East West Center Research Program Seminar

Integration Strategies for Asean: Alone, Together, or with Neighbors? Economics Seminar by
Michael Plummer, Non-Resident Senior Fellow, John A. Burns Hall, Room 3012. Early initiatives geared toward deepening economic integration in ASEAN were relatively superficial until the ASEAN Free-Trade Area (AFTA) in 1992. Since then, ASEAN has really been quite ambitious, particularly since the Asian Crisis. Most significantly, it has committed itself to creating an ASEAN Economic Community, in which there would be a free flow of goods and services, as well as a freer flow of capital and skilled labor, by 2015. However, individual ASEAN Member Countries have been negotiating a plethora of free-trade areas with non-partners, some of which are more comprehensive than existing ASEAN agreements.

Does this approach make economic sense? Should ASEAN merely focus on deepening economic integration across its own member states, or should it embrace initiatives with non-partners? What would be the optimal group upon which ASEAN should focus its economic integration programs? This paper attempts to address these and related issues from three perspectives: trade, finance, and monetary/macroeconomic integration. It concludes that, in fact, ASEAN is probably on the right path for all three: an economic model used to compare various scenarios ranks the existing ASEAN approach to trade integration as the best for most major ASEAN Member Countries (and close to being the best for the others), whereas it makes more sense for ASEAN to focus on cooperation in the areas of finance and monetary cooperation at the ASEAN+3 level, which it is currently doing. The paper stresses, however, that the accords that ASEAN is currently embracing will need to be outward-oriented and based on "best practices" if they are to be successful.

Michael G. Plummer is Senior Fellow (non-resident) at the East-West Center and Professor of International Economics at The Johns Hopkins University SAIS, Bologna, Italy. He is also the Editor-in-Chief of the Journal of Asian Economics. Previously, he was a research fellow at the East-West Center (1988-1993) and Associate Professor of Economics and the Director of MA Programs at Brandeis University. He has been a visiting professor/researcher at a number of universities and institutions such as Kobe University, University of Auckland (New Zealand), OECD (Paris), Harvard University (USA), the Diplomatic Academy of Vienna, the University of Nantes, and "Sciences Po." Professor Plummer has also been a Fulbright Chair in Economics (Viterbo) and Pew Fellow in International Affairs (Harvard University). His main academic interests relate to international trade, international finance, and economic integration especially in the Asian context. He is an Associate Editor of the Asian Economic Journal, and is on executive boards of World Development and the ASEAN Economic Bulletin. His Ph.D. is from Michigan State University.

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