Chapter IV: Korea and the Nascent Regionalism in East Asia
4.4. East Asian Community in Crisis: The Korean EAVG II Initiative
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4.4. East Asian Community in Crisis: The Korean EAVG II Initiative
While the EAS turned out to be something different from the vision put forward by the EAVG, becoming a broader framework; in the past 15 years the APT mechanism continued to deepen regional cooperation among its 13 members, maintaining its original goal of serving as the main vehicle for community-building in East Asia. The EAS formation and its development, particularly regarding the issue of membership, however, meant that the roadmap for an East Asian-exclusive regional community was derailed. In this context the EAVG II came into being in 2011, in order to rethink and reconsider the future of the community-building process in East Asia.
Geung Chang Bae,48 from the Korea National Diplomatic Academy (KNDA), explains that "Korea decided to follow up and review the goal set 10 years ago by the EAVG. So we proposed the launching of the EAVG II, in order to push for a more politically meaningful kind of East Asian Community among the APT countries."
(Geung Chang Bae, interview) The timing was also important, as the actual report of the EAVG II points out:
"Taking into account that 2011 marked the 10th anniversary of the EAVG final report and that 2012 marked the 15th anniversary of the APT cooperation, the Republic of Korea proposed to set up the EAVG II at the Ha Noi APT Summit to review and assess all the cooperation activities implemented/being implemented within the framework of APT (...) The APT Leaders welcomed the proposal of the ROK and agreed to 'task relevant officials to implement this initiative.'" (EAVG II Final Report)49
The EAVG II is indeed an important and required kind of evaluation of the process so far, in which Korea once more showed leadership and genuine interest in trying to advance the process of regional institutionalization. Thus, the EAVG II task was to take stock of all the APT cooperation activities and evaluate how those activities have contributed to developing the APT cooperation and community-building in East Asia.
Based upon such stock-taking, the EAVG II studied the future direction of the APT cooperation mechanism, and also prepared a new vision for regional cooperation and
48 Interview with Bae, Geung Chang. Research fellow and government adviser at the Korea National Diplomatic Academy (IFANS-MOFAT). Expert in East Asian Regionalism, East Asian Community and Southeast Asia. Also involved in Track II processes. During the interview he also provided material based on some of his own work and research. (Dec. 3rd, 2012)
49 Official Report of the EAVG II was submitted on November 19th, 2012; at the APT Commemorative Summit in Phnom Penh, Cambodia. An official copy of the report was provided for this study by Lee, Sang-Ryol, Korean official at the MOFAT. Director General of the ASEAN Division, who personally worked for and attended such APT meetings. The Interview took place on Dec. 5th, 2012.
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community building. (EAVG II Final Report) The grouping held four meetings in total, the first one in Korea, as it was the country catalyst of this initiative, in addition to meetings in Vietnam, Japan and Indonesia. Seoul was a great facilitator too, and not only assumed all the costs of the first meetings - including traveling and accommodation for all the participants of the 13 APT countries - but it also served as manager by acting as one of the co-chairs throughout the whole process, together with one country of ASEAN each year (Indonesia in 2011 and Cambodia in 2012), according to details provided in EAVG II official report. This are clear signs of middlepowermanship shown by South Korea in order to revive the APT process, setting up new goals and a vision that was somehow derailed in the creation of the EAS.
An important assessment of the past decade was realized by the EAVG II.
Among other issues, its reports highlights that the core focus of cooperation in the political and security areas remains primarily on confidence-building. Also some progress has been done in the field of socio-cultural cooperation, especially in areas such as health, education and environment. It is, however in the area of economic and financial fields where there has been most cooperation within APT, as the report signals, and where the most tangible results have been achieved. Indeed, the EAVG II recounts within them major accomplishments of APT process the Chiang Mai Initiative, which has evolved into a multilateral swap system; while the creation of the APT Macroeconomic Research Office (AMRO) was established in May 2011 in Singapore.
Furthermore, the report adds that the Asian Bond Market Initiative (ABMI) New Roadmap has been adopted, and the Credit Guarantee and Investment Facility (CGIF) was also established in 2011, in order to provide credit guarantee and investment trust in Asia, to boost long-term investment in the region. The EAVG II highlights that these are all achievements that followed the logic of mid-to-long term recommendations made by the EASG, which was an outcome of Korean activism over a decade ago.
(EAVG II Final Report)
Nevertheless, Geung Chang Bae - who has followed the process closely and advice the Korean government in issues related to ASEAN and East Asian regionalism - points out the shortcomings of this new framework and the Korean dissatisfaction with the community-building process.
"In the original EAVG initiative, the emphasis was put on economic and regional cooperation. Since this is being achieved already under several different, and larger frameworks; Korea was hoping that within this EAVG II the emphasis should be put on community-building. Korea proposed and pushed
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for this idea, and that would entail the notion of an East Asia Charter; and the coordination and future integration between the ASEAN Secretariat with the new Trilateral Cooperation Secretariat in Seoul for the 'plus 3' countries in Northeast Asia. This was indeed a very revolutionary idea that Korea tried to inject in this evaluation process made by the EAVG II. Unfortunately ASEAN countries did not feel enthusiastic about this, mainly because they are instead fully convinced now that the future for East Asia regional processes should be based on ASEAN+6 and not really under the more exclusive APT framework.
Of course other countries in the region have no choice but to follow the ASEAN centrality, so the final outcome of the EAVG II is in my opinion very confusing." (Geung Chang Bae, interview)
Indeed, the EAVG II recommends the realization of the East Asia Economic Community by 2020 as the main pillar of the new vision, which is in line with what Korea tried to put forward. This, the reports points out, should be based on the ongoing efforts of ASEAN to realize the ASEAN Economic Community by 2015, the successful launching of the Chiang Mai Initiative Multilateralization (CMIM) and the AMRO, in addition to the prospects of trade liberalization with the start of the negotiation for the Regional Comprehensive Economic Partnership (RCEP), which is the new attempt to form a regional FTA proposed and backed by ASEAN and based on the ASEAN+6 formula, not just the APT members. Once more, this is frustrating many that hoped to advance the community building process in East Asia based only on the 13 APT members, that is the 10 Southeast Asian nations and the three big economies of Northeast Asia, China, Korea and Japan. However, ASEAN continues to maintain its central role in both the APT and EAS, and that is once more clearly addressed by the EAVG II final report, which emphasizes that regional cooperation should build upon ASEAN "as the key driving force of the East Asian community building process."
(EAVG II Final Report)
ASEAN's push for its own initiative of regional free trade area - the RCEP - was a blow particularly for Korea and China, who were hoping to maximize gains in the creation of a EAFTA based only on the APT members. Korea in particular was one of the countries which made great diplomatic efforts and allocated the most resources in time and financing research studies for the prospects of such trade liberalization process based on APT, as noted in previous sections. The Korean source consulted explain how Korea now seems to be the only country left that it is still hoping and pushing for an institutional framework for economic integration and an FTA based on the APT process, such as the EAFTA, since ASEAN is now behind the RCEP based on the 'plus 6' formula. "That's the reality at this moment. China has eventually accepted the RCEP
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instead of the EAFTA because China's primary concern is to counterbalance the US-led Trans Pacific Partnership (TPP). So even though China previously preferred a mode of regional integration on the APT basis, now it has slowly withdrawn its support for the EAFTA and accepted the broader RCEP based on ASEAN+6. On the other hand, Japan had never too much interest in the APT and the integration based on it to form a EAFTA, as it has always wanted to dilute China's intentions and influence in the region.
(Geung Chang Bae, interview) This would explain Japan's announcement in March 2013 to finally join the TPP negotiations, instead of showing support for the RCEP initiative, which still remains a more ASEAN centered framework. All this, argues Bae, definitely undermines the APT and community-building process at the end.
Moreover, in accordance to the kind of regionalism that prevails in this part of the world, and considering the sensitivity of Asian countries to the possible loss of sovereignty and territorial integrity, the EAVG II addresses clearly that the term "East Asia Economic Community" is understood as an intergovernmental entity and it does not mean or imply that members of this community would be required to transfer any competence to any entity that may be created by the community. This is expected to be carried out following the principles of mutual respect for independence, sovereignty, equality, territorial integrity and national identity. (EAVG II Final Report) Certainly, East Asian governments do not want to see the kind of supranational institutionalism that exists in Europe today, at least not before 2020 where the economic community is expected to be in place. Sang-Ryol Lee from the Korean MOFAT - who is the head of the division for ASEAN related mechanism like APT and EAS, and who provided the EAVG II final report for this study - explain that the economic community is only the first step, and then other aspects would follow, like free flow of labor, capital, goods and including other socio-political and security areas. "In order to do that we need to have free trade agreements to serve as the different building stones, like the Trilateral CKJ FTA or the RCEP FTA." (Sang-Ryol Lee, interview) This Korean source points out that, even though it is not official, there has been discussions for building up of a security community by year 2030, and a socio-cultural community by year 2035. This is somehow signaled in the EAVG II report, which points out that the new vision for 2020 is not limited to the creation of a East Asia Economic Community only. "We need to enhance efforts of cooperation in the political-security, as well as the social-cultural areas." (EAVG II Final Report) Indeed, among the policy-makers and people driving these processes there is the realization that this community-building process is
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Consequently, the EAVG II finally proposes to the APT members several recommendations and an agenda for cooperation based upon 3 pillars: political-security, economic and socio-cultural. Additionally, in its last section the report emphasizes the importance of institutional arrangements for the pursue of an East Asian Community in an effective manner, recommending that existing mechanism should be reviewed and streamlined. The East Asia Forum - as a connectivity hub involving business, governments, NGOs and scholars - is highlighted in this section. This initiative was an outcome of the previous EAVG and EASG; and strongly backed by Seoul. Also in this point particularly, it is relevant that the EAVG II report suggests closer cooperation and coordination between the ASEAN Secretariat and the new Trilateral Cooperation Secretariat (TCS)50 established in Seoul for the "plus three" Northeast Asian countries.
(EAVG II Final Report) This point is significant as it comes to fill in the institutional gap existing between North and Southeast Asia, which marks the point of departure of this research project. This is highlighted in the report as a stepping stone to further the process of regional institutionalization in East Asia on the long-term. This serves well to illustrate the argument this study is trying to put forward, and the role of Korea as a middle power at the center of all these processes, displaying activism as catalyst, facilitator and as manager of different mechanism for the advancement of regionalism in East Asia. To be sure, there shall be more EAVG in the future, to follow up the process of regionalism in East Asia, as Sang-Ryol Lee implies, which helps to stress the significance of this Korean initiative as the blueprint for East Asian community building.
However, after all these years since the EAVG set up the goal and path for an EAC, many in Korea feel frustrated and disillusioned with the outcomes and the way the process has been derailed. Even the former writer of the EAGV report in 2001, Shin-wha Lee, expressed how after all this time her opinion regarding regional institutionalism and functionalism have changed in face of the little spill-over effect that functional cooperation has produced in East Asia. (Shin-wha Lee, interview) For Geung Chang Bae the prospects for an East Asian Community based on APT are now bleak. "ASEAN has given up to the APT and its focus is on the ASEAN + 6 RCEP process. China has turned to this process, too, in order to counterbalance the US-led
50 The Trilateral Cooperation process among the Northeast Asian countries, and the role Korea has played in it, will be reviewed in detail in the next chapter of this dissertation.
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TTP and Japan has no real interest in East Asian community-building as it prefers an Asia-Pacific approach. Korea is now the only country that is still interested and fully committed with a EAFTA based on APT as the first step for a regional community in East Asia. It seems implied that the final outcome of the EAVG II is an East Asia Economic Community based on ASEAN+6, which is the RCEP basically." (Geung Chang Bae, interview) This is certainly true, however one could argue that it also illustrates that the sense of urgency that created the APT process - e.g. the AFC - is now long forgotten, and that the recent global financial crisis requires the inclusion of more members, particularly Australia, New Zealand and India, as their economies are very much intertwined to the ones of East Asia.
Ultimately, Geung Chang Bae stresses that the goal set up a decade ago is now in crisis. This expert from KNDA and adviser to the Korean government, who has followed this process for a long time, explains that with the outcomes of the APT and EAS of November 2012, where the EAVG II final report was also submitted, the contention between the two schools of thought regarding East Asian community-building - either East Asia-exclusive under APT, advocated initially by China, Thailand, Malaysia and South Korea; or larger under ASEAN+6 or more, proposed by Japan mainly, to counter China's rise - is finally over. "The larger approach has prevailed both in the context of multilateral mechanisms like the EAS and now with the RCEP in terms of economic integration. Unfortunately, I think Korea's role as a middle power in this context is largely limited." (Geung Chang Bae, interview) Indeed, the following section reviews this last point.