ASEAN Extra-Regional Cooperation Triggers Regional Integration

This chapter contains two case studies of regional cooperation within Southeast Asia. The network analysis of ASEAN demonstrates that the region is dependent on extra-regional trade with the EU and the USA, but also with China and Japan. However, the region is not dominated by a single regional power, but by the four member states Indonesia, Malaysia, Singapore, and Thailand, each with comparable economic weight within the region. As a result, none of the ASEAN member states is ‘naturally’ privileged in its economic relations to extra-regional partners. Thus, regional defection in order to protect extra-regional economic privileges becomes less likely.

The first case study deals with regional cooperation within ASEAN in order to establish a free trade area in the early 1990s. The ASEAN Free Trade Area was clearly a project in the spirit of the New Regionalism. Its goal was to make ASEAN more attractive as an addressee of international investment flows. And indeed, the region was rather successful during the 1990s. It became a very popular destination of international investments, even if this was not only due to the free trade area, but also to other policies of economic liberalisation. The tides were turning when the Asian crisis hit the region during the end of the 1990s.

The second case study deals with the events after the Asian crisis. ASEAN was not able to provide a regional answer to that crisis, and many observers concluded from this fact that regional integration in Southeast Asia would stagnate in the following years. However, directly after the Asian crisis, the ASEAN+3 process started. The extra-regional countries China, Japan, and Korea suffered from the negative externalities of the Asian crisis and had an interest in stabilising their regional neighbourhood in economic terms. Thus, the Chiang Mai Initiative provides liquidity for the ASEAN member states in cases of crisis and three ASEAN+1 trade agreements grant access to China’s, Japan’s, and Korea’s markets. Due to this successful extra-regional cooperation, regional integration within ASEAN itself gained new momentum as well. The most important indicator of that is the adoption of the ASEAN Charter in 2007, which is a first step away from the ‘ASEAN way’ towards a more formalised regional organisation.