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June 21, 2005

How East Asians Can Coexist and Prosper (1)By KINOSHITA ToshihikoWith China’s entry into the WTO and intra-industry specialization by the likes of multinational
companies, the prospect of economic integration in the East Asia region, the world’s key growtharea, is coming ever closer to fruition ahead of implementation of many free trade agreements.
The current rate of intra-East Asia trade is 54%, which is still lower than the rate of 64% in theEuropean Union, but higher than the 46% under the North American Free Trade Area (NAFTA).
As the region moves steadily closer to achieving many bilateral and region-wide free tradeagreements, this rate is expected to rise even higher.
As part of the process of regional economic integration, Kuala Lumpur, Malaysia, has been set
as the venue for the first East Asia Summit, due to be held in December this year. Although
ASEAN+3 Summits have been held annually in the past, there has been no such summit for EastAsia. What will change by holding the East Asia Summit? ASEAN+3 Summits have always
been hosted by ASEAN member countries, with the “3”, namely Japan, China, and South Korea,attending in the capacity of guests. At the East Asia Summit on the other hand, ASEAN
countries, Japan, China, and South Korea will all attend as equal partners. The fact thatIndonesia has clung to the current format is down to concerns that it might lose the initiative it
currently has as an ASEAN member country.
At the end of 2003, the Japanese government hosted the Japan-ASEAN Summit in Tokyo, which
saw Prime Minister Koizumi Junichiro calling for an East Asia Community. However, Tokyo hasfeared that the process from an East Asia Summit to the creation of an East Asia Community
could become over politicized in areas such as the formulation of a vision. The phrase “EastAsia Community” has an almost magic ability to stir up the passions of those living in the region.
It is all very well for each individual country to put forward its own ideas, but when countries
set forth the likes of major political doctrines in an attempt to get their opinions through, there isa risk of stirring up regional conflict and unnecessarily provoking countries outside the region
such as the United States. Once we start to touch upon the problem of what sort of vision an East
Asia Community should be based on, a whole host of problems is likely to spring forth, such as
different languages, religions, cultures, ideologies, and differing stages of development. If
anything, what the region needs right now is a functional approach designed to enhance regional
economic integration by free trade agreements and, in the case of Japan, a comprehensive
economic partnership agreement (EPA) package including the establishment of investment rules,

1the protection of intellectual property, the exchange of human and educational resources, andfinancial cooperation. In other words, if we push ahead in deepening economic integration, thefuture direction is likely to become apparent of its own accord, without any need to antagonize
countries outside the region.
The country most eager to bring about an East Asia Community is Malaysia, which put forward
the EAEC over ten years ago only for it to be terminated at the ideas stage due to US opposition.
Malaysia has stressed the fact that a free trade agreement alone will not solve the regional
problem, emphasizing the need to address the issues once again in order to strengthen the senseof unity in the region and develop a system based on a suitable vision.
China, which is in the running as a candidate to host the second East Asia Summit and is alreadyin the implementation phase of the free trade agreement with ASEAN, is also keen to see thisconcept become a reality. China’s goals, however, seemingly go beyond the purely economic,
such as expanding trade and procuring resources. As its first strategic partner in East Asia, China
has chosen ASEAN, which comprises “non-aligned” countries and a large population of Chinese
descent. China is also eager to work with Japan as part of the process of regional cooperationand the development of an East Asia Community and has even said that it would like Japan totake the initiative in some areas such as regional financial cooperation. This may appear
somewhat contradictory in light of the Chinese government’s actions in stating that the root
cause of all the recent anti-Japanese demonstrations in China lay with Japan and that Japan is
not entitled to a permanent seat on the Security Council of the United Nations. Nevertheless,there is a notion of the Five Principles of Peaceful Coexistence in China. Based on the policiesof non-intervention in other countries’ internal affairs and non-alignment, the government ispresumably thinking that cooperation between China and Japan within an East Asian frameworkis likely to reduce the influence of the United States. (It is worth noting, however, thatapparently China does not wish Japan to abandon its security arrangement with the United States
to move to an independent self-defense system.)
For its part, Japan attaches the utmost importance to its relationship with the United States andhas distanced itself from calling for the creation of an East Asia Community out of fears overmisplaced criticism from neighboring countries envisioning a repeat of the “Greater Asia
Co-prosperity Sphere” plan. However, as a result of factors such as a greater sense of regional
unity and consensus in East Asia due to the emergence of the European Union and NAFTA andthe damage caused by the Asian currency crisis, it has become increasingly apparent thatcommitting to regionalism is in Japan’s best interests.
Nonetheless, in an attempt to prevent the United States labeling East Asia as closed off tocountries outside the region, the Japanese government has continued to stress the need to invite
neutral countries that are geopolitically close and have strong economic ties to East Asia,
namely Australia, New Zealand, and India, to the first summit, even though they may not be2

regular members of the Community. Indonesia and Singapore both have a similar view.
Ultimately, the decision made at a meeting between the ten ASEAN Foreign Ministers on April
11 (to be formalized at ministerial meetings in July) was that India is to be invited to the firstsummit other than the ASEAN+3 countries, as India has signed the Treaty of Amity andCooperation in Southeast Asia (TAC). India has adopted the “Look East Policy.”(This is the text of an article by Mr. KINOSHITA Toshihiko, Professor of Waseda
University and Member of the Council on East Asian Community, which originallyappeared in the June 2005 issue of “The Japan Journal.”)3