CEAC Commentary introduces outstanding news
analyses and noteworthy opinions in Japan, but it
does not represent the views of CEAC as an institution.

November 18, 2004

On CEAC and Community Building in East Asia
By ITO Kenichi
It is my honor to be here as one of the co-sponsors of the International Conference on “AsianEconomic Integration: Vision of a New Asia,” which is organized as a part of the RIS Work
Programme on Asian economic integration. Let me first briefly introduce how “The Council on
East Asian Community (CEAC),” one of the co-sponsors of the today’s conference, was foundedin Japan six months ago. And then let me touch upon my observation on the geographicalcoverage of the East Asian Community in question.
To tell the truth, until recently we, Japanese, were passive, if not indifferent, to the concept of an
East Asian community. Of course, it didn’t mean that we, Japanese, failed to understand theimportance of the regional cooperation in East Asia. On the contrary, Japan has always been oneof the major promoters of the regional cooperation in East Asia. Suffice it to say that Japan was
one of the countries that played a leading role in tackling with the 1997 financial crisis in East
Asia, as demonstrated by her role in organizing the Chian Mai Initiative which decisivelycontributed to the resolution of this financial crisis. But still, we, Japanese, had been behind themove advocating community building in the region until at least yesterday.
But today, I can say that the tide has turned. In December 2003 at the Japan-ASEAN Special
Summit meeting held in Tokyo Prime Minister Koizumi made it clear that Japan would support
the idea of community building in East Asia. Prior to that event, in September 2003 the 1 st
“Network of East Asian Think Tanks (NEAT)” Conference was held in Beijing. It was thisConference that made us, those who attended the Conference from Japan, feel that we need toorganize an all-Japan intellectual platform where we can deepen our understanding of theconcept of an East Asian community by way of conducting research and promoting policy
debates among ourselves.
Thus, “The Council on East Asian Community (CEAC)” was founded in Tokyo on May 18 thisyear. As of today, the membership of CEAC consists of representatives of 12 public policy thinktanks such as Japan Forum on International Relations, Japan Institute of International Affairs,
Japan Center for International Finance, etc. and 15 business corporations such as Nippon Steel,Toyota Motor, Tokyo Electric etc. in addition to 52 individuals who are mostly scholars but also
include some journalists and politicians. In response to our call, 9 government ministries such as
Foreign Ministry, Finance Ministry, Trade and Industry Ministry, Education and Science1

Ministry etc. also joined the activities of CEAC in their advisory capacity of Counselors. Former
Prime Minister, Nakasone Yasuhiro, was elected Chairman and myself President. In a series ofCEAC plenary meetings where all the Members and Counselors met, we discussed such issues
as whether an East Asian community was really necessary and feasible. What should be thegeographical coverage of the East Asian Community was also one of the topics that invitedheated discussions among us.
Based on the result of such arguments within CEAC, but not in the name of CEAC as CEAC is
not ready yet to announce its official position, I would like to present to you today rather myown personal view on the topic of what should be the geographical coverage of the East AsianCommunity. At this stage, the arguments on the concept of the East Asian Community floatedamong the ASEAN Plus Three (APT) countries are ramifications of the reports of “East AsianVision Group (EAVG)” and “East Asian Study Group (EASG),” both of which were drafted at
the request of the APT Summit meetings. Further refinements and modifications were added at
the 1 st and 2 nd NEAT Conferences in Beijing and Bangkok held respectively in 2003 and 2004.
As for the geographical coverage of the future East Asian Community, the current understanding
as adopted, for example, in the final resolutions of the 2 nd NEAT Conference in Bangkok
suggests that the 13 APT countries are, of course, included but that the final conclusion should
be postponed until an appropriate moment is reached in the future. While there was a consensus
that Mongolia, North Korea, Taiwan and Hong Kong be included in the future, there were novoices raised in favor of .the inclusion of Russia. Pros and cons of including Australia and New
Zealand were seriously discussed.
As for the United States, the question was not so much whether or not we should include it but
how to convince it of the merits of the East Asian Community for the United States. As we lookat the triangle trade structure between the US, China and the rest of East Asia, we discover thefact that the trade imbalance between the US and China is, in fact, nothing but the tradeimbalance between the US and East Asia as a whole because China’s trade deficit with the restof East Asia implies that the rest of East Asia is exporting their half-finished products to the USvia assembly factories in China. Thus, we find that the East Asian Community will continue tobe economically dependent upon the US market. Of course, in the 21 st century no region can be
economically autarkic, but it will be undeniable that East Asian Community is not economicallysustainable if US becomes hostile to it. This fact is reinforced by another fact that the peace andstability of the region depends decisively on the US military and security strategy. Anyhow, it
will be crucially important for the East Asian Community to agree with the US on how to define
its relationship with the United States.
Finally, as for India, frankly speaking, not much argument was made either in Bangkok or inBeijing. Welcoming the initiative of RIS to enlighten us on the importance of India for the East
Asian Community, I am looking forward to the exchanges of views and opinions today and2

tomorrow here in Tokyo. Thank you.
(This is the text of a speech delivered by Prof. ITO Kenichi, President of the Council on
East Asian Community, at the International Conference on “Asian Economic Integration:
Vision of a New Asia”, in Tokyo on November 18, 2004.)

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