ASEAN+3 - the 10 countries of the Association of Southeastern Asian Nations (ASEAN) joined by Japan, China, and South Korea - agreed on the concept of an "East Asian Community" in its November 2000 summit meeting. This idea entails the establishment of an "East Asia Free Trade and Investment Zone" unifying Southeast and Northeast Asia and regular "East Asian summits" for discussing security issues as well as economic cooperation.

ASEAN should welcome many aspects of this move toward an East Asian Community, but should also be wary of certain other elements. Were Northeast Asia and Southeast Asia to establish a free trade zone and truly become one, the invigoration of the ASEAN economy as a whole that would result from the expanded movement of money, services, and people among countries in the zone would be a welcome development indeed. In addition, incorporating China, conventionally seen as a threat to ASEAN, into the community as a "partner" would markedly improve the security environment of ASEAN.

On the other hand, one element of concern is that the unity and solidarity of ASEAN as a regional organization have continued to weaken in recent years. Some ASEAN countries have economic structures capable of withstanding free trade and some do not. This being the case, a schism will eventually develop between countries incorporated into the free trade zone and those not, inducing a further widening of economic disparities and perhaps pushing ASEAN unity from weakness to full collapse. Another concern is the relative fall in the status of ASEAN that would accompany the unification of East Asia. In the ASEAN+3 meetings thus far, ASEAN has been the host and Japan, Chine, and South Korea guests, but East Asian summits would not necessarily be led by ASEAN.

The 2002 foreign ministers' meeting asserted, "further strengthening economic integration is an matter of priority in ensuring ASEAN's competitiveness," and again stressed the need for an ASEAN Free Trade Area (AFTA). With Malaysia, for example, postponing the reduction of tariffs on automobiles to protect its national car manufacturer Proton, however, the AFTA drive has lost momentum in recent years. At the same time, Singapore and Thailand have set out independently to conclude free trade agreements (FTAs) with Japan, the US, and the European Union (EU), and countries are beginning to step outside the framework of ASEAN to pursue liberalization policies on their own.

The solidarity of ASEAN has also been upset by the "+3" of the ASEAN+3. At the aforementioned foreign ministers' meeting, Malaysia proposed creating an ASEAN+3 secretariat in Kuala Lumpur. Singapore countered by declaring it still too early for such a move, and Indonesia, home to the ASEAN Secretariat, also came out in opposition, insisting that the functions of the secretariat in Jakarta must be strengthened first. ASEAN is becoming less "one" and more "one by one," a grave state of affairs.

　

In November 2002 China and ASEAN ratified a framework accord on economic cooperation toward the conclusion of an FTA within 10 years. China has also presented the five ASEAN nations (Thailand, Vietnam, etc.) in the Mekong River area with a general development plan, including capital assistance, for the river basin. The influence of China on ASEAN has thus expanded rapidly over the past year or two, and China continues to make a major turnaround in what has been seen heretofore as a "passive" foreign policy towards ASEAN.

Underlying these moves by China is the rapid growth that the Chinese economy has been enjoying over the past 20 years since the country was opened up, and the steady increase in the number of domestic companies capable of standing up to international competition. Even the Chinese government has recognized the importance of courting the ASEAN economies as markets to maintain a high rate of growth in its own economy. Attending the signing of the accord on FTA negotiations with ASEAN in November 2001, Premier Zhu Rongji said: "China is now implementing a‘going abroad' strategy, which encourages and supports enterprises with a competitive edge in making investments and setting up factories abroad and helps them also in terms of credit and insurance. The countries of ASEAN are considered priority areas for Chinese companies‘going abroad'."

ASEAN's Views on China's "offensive" vary by country. Singapore and Thailand are favorably disposed and have a positive outlook, while Indonesia, Malaysia, the Philippines and others feel there may be a danger of Chinese imports overwhelming their markets. Underdeveloped countries such as Vietnam and Cambodia are essentially out of the running altogether.

That ASEAN agreed to FTA negotiations with China despite these mixed opinions is perhaps the result of a general view having been formed that this would prove beneficial for ASEAN in the long run. It is not unthinkable, though, that acknowledgement by the 10 ASEAN nations that their aggregate influence still does not equal that of China as well as the decline in the status of Indonesia, formerly regarded as the leading power in ASEAN, were incidental factors in this decision.

Will the FTA between China and ASEAN in fact be realized within ten years as planned? The production structures of China and ASEAN (except Singapore) continue to compete in many areas such as electrical/chemical and light industry products, and the countries of ASEAN are in fierce competition with cheap Chinese goods even in their principal export market, the US. Inherent in greater economic cooperation is the risk that ASEAN might be unable to avoid being swallowed up by the Chinese colossus.

　

On a stopover in Singapore during his visit to several Southeast Asian nations in January 2002, Prime Minister Junichiro Koizumi made a policy speech in English that outlined Japan's basic foreign policy approach toward ASEAN. Regarding ASEAN as a "frank partner," he affirmed that the basic relationship should be one of "acting together--advancing together." In addition he proposed an "expanded East Asian Community" in which Japan and the countries of ASEAN would be joined by China, South Korea, Australia, and New Zealand. The prime minister pointed to East Asia as the region with the greatest potential for development in the immediate future and proposed a "comprehensive economic partnership" across a broad range of economic sectors - trade, investment, science and technology, tourism, etc. - in the course of realizing that potential.

ASEAN has, at least publicly, responded affirmatively to Japan's position as "having major implications strategically" (Goh Chok Tong, Prime Minister of Singapore). What are its true views, though? The nature of the cooperation discussed by Japan is far too abstract when compared to the suggestions put forth by China, and more than a few observers have voiced criticism and concern about Japan's ability to truly open its agricultural markets as ASEAN expects.

If Japan, which accounts for 60% of Asia's overall gross domestic product (GDP), is to play an appropriate role in the region and exercise leadership in developing economic ties in East Asia, then strengthening cooperative relations with ASEAN will be extremely important. With no end in sight, however, the serious downturn in the Japanese economy cannot help but hamper the regional economy as a whole. In that sense, a recovery in the sluggish Japanese economy is key to Japan's ability to exercise leadership in the expansion of economic ties in East Asia, and a failure in this regard could very well turn the Koizumi Initiative into nothing more than pie in the sky.

ASEAN fears that China could seize the initiative in the creation of an East Asia economic zone. ASEAN's diplomacy has been based on a sense of balance, maintaining its own stability through a balance of power among the major states. Should China's power grow too large in relative terms, ASEAN will inevitably be swallowed up by this colossus. Concerned by this possibility, ASEAN would like to have Japan play a more prominent role, and Japan needs to sufficiently understand and meet this expectation.

　

In the context of security in the narrow sense, most worrying for ASEAN are the problems of the South China Sea and the secret activities of international terrorist organizations that came to the forefront after the September 2001 terrorist attacks in the US. Here we would like to examine the issues bound up in the territorial disputes in the South China Sea. The South China Sea is an issue of considerable importance for Japan, too, as many of the tankers carrying petroleum from the Middle East pass through the South China Sea via the Singapore Straits before arriving in Japan.

At the Phnom Penh summit meeting held in November 2002, ASEAN and China ratified the "Declaration on the Conduct of Parties in the South China Sea." Since 1999 ASEAN had called on China to establish a binding "code of conduct" but, in the end, ASEAN's compromise with China produced little more than a gentlemen's agreement with no binding force. Malaysia and other countries had leaned in favor of China, brushing aside the insistence of the Philippines and Vietnam on a strict "code of conduct," and in the process exposing the disunity in ASEAN's ranks on security affairs as well.

ASEAN founded the ASEAN Regional Forum (ARF), whose members include Japan, China, and South Korea as well as the US and Australia, as the only forum for multilateral security dialogue in East Asia. The basic principle set out for conducting this forum was that discussions be pursued at "a pace comfortable for all of the participating countries." Accordingly, an issue that any single country wished to avoid would not even come up for discussion. China, for instance, was almost consistently negative towards any "code of conduct" that would inevitably restrict its own actions, and no accord would likely have been forthcoming even if the 10 ASEAN countries had called for it in unison. ASEAN's compromise in the "Declaration" was in this sense its second best option; looked at another way, though, it could be said that China continues to lead the way in forming the South China Sea security environment.

At the ARF Cabinet Ministers' Meeting held in Brunei in July 2002, the situation on the Korean peninsula became the central topic of discussion. With regard to the Yellow Sea gunboat battle between North and South Korea that occurred shortly before the meeting, the Ministry of Foreign Affairs' website noted that "expectations were clearly expressed that the matter would be resolved in a manner that does not heighten tensions on the Korean peninsula," and that "North Korea has expressed its regrets concerning this incident, and its proposal for reopening the North-South Cabinet Minister Level Meetings was welcomed as a positive development." "Clearly expressing expectations" and "welcoming positive developments" is easy. The problem lies in determining the causes and background factors that resulted in this armed clash between states, even if the incident was an accidental occurrence. The framework of ARF did not speak to this, however, and it is no exaggeration to say that the forum has become almost entirely dysfunctional.

　

What, then, should Japan do? In broad terms, the following can be recommended. First is establishing Japan's self-image as a "middle power." The centrality of the Japan-US alliance, without which stability in East Asia is not possible, should be grounded on this self-image.

Second is for Japan to endeavor as far as possible to integrate China into the East Asian system. With regard to the security of East Asia, this will require Japan to become actively involved in the South China Sea "code of conduct" issue, while in the economic sphere it will require Japan to help construct a high-quality free trade zone in East Asia and to ask similar efforts of China.

Third is pursuing multilateral cooperation by promoting dialogue between Japan and South Korea and between Japan and ASEAN. Promoting economic ties with ASEAN and South Korea on the principles of comprehensiveness and speed will be of great significance toward that goal. Also important in this connection are pursuing cooperation in the fields of science and technology and establishing the political environment needed to open Japan's agricultural markets.

Fourth is that Japan must become more actively engaged as a "middle power" in the security of East Asia, the foundation of which should continue to be the Japan-US alliance. Needed measures for strengthening the functions of ARF to that end include systemizing the participation of defense ministers in cabinet ministers' meetings and revising the "unanimous vote" formula so that systematic preventive diplomacy can be conducted.