is any move on Washington’s part to support both
diplomatically and militarily a Taiwanese independence movement. Regarding Japan,
China has admonished its neighbor regarding history-related issues, mobilized Asian

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opposition to Japan becoming a permanent member of the UN Security Council, andcriticized moves to strengthen the US-Japan alliance in ways that could be used in a
Taiwan scenario. But at the same time, Beijing has been receptive to Tokyo’s efforts toprevent a downward spiral in bilateral relations.
Japan is also hedging.22 Tokyo has balanced against China’s rise bystrengthening its alliance with the United States, by relaxing somewhat its domestic
constraints on defense policy, and by furtively discussing with the U.S. defense
community Japan’s role during a Taiwan crisis. But Japan’s balancing against China has
been circumscribed.23 Japan continues to freeze its defense budget and to refrain fromrevising or reinterpreting its constitution so that it can exercise its right of collective selfdefense. Japan has accommodated China by assisting China’s economic development,
welcoming its participation in various global and regional fora, and opposing Taiwan’s
independence. And since fall 2006, the Japanese government has sought to revitalize
relations with China by avoiding prime minister pilgrimages to the Yasukuni Shrine, byresuming regular high-level exchanges, and by seeking a compromise in the EEZ disputein the East China Sea. Japan has also engaged in hedging vis a vis the United States.24
While relying upon its alliance with the United States to hedge against possible military
threats, Japan has been developing relations with Asian countries to hedge against
economic conflicts with the United States and perhaps even a weakening of the U.S.
security commitment to Japan.
How do the three major powers fare in terms of the status quo-revisionist state
distinction? According to Alastair Iain Johnston, China is “more accepting of extant
international institutions, international norms (such as they are), and U.S. dominance of
the international and regional power structure than at any time since 1949.”25 China
exhibits a mild form of revisionism when it promotes regional processes that exclude theUnited States. Regarding the territorial dispute with Japan, China has so far refrained
from threatening military force to seize the Diaoyu/Senkaku islands. China is mostrevisionist when it continues to reserve the right to use force against Taiwan. Japan
appears to be unequivocally a status quo power. It has refrained from considering the useof force to change an unfavorable status quo regarding territorial disputes with both
Russia and South Korea. And it supports a continuation of U.S. hegemonic leadership10
and alliance network in the Asia-Pacific region. Given that the United States is the
predominant power in the region, one would expect it to be the most status-quo oriented.
Washington, however, does display some revisionist tendencies when it considers regimechange of rogue states or assertive democratization and human rights policies –but so far
in the Asia-Pacific, U.S. has tempered this tendency especially after its regime change
war against Iraq became a quagmire.
Secondary States
There is little evidence that the secondary states in the Asia-Pacific are balancing
against the rise of China or balancing against the U.S. hegemon.
South Korea is accommodating China’s rise.26 Seoul has not exhibited much fearof China’s military modernization and has been willing to accept Chinese leadership on
many regional issues –especially how to address the North Korean nuclear issue. South
Korea has generally embraced Chinese initiatives for regional institution-building.
Although South Koreans may disagree about whether to be tougher toward North Korea,
even Korean conservatives eschew military balancing against China. But the absence ofbalancing against China and the presence of populist anti-Americanism do not mean that
South Korea is bandwagoning with China or balancing against the United States. Even
during the Roh Moo-hyun presidency, Seoul cooperated with Washington regarding the
U.S. plan to realign military bases on South Korean territory rather than pressing the U.S.
to withdraw troops. It also supported the U.S. military operation in the Middle East by
deploying a larger defense force than Japan. The election of Lee Myung-bak is likely tolead to a strengthening of relations with the United States as well as a warming ofrelations with Japan.
The Southeast Asian countries in ASEAN also show clear signs ofaccommodating China’s rise. The gravitational pull of the Chinese economy as well as
cultural and ethnic linkages have restrained the ASEAN states from directly balancing
against China’s growing power.27 But at the same time, ASEAN is not bandwagoning
with China in the security realm. As Evelyn Goh has argued recently, the Southeast
Asian countries are engaged in “indirect balancing against potential Chinese (or otheraggressive) power by facilitating the continued U.S. security commitment to the11region.”28 Furthermore, ASEAN has been actively promoting multilateral institutions
and processes that aim to integrate and socialize China and to moderate great powercompetition.
Australia too exhibits a similar mixed strategic response to the changing regional
power distribution.29 On the one hand, Australia sees its economic fortunes increasingly
tied to China’s growth; and like ASEAN, Canberra has supported regional processes tonurture multilateral cooperation. On the other hand, Australia has revitalized its alliancewith the United States after 9/11 and promoted security cooperation with Japan.
Canberra has been working with Washington and Tokyo to institutionalize trilateral
security cooperation and appears quite favorable to Japan’s “normalization” as a security
actor.30 But Australia is concerned about the incipient rivalry between the United States
and China and between Japan and China, and therefore its preference seems to be toencourage what one Australian analyst calls a “Concert of Asia” rather than balancing
with the United States and Japan against China.31 This preference is likely to be stronger
with the shift in prime ministers from John Howard to the Mandarin-speaking Kevin
Rudd.
The one state in the region that appears to be balancing against China is Taiwan.
To counter Chinese military modernization, Taiwan has been upgrading its own defense
capabilities with the help of the United States.32 Taipei has also welcomed therecalibration of Japanese defense policy and public attitudes in a direction more favorable
to it. Both the governments of Lee Teng-hui and Chen Shui-bian have explored ways tomove Taiwan toward independence much to the agitation of China. But even Taiwan has
not unequivocally balanced against China. As Robert Ross notes, Taipei has beenreluctant to commit the budget necessary to purchase some of the advanced weaponssystems that the U.S. is willing sell; and Taiwanese business interests have been eager topursue commercial opportunities in the mainland.33 The recent election of Kuomintang’s
Ma Ying-jeou suggests in the very least that the Taipei now wishes to ease tensions with
Beijing and revive the cross-strait dialogue.
This brief survey of state political-security strategies does confirm competitive
dynamics among the three major powers –between China and Japan and between China

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and the United States. Therefore, one cannot completely dismiss the pessimistic
scenarios of offensive realists like Mearsheimer who predict a great power struggle as
China grows in power and becomes more of a peer competitor of the US-Japan alliancein the East Asia/West Pacific theater.34 But for the moment, this major powercompetition appears moderate with all three states engaged in mixed hedging strategies.
And none of these major powers are pursuing a stridently revisionist agenda. The AsiaPacific region has yet to manifest the intense rivalries and conflicts that the more
pessimistic analyses predicted soon after the end of the Cold War.35 We do not see aclear geopolitical divide between the U.S.-led alliance network and a Sino-centriccoalition reminiscent of the Cold War era.
The secondary states in the regional system are also helping to moderate thecompetition. Virtually all of these states are pursuing a dualistic strategy ofaccommodating China’s rise and indirect balancing against possible security threats(including from China) by supporting the U.S. alliance network and military
deployments. Therefore, while the region as a whole is not engaged in hard balancing
against China, it is not bandwagoning with China either –making predictions of a reemergence of a Chinese-centered hierarchical order premature. Rather the collective
effect of inter-active state strategies points toward working with the political-security
umbrella of U.S. incomplete hegemony to accommodate and integrate China’s rise so thatthe competitive tendencies will be tamed and the cooperative dynamics will befacilitated.

Political-Security Motivations for FTA Initiatives
How then have state political-security strategies shaped national FTA policies –in
terms of both the choice of partners and the timing of initiatives? Clearly, politicalsecurity competition has been a significant factor behind the regional FTA movement.
FTA Policies of the Major Powers
The United States has used FTAs to reward countries that cooperate with its
foreign and security policies –as indicated by its FTAs with Israel and Jordan.36 In the

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Asia-Pacific region, the key political-security motivation for the Bush Administration’s
support of FTAs was the interest in consolidating a counter-terrorism coalition in thewake of the 9/11 attacks. After the United States concluded an FTA with Singapore in
May 2003, President George W. Bush went to Singapore to sign a strategic partnershipframework agreement and talked openly of linking trade to security cooperation.37 Bushreinforced this message when he attended the 2005 APEC meeting in South Korea by
stating that FTAs can promote security collaboration to fight terrorism in Southeast Asiaand prevent the proliferation of weapons of mass destruction.38 To help buttress thepolitically problematic relationship with South Korea and acknowledge ROKs support of
the U.S. war on terrorism, the Bush Administration worked hard to seal an FTA withSeoul in spring 2007. While strengthening defense cooperation with Australia, theUnited States also signed an FTA with that country in May 2004. But the Bush
Administration has shunned New Zealand in its FTA policy, indicating a willingness topunish uncooperative allies.
Competitive political-security calculations vis a vis China surfaced after China’s
FTA initiative with ASEAN. Responding to criticisms that the US may be distractedwith the war on terrorism while “China was focusing on Southeast Asia like a laser,” theBush Administration in November 2005 issued with seven ASEAN countries a Joint
Vision Statement on the ASEAN-US Enhanced Partnership and an agreement tocooperate to conclude a region-wide ASEAN-U.S. trade and investment facilitationagreement (TIFA).39 Under the Enterprise for ASEAN Initiative (EAI) framework, theU.S. began to pursue FTA projects with individual ASEAN countries: Malaysia and thePhilippines (in late 2002) and Thailand in July 2003.40 One general U.S. incentive forengaging ASEAN countries individually and collectively has been to help shape ASEAN
initiatives for East Asian regionalism so that they do not weaken U.S. influence relative
to China. Because of its reluctance to accede to the ASEAN Treaty of Amity andCooperation, Washington has been hampered in its effort to prevent the emergence of an
East Asia summit process that excludes the United States and heightens Chinese
influence. Therefore, in part to compete with China, the Bush Administration has
preferred to try to revitalize APEC as the central forum for regional economic integrationand float the notion of a Free Trade Area of the Asia Pacific (FTAAP).41

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Competitive calculations vis a vis China have also motivated Japan’s FTA policy.
Despite the pioneering role of the Japan-Singapore Economic Partnership Agreement(JSEPA) signed in January 2002, Tokyo was jolted by the rapid progress in ChinaASEAN discussions. In November 2001, Beijing succeeded in persuading ASEAN toestablish an ASEAN-China FTA by 2010. This news energized Japanese trade officials
to ask politicians to be more flexible about the liberalization of sensitive sectors lest
Japan lag behind in the FTA race, and Prime Minister Koizumi proposed a JapanASEAN Comprehensive Economic Partnership (JACEP) during his trip to Southeast Asia
in January 2002.42 Regarding a free-trade agreement, however, Japan opted to negotiatewith ASEAN countries individually rather with the association as a whole. Someanalysts observed that this tact provoked regional distrust or allowed China to take “theregional lead in economic diplomacy.”43 But METI official Munakata Naoko argues thatJapan took this course because its status as a developed country under GATT rules about
FTAs prevented Japan from being as flexible as China regarding FTA negotiations with
ASEAN. Nevertheless, Tokyo initiated EPA talks with individual ASEAN states in quick
succession: with Malaysia in January 2004, with Philippines and Thailand in February
2004, and with Indonesia in June 2005.44
The incipient Sino-Japanese rivalry has contributed to Japan’s ambivalent
response to Chinese initiatives for subregional or regional FTAs. When China proposedin November 2002 a feasibility study for a trilateral Northeast Asia FTA (China, Japanand South Korea), Japan was less than enthusiastic. Such an agreement if achieved could
provide a robust economic foundation for trilateral political-security cooperation –or atleast help to mitigate mistrust among these three Northeast Asian states. It appears,
however, that Japanese concerns about the agricultural sector and competition from
Chinese state-owned enterprises made Japan reluctant to go beyond think-tank studies of
the idea.45 Conversely, the political-security disincentives might have been too strong
and the political-security incentives too weak to overcome these economic
considerations. Rather than negotiate trilaterally, Tokyo has focused on trying to achieve
an FTA with South Korea where the strategic payoff for Japan might be greater –namely
to prevent a South Korean strategic drift toward China. Regarding the Chinese-backed
proposal for an East Asian Summit, Tokyo pushed for the inclusion of Australia, New15
Zealand and India to dilute China’s influence. Then in 2006, Japan began to shift beyond
its bilateral individual-country approach to FTAs by proposing talks for a region-wide
East Asia Economic Partnership Agreement (East Asia EPA) commencing in 2008.
Similar to its preference regarding EAS membership, Japan called for an East Asia EPA
that encompassed Australia, New Zealand and India as well as the 10 ASEAN states andthe three Northeast Asian countries of China, Japan and South Korea.46 As part of thisstrategy to counter China’s regional influence, Japan has pushed for an FTA with
Australia –despite domestic agricultural opposition—to reinforce the growing security
cooperation between Tokyo and Canberra and to balance Australia’s growing economic
ties with China.47
Finally, political-security competition has also animated China’s FTA policies.
The launching of Japan-Singapore FTA negotiations encouraged China to push for an
FTA with ASEAN as a whole. China persuaded the ASEAN states that fearedcompetition from China by offering differential treatment for less developed ASEAN
states and an “early harvest” of tariff reduction for agricultural products.48 Although anurge to “catch-up” with Japan might have been the original impetus for China, someinterpreted the move as power play to achieve a leadership position relative to Japan.
According to one observer, China may be developing “a useful building block toward
ensuring China’s leadership role in the region.”49 An analyst from Taiwan has asserted,“a China-ASEAN FTA may help dilute US influence in the region.”50 But there was adefensive competitive calculation as well. China’s FTA initiative toward ASEAN waspart of an omnidirectional foreign policy to improve relations with its neighbors andreassure the region about China’s peaceful rise and to prevent Southeast Asia fromaligning against China.51 At the same time as China announced in November 2002 its
objective to forge an FTA with ASEAN, China and ASEAN issued a joint statement ofcooperation on “nontraditional security issues” and the Declaration on the Conduct ofParties in the South China Sea. In October 2003, China then acceded to the 1976 Treatyof Amity and Cooperation (TAC) in Southeast Asia.52
China has also promoted FTAs in Northeast Asia. In the context of theASEAN+3 (China, Japan and South Korea) forum that emerged in the wake of the 199798 regional financial crisis, China proposed in November 2002 a feasibility study for a16trilateral China-Japan-South Korea FTA.53 After this FTA proposal did not get muchtraction, China shifted gears to seek a bilateral FTA with South Korea.54 According tosome Chinese analysts, the ultimate objective is the creation of an East Asian Free Trade
Agreement (EAFTA). To achieve this, Zhang Yunling of the Chinese Academy of Social
Sciences has argued for the establishment of three parallel FTAs with each tying one of
the Northeast Asian countries to ASEAN: China-ASEAN, Japan-ASEAN, and ROKASEAN. Then an EAFTA would be established by unifying “the separated arrangements
into an integrated framework.” Zhang has also downplayed Sino-Japanese rivalry in thisprocess: “While China would like to see an East Asian FTA in place as early as possible,
and is using the China-ASEAN FTA to forge such a grouping, the move is in no way
intended to reduce Japanese interests in ASEAN or exclude Japan from East Asia.”55 But
in response to a question about the U.S. role, Zhang reportedly stated that “EAFTA will
not invite the U.S., otherwise it will become like APEC.”56 Such statements by Chinese
analysts about excluding the United States from the EAFTA have fueled suspicions that
Beijing’s regional FTA policy might be one element of a long-term agenda to reduce U.S.
influence in the region relative to China’s. While being careful to credit Malaysia forpushing for an East Asia Summit (EAS), China has vigorously backed the idea. One of
the three conditions articulated by ASEAN for membership in the EAS (signing onto theTreaty of Amity and Cooperation in Southeast Asia) poses a difficult hurdle for theUnited States because the TAC might constrain U.S. military options.57
FTA Policies of the Secondary States
How have political-security calculations shaped the FTA policies of the secondary
states?
Regarding South Korea, the 1997 regional financial crisis motivated President
Kim Dae Jung to improve relations with Japan. In this context, South Korean policy
analysts floated an FTA with Japan as a good way to promote more stable and friendly
relations between these two countries. Bilateral tensions over historical issues andterritorial disputes as well as economic constraints prevented a take-off in Japan-ROK
FTA talks, and South Korea concluded its first bilateral FTA with Chile instead.
Nevertheless, according to Min Gyo Koo, negotiating an agreement with Chile provided

17
valuable preparation for engaging the larger trade partners –Japan and the UnitedStates.58 South Korea ended up concluding an FTA with United States in spring 2007
while the talks with Japan stalled in the context of deteriorating bilateral political
relations between Seoul and Tokyo. In the case of ROK discussions with the US,
buttressing a problematic security relationship served as a strong incentive for the South
Korean leadership to make the extra effort not to have the negotiations fail. Moreover, theconclusion of the US-Korea FTA gave further impetus to push ahead with the trade talks
with Japan and even to argue that an FTA with China was inevitable.59 This behavior
may reflect a broader geopolitical interest on the part of South Korea to serve as a bridge
between China and Japan.60
In terms of Southeast Asia, the case of Singapore illustrates how a small state’s
desire to overcome its political-security vulnerability can be a strong motivation for the
pursuit of FTAs. According to Michael Leifer, Singapore harbored a strong sense ofvulnerability by being wedged between Malaysia and Indonesia –two large Islamic
countries that had at times challenged Singapore’s interests. Therefore, the city-statesought to strengthen ties with extra-regional states. Even at the risk of provoking
frictions with some ASEAN states, Singapore had a keen interest in using FTAs toanchor the United States and Japan as regional stakeholders.61 The rise of China also
factored into this strategic equation. Singapore signed a strategic partnership agreementwith China in 2000 and has signaled its unwillingness to join either the United States orJapan in a strategy to contain China. But at the same time, Singapore has been quite
willing to play a hedging game with these three major powers.62
Singapore’s move to go beyond the ASEAN framework to forge FTAs withmultiple extra-regional partners initially provoked intra-ASEAN criticisms that Singapore
was undermining ASEAN regional-community building.63 Rather than blocking such
extra-regional initiatives, however, just about all the ASEAN states eventually joined the
FTA bandwagon. And Singapore found in Thailand a good partner to trail blaze thismovement. As Christopher Dent warns, the “economic Darwinism of competitive
bilateral FTAs” has the danger of undermining ASEAN cohesion insofar as Singapore
seeks to establish itself as Southeast Asia’s “premier entrepot hub economy.”64 But aslong as Singapore with the help of Thailand is able to pull the other ASEAN states along,18
then there does not have to be an unraveling of ASEAN. Even as Singapore tries to be
ASEAN’s hub economy, ASEAN as a whole is striving to be the “hub” for East Asian
economic integration and community-building by continuing to promote its own ASEAN
Free-Trade Area (AFTA) and by collectively engaging non-ASEAN states in FTA
negotiations.65 According to Evelyn Goh, ASEAN’s FTA policy is now part of an“omni-enmeshment” strategy to moderate major power competition.66
For Australia, the pursuit of FTAs marked a major departure from its commitment
to multilateral mechanisms for trade liberalization. Although a realization that neither
APEC nor WTO would be able to drive liberalization as well as a recognition that FTAs
could bring significant economic gains go far in explaining this policy shift, the greater
receptivity of Washington to such preferential trade agreements and the possibility that abilateral U.S.-Australia FTA might put the security alliance with the United States onmore solid ground were contributory factors.67 Canberra was also responding toWashington’s concerns that Australia might be being too accommodative of China’s
security interests (especially about Taiwan) because of Australia’s China economic fever.
Therefore, to re-balance its foreign policy between the US alliance and China, theHoward government opted not only to enhance US-Australia-Japan security cooperation,
but also to pursue an FTA with Japan as well as with the United States.68 But this
responsiveness to U.S. pressure did not mean that Canberra was willing to join
Washington and Tokyo in a balancing much less a containment strategy against China.
Prime Minister John Howard noted that “Australia’s interests would be best served if the
U.S. would allow China a somewhat bigger regional role, in return for China allowing
Japan a larger say in regional affairs.”69 Similar to ASEAN, Australia has completed orlaunched FTA negotiations with a variety of partners including China.70
Taiwan’s FTA policy is motivated by a strong desire to reduce its vulnerability
and political isolation in the context of a rising China and negative trends in the ChinaTaiwan balance of military and economic power. As Beijing has gradually chipped away
at the countries that have diplomatic relations with Taipei, Taiwan has moved vigorously
to negotiate FTAs with states with which it still has official relations. Therefore, Taiwan
has concluded bilateral FTAs with Panama, Guatemala and Nicaragua and a trilateral one
with El Salvador and Honduras. But the big prize would be an FTA with the United

19
States and Japan –both countries that will play an important role in a Taiwan Strait crisis.
Although Washington and Tokyo have publicly declared its interest in a peacefulresolution of the Taiwan issue, both capitals have refrained from entering into formal
talks about an FTA with Taiwan for fear of provoking China. There has been a sharp
political divide within Taiwan about how best to deal with China. Although the DPPgovernment under Chen Shui-bian pushed for a more independent Taiwan identity
despite strong protests from China and even the United States, the Kuomintang under Ma
Ying-jeou has advocated positive dialogue with the mainland. In fact, Ma in July 2007
announced that if elected the next Taiwan president, he would seek some kind of “closer
economic partnership” with China similar to the arrangement that exists between China
and Hong Kong. As a complement to this new policy, Ma stated that a KMT government
would also seek FTAs with Hong Kong, Singapore and South Korea.71
The above survey certainly confirms the hypothesis that political-security
competition between the United States and China and between Japan and China has been
one of the key motivators behind the FTA policies of these three major powers.
Conversely, the absence of serious discussions of FTAs between China on the one hand
and the United States and Japan on the other hand suggest that the incipient politicalsecurity rivalry among these three major powers can serve as an inhibitor of FTA
policies.
The absence and weakness of other FTA initiatives, however, suggests that there
are also limits to the political-security competition hypothesis. First, despite Taipei’skeen interest in negotiating FTAs with both the United States and Japan for the strategic
purpose of vulnerability reduction and isolation avoidance, both Washington and Tokyo
have been reluctant because of their sensitivities toward Beijing. Second, the UnitedStates and Japan have so far not embraced a bilateral FTA with each other. Given the
progress in US-Japan defense cooperation since the mid-1990s, one might imagine a USJapan FTA as a good way to further bolster the alliance as China’s power and influencerises. In recent years, a number of U.S. policy analysts have advocated such a bilateral
FTA.72 For example, the February 2007 sequel to the famous Fall 2000 Armitage-Nye
Report on the US-Japan alliance stated the following:

20
The United States and Japan need to move quickly toward promoting andensuring the forces of free trade and economic integration by launchingnegotiations toward a bilateral free-trade agreement. This would become the hub
for an emerging network of FTAs in Asia and provide energy to the whole world
economy….
[The] direct economic benefits of a comprehensive U.S.-Japan free-trade
agreement would be considerable. However, the political and strategic benefits
for all of the members of the Asia-Pacific community would be even greater. For
the United States and Japan to sign an economic alliance agreement –based oncommon core principles every bit as strong as those that underlay the U.S.-Japan
Security Treaty—would send a remarkably powerful signal to the region and theworld.73
But despite such calls, the Bush Administration has not embraced this notion as strongly
as it did the FTAs with South Korea and Australia. In addition to the domestic politicalcomplexity of negotiating a U.S.-Japan FTA, perhaps both Washington and Tokyo did
not see a compelling political-security necessity for such an economic agreement given
the progress in bilateral security cooperation in recent years and their shared interest in
engaging rather than containing China.
The track record of secondary states shows that an interest in reducing politicalsecurity vulnerabilities (e.g. Singapore) or placating security patrons (e.g. South Korea
and Australia) can motivate these states to pursue FTAs. But what is also striking is that
virtually all of the secondary states and ASEAN as a whole are reluctant to use FTAs toreinforce the competitive tendencies among the major powers. In fact, the secondary
states are inclined to pursue FTA initiatives with all three major powers as part of theirstrategic interest in mitigating incipient major power rivalries.
Although this survey of FTA strategies does support the notion that politicalsecurity calculations can contribute to the choice and timing of FTA partners,
determining the actual power of the political-security variable requires much moredetailed investigation than is possible in this paper. For instance, it is not clear if
political-security incentives are powerful enough to overcome domestic resistance ordivergent economic interests to bring an FTA negotiation to a successful conclusion. The

21case of the previously unimaginable Australia-Japan FTA negotiations does suggest thatpolitical-security motivations might trump formidable domestic political resistance inJapan from the agricultural lobby. But since these talks are still a work in progress, wecannot yet assess the relative power of the strategic variable. One possible hypothesis isthat because the competitive strategic dynamics in the Asia-Pacific (especially among the
major powers) remains moderate rather than extreme, the power of political-security
calculations to trump domestic political and economic impediments to FTAs is likely to
be modest. Whether or not the US-ROK FTA wins US Congressional approval will be agood test of this hypothesis.
Conversely, it is worth investigating whether convergent economic and domestic
commercial interests are powerful enough to overcome political-security impediments to
FTAs. For example, will economic interests between Japan and China or between Japanand South Korea be convergent enough to overcome existing political-security
impediments? So far the answer appears to be negative. But the recent improvement ofJapan-China and Japan-ROK relations suggests that a closer look at the prospects for a
Northeast Asia FTA is warranted. When the economic interests are not convergent
enough and the political-security impediments are too formidable, FTAs are unlikely tobe realized. However, growing economic convergence coupled with a reduction ofpolitical-security impediments might present a favorable threshold for an FTA
breakthrough.
Regional Political-Security Consequences: Beyond the Noodle Bowl
How does the varied pattern of intra-regional and extra-regional FTA initiatives
matter for political-security relations in East Asia? Is the FTA phenomenon steering theregion toward a particular political-security order or architecture rather than simply
constituting a “noodle bowl” as some critics charge? One way to address these questions
is to consider how these trade agreements promote or undermine competitive andcooperative tendencies in the regional system. Does the FTA movement reinforce or
counter regional rivalries, and does the FTA movement reinforce or undermine efforts atregional political-security cooperation?

22Competitive Tendencies
Insofar as the rise of China is shaping East Asia’s strategic landscape, theincipient competitions between China and Japan and between China and the UnitedStates are likely to play a defining role in the future regional order.
It is now commonplace to see the Sino-Japanese relationship as one of strategic
rivalry.

74

Frictions about history, territorial disputes, competition about maritime

resources, and clashing nationalisms have certainly made relations between these twocountries problematic. The regional FTA race –especially regarding the ASEAN states-appears to reflect and reinforce this bilateral rivalry. But who is leading whom?
Although China’s flexible approach toward an FTA with ASEAN suggests that Chinamight be ahead of Japan in the Southeast Asia game, one should not forget that Japan has
invested heavily over three decades in ASEAN in both commercial and diplomatic terms.
So in a sense, China rather than Japan may be playing catch-up. Furthermore, the magnet
of Chinese economic power has reinforced Southeast Asia’s interest in keeping Japaneconomically and diplomatically engaged.
More so than the Sino-Japanese relationship, the Sino-American relationship islikely to exert the profound structural impact on East Asian regionalism for the simple
reason that China and the United States are matched more in terms of size and potential
power. From Washington’s perspective, China represents the only country with thepossibility of challenging American military primacy in the Western Pacific. From
Beijing’s perspective, a U.S. containment policy against China would undermine its longterm strategy of economic and military modernization. Concrete issues such as the futureof Taiwan, trade imbalances, and divergent political systems have fueled mutualsuspicions.
Realist logic suggests that as China’s power rises, the United States will balanceagainst China, and Japan is likely to join the United States in such a balancing effort.
Indeed for many Chinese analysts, the recent strengthening of the U.S.-Japan alliance andthe “multilateralization” of the U.S. network of bilateral alliances signal the danger ofsuch an anti-Chinese coalition emerging. But for the time being, the United States andChina have opted for mutual positive engagement for reasons of economic
interdependence and shared security interests (e.g. regarding North Korea and the war on

23
terrorism). And China and Japan have been working to prevent a downward spiral intheir bilateral relations. Nevertheless, as noted earlier, all three powers are hedging
against worst-case scenarios.75 For the United States and Japan, the rise of a threatening
and ambitious China that seeks to weaken US presence and influence in East Asia and toestablish a hierarchical or hegemonic regional order with China on top. For China, aregional containment effort against China led by a solid U.S.-Japan alliance.
How then does the FTA movement fit into this evolving strategic equation?
Remarkably, these three major powers have refrained from using FTAs with each other tocounter the competitive tendencies between China on the one hand and the United States
and Japan on the other. Neither a US-China FTA nor a Japan-China FTA has been underserious discussion, much less negotiation. Consideration of a trilateral Northeast Asia
FTA composed of China, Japan and South Korea that could contribute to fostering better
Sino-Japanese relations has not gotten far as well. Fundamental economic asymmetries
appear sufficient to explain the absence of strong initiatives on behalf of such FTAs.
The major powers, however, appear to be using FTAs with third parties to checkpotential negative strategic trends. To reassure other regional states about China’s rise
and to prevent the emergence of a broad-based regional coalition to contain China,
Beijing has promoted FTAs with ASEAN, South Korea, and Australia and supported an
East Asian FTA and an East Asia Summit. To try to secure US economic and security
presence in East Asia in the face of China’s rise, Washington has in turn signed FTAs
with Singapore, South Korea and Australia, launched the EAI for Southeast Asia, and is
beginning to refocus on APEC. And to prevent China from gaining a predominantposition in East Asia, Tokyo has been negotiating EPAs with individual ASEAN states,
proposing an East Asia EPA that includes Australia, New Zealand and India, andcontinuing FTAs with South Korea.
The above competitive interaction of FTA initiatives along with other diplomaticand security maneuvers block for the time being any regional hegemonic projects on thepart of any of the three major powers. At the economic level, the United States, Japanand China may compete for leadership regarding whose model of economic liberalizationand integration will become the norm. But such competition does not directly translate
into regional leadership in the political-security realm. Competitive FTA initiatives may

24
also have the effect of indirectly mitigating strategic rivalries between China and Japanand between China and the United States. The fact that virtually all of the secondary
states in the region want to reach out to all three powers indicate that they are reluctant topick sides in a great power rivalry in the region.
Finally, the notable restraint that the United States and Japan have exercised in
responding to Taiwan overtures for an FTA show that both Washington and Tokyo arecareful not to use FTAs to provoke Beijing about what it considers to be a vital politicalinterest. In other words, even though FTA initiatives may reinforce incipient major
power rivalries, they have not been used to exacerbate such rivalries. As the possible
shift in Taiwan’s policies suggest, Taipei could mitigate the problem by pushing for someversion of an FTA with Beijing.
Cooperative Tendencies
After the end of the Cold War, a number of fledgling multilateral dialogues atboth the official and non-official levels have emerged to foster security cooperation.
They include the ASEAN Regional Forum, the Track-2 Northeast Asia Cooperation
Dialogue (NEACD), and the IISS Shangri-la Dialogue. Some have even argued that the
Six-Party Talks about North Korea’s nuclear program provides the basis for establishinga cooperative Northeast Asia security institution. But compared to the resilient UScentered security alliance system in the Asia-Pacific, these multilateral forums are so far
primarily talk-shops that are unable to address hard security challenges or even to
promote substantial military transparency and mutual reassurance measures. Therefore towhat extent does the FTA movement aid or hinder the development of multilateral
security cooperation beyond the use of bilateral FTAs to buttress existing alliances?
The FTA bandwagon has been accompanied by increasing voices for regional
community-building. Although the creation of a security community for East Asia in thesense that Karl Deutsch originally employed the concept may be illusive for theforeseeable future, optimists believe that regional economic interdependence andintegration might eventually provide the material foundations for cooperative security.76
And to the extent that the FTA movement might promote regional economic integration,
the same movement would in turn foster security cooperation. Indeed the above survey

25
of national cases shows that even with their competitive elements, bilateral FTAs havealso been used as tools of cooperative diplomacy and reassurance.
But where the FTA movement becomes most salient for the prospects ofmultilateral cooperative security mechanisms are proposals for various multilateral as
opposed to bilateral FTAs. A key consideration is the degree of matching between
possible security forums on the one hand and possible regional FTAs on the other. In theearly 1990s, APEC as a region-wide economic forum and ARF as a region-wide security
dialogue represented a near perfect match on the face of it. Both forums bridged the twosides of the Pacific rather than dividing them. But there was also a difference thatprevented them from being mutually reinforcing. Whereas APEC was seen as diluting
the role of ASEAN, ARF was firmly anchored around ASEAN. Therefore, while APEC
focused on trying to bridge trans-Pacific divisions regarding the modality of regional
economic liberalization, ARF adhered to ASEAN norms and concentrated on security
issues more relevant to Southeast Asia rather than Northeast Asia.
As APEC waned in the wake of frictions over the EVSL negotiations and the
1997-98 regional financial crisis, ASEAN reasserted itself in regional economic
dialogues through the ASEAN+3 process which excluded the United States. Singapore’s
FTA trailblazing and the Sino-Japanese competition regarding ASEAN have madeASEAN one of the FTA regional hubs. This is evident in the way both China and Japanare willing to respect ASEAN as a focal point. Both the Chinese concept of an East
Asian FTA and the Japanese notion of an East Asian EPA keep the center of gravity
around ASEAN. If the East Asian Summit process purports to build upon such a regional
FTA project and to have an expansive agenda that includes political and security issues,
the absence of the United States becomes problematic. Even if as Japan hopes Australia
and India might help to counter China, an EAS without the United States could become
the first step in a gradual erosion of US influence. The ball now appears to be in the US
court about whether it will make a serious effort to be a part of EAS by signing on to the
TAC with some modifications. But the risk of such a move from the perspective of East
Asia community-building is that a vigorous U.S. attempt to alter TAC norms (especiallyregarding non-intervention) with the help of allies like Japan, Singapore, and Australia
might be enough to blow apart the fragile EAS community-building project.

26
There are two alternative paths to multilateral security cooperation that would
give the United States a central role. One is the Northeast Asian path that could build
upon the 6-party talks and the track-2 NEACD. Although the Northeast Asian trilateral
FTA concept floated by China has floundered, the United States could build on its FTA
with South Korea to negotiate a “comprehensive economic partnership” with Japan toestablish a new gold standard for international economic liberalization. Such an
achievement would put the US and its allies in the economic driver seat at least for FTAs
in Northeast Asia. Regional economic liberalization, of course, does not address thecritical obstacles to Northeast Asian cooperative security; but if the 6-party talks do provesuccessful in putting North Korea on the path of denuclearization, then the time could
become ripe for laying the groundwork for a Northeast Asia cooperative security orderthat is more to America and Japan’s liking –one in which China’s voice is notpredominant and South Korea remains anchored to the US alliance network.
The other alternative path might be the vision of Pacific community articulated byPresident Bill Clinton in the context of the first APEC summit back in 1993. But thispath would require that the United States with the help of friends and allies in East Asia
resurrect the goal of a free-trade area of the Asia-Pacific and to strengthen APEC as “thepre-eminent regional economic forum” –as declared by the United States and Japan in
their joint statement on alliance transformation in May 2007.77 Eventually, APEC or a
related trans-Asia-Pacific forum could begin to address more forthrightly various security
issues. This option would inevitably take the initiative away from ASEAN and istherefore likely to be resisted strongly by several Southeast Asian states. The advantageof this course would be that the United States and its allies would be less constrained by
ASEAN norms that have hampered substantive progress in ARF.78 But it remains to be
seen how much other Asian countries would go along with a U.S.-led drive formultilateral security cooperation. If the United States is too overbearing and impatient,then the effort could provoke a backlash that could in turn fuel the geopoliticalcompetitive tendencies in the region.

27

NOTES
1

John J. Mearsheimer, The Tragedy of Great Power Politics (New York: W.W. Norton,
2001).
2

Charles L. Glaser, “Realists as Optimists: Cooperation as Self-Help,” International
Security Vol. 19, No. 3 (Winter 1994/95), 50-90.
3Robert O. Keohane and Lisa L. Martin, “The Promise of Institutionalist Theory,”
International Security Vol. 20, No. 1 (Summer 1995), 39-51; and Charles A. Kupchan
and Clifford A. Kupchan, “The Promise of Collective Security,” International Security
Vol. 20, No. 1 (Summer 1995), 52-61.
4

Ming Wan, “Economic Interdependence and Economic Cooperation: Mitigating
Conflict and Transforming Security Order in Asia,” in Muthiah Alagappa (ed.), Asian
Security Order: Instrumental and Normative Features (Stanford: Stanford University
Press, 2003), 280-310.
5

Bruce Russett, Grasping the Democratic Peace: Principles for a Post-Cold War World(Princeton: Princeton University Press, 1993); and John M. Owen, “How Liberalism
Produces Democratic Peace,” International Security Vol. 19, No. 2 (Fall 1994), pp. 87125.
6

Christopher Dent provides a useful taxonomy of possible political-security motivations
for states to pursue FTAs in the Asia-Pacific region. See Christopher M. Dent, New Free
Trade Agreements in the Asia-Pacific (New York: Palgrave Macmillan, 2006), pp. 51-53.
7

Walter Mattli, The Logic of Regional Integration: Europe and Beyond (Cambridge:
Cambridge University Press, 1999).
8

Joanne Gowa, Allies, Adversaries, and International Trade (Princeton: Princeton
University Press, 1994).
9

Galia Press-Barnathan, Organizing the World: The United States and Regional
Cooperation in Asia and Europe (New York: Routledge, 2003); and Joseph M. Grieco,“Realism and Regionalism: American Power and German and Japanese Institutional
Strategies During and After the Cold War” in Ethan B. Kapstein and Michael
Mastanduno (eds.), Unipolar Politics: Realism and State Strategies After the Cold War(New York: Columbia University Press, 1999), 319-353.
10

Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley:
University of California Press, 1980).

28

11

Michael Wesley, “The Strategic Effects of Preferential Trade Agreements,” Australian
Journal of International Affairs Vol. 62, No. 2 (June 2008), 216, 224-225.
12

Joseph Grieco, “State Interests and Institutional Rule Trajectories: A Neorealist
Interpretation of the Maastricht Treaty and European Economic and Monetary Union,”
Security Studies Vol. 5, No. 3 (1996), 261-305.
13

Alejandro Ibarra-Yuenz, “Spaghetti Regionalism or Strategic Foreign Trade: Some
Evidence for Mexico,” Journal of Development Economics Vol. 72 (2003), 567-584.
14

Michael Mastanduno, “Incomplete Hegemony: The United States and Security Orderin Asia,” in Muthiah Alagappa (ed.), Asian Security Order: Instrumental and Normative
Features (Stanford: Stanford University Press, 2003), 141-166.
15

Mearsheimer, The Tragedy of Great Power Politics, 139.

16

Evan S. Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,”
Washington Quarterly Vol. 29, No. 1 (Winter 2005-06), 145-167. See also David Kang’scase for “middle strategies” of hedging and accommodation between the extremes ofbalancing and bandwagoning: David C. Kang, China Rising: Peace, Power, and Order in
East Asia (New York: Columbia University Press, 2007), 52-54.
17

Douglas Lemke, “The Continuation of History: Power Transition Theory and the Endof the Cold War,” Journal of Peace Research Vol. 34, No. 1 (1997), 23-36. On theconcept of revisionist states, see Randall L. Scweller, Deadly Imbalances: Tripolarityand Hitler’s Strategy of World Conquest (New York: Columbia University Press, 1998),
19-26.
18

Mearsheimer, The Tragedy of Great Power Politics, 5.

19

Robert S. Ross considers Japan to be a secondary state for these reasons. See Robert S.
Ross, “Balance of Power Politics and the Rise of China: Accommodation and Balancing
in East Asia,” Security Studies Vol. 15, No. 3 (July-September 2006), 357.
20

Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,” 146-153;
Aaron L. Friedberg, “The Future of U.S.-China Relations: Is Conflict Inevitable,”International Security Vol. 30, No. 2 (Fall 2005), 7-45; and Thomas J. Christensen,“Fostering Stability or Creating a Monster: The Rise of China and U.S. Policy toward
East Asia, International Security Vol. 31, No. 1 (Summer 2006), 81-126.
21

Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,” 153-159;
Rosemary Foot, “Chinese Strategies in a US-Hegemonic Global Order: Accommodatingand Hedging,” International Affairs Vol. 82, No. 1 (2006), 77-94; Avery Goldstein,
Rising to the Challenge: China’s Grand Strategy and International Security (Stanford:
Stanford University Press, 2005); and David Shambaugh, “China Engages Asia:

29

Reshaping the Regional Order, International Security Vol. 29, No. 3 (Winter 2004/05),
64-99.
22

Mike M. Mochizuki, “Japan’s Shifting Strategy toward the Rise of China,” Journal ofStrategic Studies Vol. 30, No. 4-5 (August-October 2007), 739-776.
23

Christopher Twomey, “Japan, a 'Circumscribed Balancer': Building on Defensive
Realism to Make Predictions about East Asian Security," Security Studies Vol. 9, no. 4(Summer 2000), 167-205.
24

Eric Heginbotham and Richard J. Samuels, “Japan’s Dual Hedge,” Foreign Affairs
Vol. 81, No. 5 (September/October 2002), 110-121.
25

Alastair Iain Johnston, “Beijing’s Security Behavior in the Asia-Pacific: Is China a
Dissatisfied Power?” in J.J. Suh, Peter J. Katzenstein, and Allen Carlson (eds.),
Rethinking Security in East Asia: Identity, Power, and Efficiency (Stanford: Stanford
University Press, 2004), 77.
26

Kang, China Rising, 55-56, 104-125; and Ross, “Balance of Power Politics and theRise of China,” 380-383.
27

Kang, China Rising, 126-152.

28

Evelyn Goh, “Great Powers and Hierarchical Order in Southeast Asia: Analyzing
Regional Security Strategies,” International Security Vol. 32, No. 3 (Winter 2007/08),
113-114. See also Ross, “Balance of Power Politics and the Rise of China,” 389-391;
and Amitv Acharya and See Seng Tan, “Betwixt Balance and Community: America,
ASEAN, and the Security of Southeast Asia,” International Relations of the Asia-PacificVol. 6, No. 1 (2005), 37-59.
29

William T. Tow, “Sino-American Relations and the ‘Australian Factor’: Inflated
Expectiations or Discriminate Engagement?” Australian Journal of International Affairs
Vol. 59, No. 4 (December 2005), 451-467.
30

Purnendra Jain, “Japan-Australia Security Ties and the United States: the Evolution of
the Trilateral Dialogue Process and Its Challenges,” Australian Journal of International
Affairs Vol. 60, No. 4 (December 2006), 521-535; and Nick Bisley, “The Japan-Australia
Security Declaration and the Changing Regional Security Setting: Wheels, Webs andBeyond?” Australian Journal of International Affairs Vol. 62, No. 1 (March 2008), 3852.
31

Hugh White, “The Limits to Optimism: Australia and the Rise of China,” Australian
Journal of International Affairs Vol. 59, No. 4 (December 2005), 469-480.

30

32

Michael D. Swaine and Roy D. Kamphausen, “Military Modernization in Taiwan,” inAshley J. Tellis and Michael Wills (eds.), Strategic Asia 2005-06: MilitaryModernization in an Era of Uncertainty (Seattle: National Bureau of Asian Research,
2005), 387-422.
33

Ross, “Balance of Power Politics and the Rise of China,” 383-387.

34

John J. Mearsheimer, “China’s Unpeaceful Rise,” Current History Vol. 105, No. 690(April 2006), 160-162.
35

For example, Aaron L. Friedberg, “Ripe for Rivalry: Prospects for Peace in a
Multipolar Asia,” International Security Vol. 18, No. 3 (Winter 1993/93), 5-33.
36

Jeffrey J. Schott, “Assessing US FTA Policy,” in Jeffrey J. Schott (ed.), Free Trade
Agreements: US Strategies and Priorities (Washington, D.C.: Institute for International
Economics, 2004), 369-370.
37

Eul-Soo Pang, “Embedding Security into Free Trade: The Case of the United StatesSingapore Free Trade Agreement,” Contemporary Southeast Asia Vol. 29, No. 1 (2007),
8-9.
38

Pang, “Embedding Security into Free Trade,” 21.

39

Naoko Munakata, Transforming East Asia: The Evolution of Regional Economic
Integration (Washington, D.C.: Brookings Institution Press, 2006), 124-125.
40

Dean A. DeRosa, “US Free Trade Agreements with ASEAN,” in Schott (ed.), Free
Trade Agreements, 166-167.
41

During the November 2006 APEC summit in Vietnam, President George W. Bushpushed for feasibility studies about establishing an APEC-wide free trade zone. A longterm champion of APEC, C. Fred Bergsten –president of the Institute for International
Economics- has been one of the strongest advocates of an FTAAP. See C. Fred Bergsten,“Toward a Free trade Area of the Asia Pacific,” Policy Briefs in International Economics
No. PB07-2 (February 2007).
42

Munakata, Transforming East Asia, 118.

43

Elaine S. Kwei, “Chinese Trade Bilateralism: Politics Still in Command,” in Vinod K.
Aggarwal and Shujiro Urata (eds.), Bilateral Trade Agreements in the Asia-Pacific:
Origins, Evolution, and Implications (London: Routledge, 2006), p. 133.
44

Munakata, Transforming East Asia, pp. 120-121; and Ahearn, “Japan’s Free Trade
Agreement Program,” p. 7.

31

45

Munakata, Transforming East Asia, p. 117.

46

Yumi Wijers-Hasegawa, “METI’s Asia-Oceania FTA Pitch Surprises But Is
Predictable: Seizing the Initiative Before It’s Too Late,” Japan Times, April 18, 2006;
and “Keisanshō: Chūgoku ni Taikō Shin Tsūshō Senryaku,” Asahi Shimbun, July 28,
2006, p. 10.
47

Ann Capling, “Preferential Trade Agreements as Instruments of Foreign Policy: An
Australia-Japan Free Trade Agreement and Its Implications for the Asia Pacific Region,”
Pacific Review Vol. 21, No. 1 (March 2008), 33-34.
48

Munakata, Transforming East Asia, pp. 118-119.

49

Kwei, “Chinese Trade Bilateralism,” p. 129.

50

Quoted in Kwei, “Chinese Trade Bilateralism,” p. 133. The original source is thefollowing: Kwei-Bo Huang, “The China-ASEAN Free Trade Area: Background,
Framework, and Political Implications,” Division of Strategic and International Studies,
Taiwan, February 20, 2002 [www.dsis.org.ts].
51

Kwei, “Chinese Trade Bilateralism,” p. 133; and Munakata, Transforming East Asia, p.
123.
52

Bates Gill, Rising Star: China’s New Security Diplomacy (Washington, D.C.:
Brookings Institution Press, 2007), pp. 35-36.
53

Munakata, Transforming East Asia, p. 128.

54

Zhang Jianping, “China’s FTA Arrangement with Other Countries and Its Prospects”(paper presented at the 2007 KPSA International Conference on “The Rise of Asia and Its
Future”), p. 121.
55

Zhang Yunling, “The ASEAN Partnership with China and Japan,” in ASEAN-Japan
Cooperation: A Foundation for East Asian Community (Tokyo: Japan Center forInternational Exchange, 2003), p. 232.
56

Zhang Yunling, “Future Perspective on EAFTA and China’s Strategy,” RIETI BBL
Seminar October 24, 2005 [http://www.rieti.go.jp/en/events/bbl/05102401.html]
57
58

Gill, Rising Star, 34-35.

Min Gyo Koo, “From Multilateralism to Bilateralism? A Shift in South Korea’s Trade
Strategy,” in Vinod K. Aggarwal and Shujiro Urata (eds.), Bilateral Trade Agreements in
the Asia-Pacific: Origins, Evolution, and Implications (London: Routledge, 2006), 145149.

32

59

“President Roh Says Seoul’s FTA with Beijing Inevitable,” Chosun Ilbo, May 23,
2007.
60

Koo, “From Multilateralism to Bilateralism?” p. 149.

61

Michael Leifer, Singapore’s Foreign Policy: Coping with Vulnerability (London:
Routledge, 2000); and Terada, “The Making of Asia’s First Bilateral FTA,” p. 6.
62Pang, “Embedding Security into Free Trade,” pp. 21-23.

63

In addition to the agreements with Japan and the United States, Singapore has
concluded FTAs with Australia, New Zealand, and South Korea and has been negotiatinga trilateral deal with Chile and New Zealand and bilateral ones with Canada, Mexico,
Panana and Peru.
64

Christopher M. Dent, “The New Economic Bilateralism in Southeast Asia: RegionConvergent or Region-Divergent?” International Relations of the Asia-Pacific Vol. 6(2006), pp. 93-96, 104-105.
65

Hadi Soesatro, “Regional Integration in East Asia: Achievements and Future
Prospects,”Asian Economic Policy Review Vol. 1 (2006) pp. 227-229; and Eng Chuan
Ong, “Anchor East Asian Free Trade in ASEAN,” Washington Quarterly Vol. 26, No. 2(Spring 2003), p. 58.
66

Goh, “Great Powers and Hierarchical Order in Southeast Asia,” 125, 139-144.

67

John Ravenhill, “The New Bilateralism in the Asia-Pacific?” Third World Quarterly
Vol. 24 (2003), pp. 300-305; and Nick Bisley, “Asia-Pacific Regionalism andPreferential Trade Agreements: the Australian Case,” International Relations of the AsiaPacific Vol. 14 (2004), pp. 251-252.
68

Capling, “Preferential Trade Agreements as Instruments of Foreign Policy,” 34-36.

69

Gill, Rising Star, pp. 152-153.

70

John Ravenhill, “Preferential Trade Agreements and the Future of Australian Trade
Policy,” Australian Journal of International Affairs Vol. 62, No. 2 (June 2008), 121-128;
and Yang Jiang, “Australia-China FTA: China’s Domestic Politics and the Roots ofDifferent National Approaches to FTAs,” Australian Journal of International Affairs Vol.
62, No. 2 (June 2008), 179-195.
71“Taiwan’s Ma Seeks FTA with China,” Daily Times, Pakistan, July 3, 2007.

33

72

Robert C. Fauver and Devin T. Stewart, “U.S.-Japan Comprehensive Economic
Partnership Agreement: Cementing a Geostrategic Economic Partnership,” SAIS Review
Vol. 23, No. 2 (Summer-Fall 2003), pp. 23-39; and Sherman Katz and Devin T. Stewart,“Comprehensive Economic Partnership Agreements (CEPA), The American Interest Vol.
2, No. 1 (September/October 2006), pp. 103-109.
73

Richard L. Armitage and Joseph S. Nye, The U.S.-Japan Alliance: Getting Asia Right
through 2020 (Washington, D.C.: CSIS, February 2007), pp. 17-18.
74

Ming Wan, Sino-Japanese Relations: Interaction, Logic, and Transformation(Washington, D.C.: Woodrow Wilson Center Press, 2006), pp. 331-345.
75

Medeiros, “Strategic Hedging and the Future of Asia-Pacific Stability,” 145-167;
Andrew Erickson and Lyle Goldstein, “Hoping for the Best, Preparing for the Worst:
China’s Response to US Hegemony,” Journal of Strategic Studies Vol. 29, No. 6(December 2006), pp. 955-986; and Mochizuki, “Japan’s Shifting Strategy toward theRise of China.”
76

Ming Wan, “Economic Interdependence and Economic Cooperation,” 280-305.

77

Joint Statement of the Security Consultative Committee Alliance Transformation:
Advancing United States-Japan Security and Defense Cooperation May 1, 2007[http://www.mofa.go.jp/region/n-america/us/security/scc/joint0705.html]
78

For an analysis of how Japan became disappointed with the ASEAN Regional Forum,
see Takeshi Yuzawa, Japan’s Security Policy and the ASEAN Regional Forum (London:
Routledge, 2007), pp. 150-166.

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