GISPRI Symposium
"Rise of Economic Regionalism and
the Asian Economy"
On 12 July, an international
symposium entitled "Rise of Economic Regionalism and the Asian
Economy" was held by Global Industrial and Social Progress Research
Institute (GISPRI) under the sponsorship of the Ministry of International
Trade and Industry, the KEIDANREN, and Nihon Keizai Shimbun, Inc. This
symposium was developed from the studies that the Study Group on Economic
Regionalism and Global Economic System, one of the GISPRI organizations,
have been developing since last November. The purpose of the symposium
is to announce results of studies of the future of rapidly developing
Asian economies.
A total of 13 lecturers
from both the academic and business worlds gave speeches and participated
in panel discussions. Among these, six from Japan were: Mr. Ken Iijima
(Deputy President and Executive Director of Sakura Institute of Research),
Dr. Shumpei Kumon (Director of Center for Global Communications, International
University of Japan), Mr. Akira Kojima (Deputy Chief Editorial Writer
at Nihon Keizai Shimbun, Inc.), Mr. Sumio Takeichi (Senior Assistant
to Senior Managing Director of Mitsubishi Corporation), Mr. Noboru Hatakeyama
(Advisor to the Long-term Credit Bank of Japan), and Dr. Ippei Yamazawa
(Professor at Hitotsubashi University). Seven from overseas were: Dr.
Jagdish Bhagwati (Professor at Columbia University, USA), Dr. Gary Hufbauer
(Senior Fellow at Institute for International Economics, USA), Mr. Datuk
H. M. Khatib (Ambassador of Malaysia), Dr. Helmut Laumer (Member of
the Board of Directors, IFO Institute, Germany), Dr. Hadi Soesastro
(Executive Director of Centre for Strategic and International Studies,
Indonesia), Mr. Sun Shang Qing (President, Development Research Center
of The State Council, PRC), and Dr. In-Joung Whang (President of Korea
Development Institute, The Republic of Korea).
About 80 people attended,
mostly from member companies of GISPRI, embassies, and the media. Mr.
Shinji Fukukawa (Advisor to GISPRI), who served as host, addressed the
audience. The program is detailed on the next page. The talks were exceptionally
elaborate for a one-day symposium. Three sessions were held, each presided
over by an able coordinator. Inspiring presentations by famed speakers
were followed by lively comments, discussions, and questions and answers
with participants from the floor. The symposium was very successful.
[Keynote speech]
"New order for post-cold war world"
Dr. Shumpei Kumon
(Director, Center for Global Communications, International University
of Japan).
The end of the cold
war has brought about the feasibility of economic growth without inflation
through bilateral relationships between developed and developing countries
in the Asia-Pacific region. In developing countries, continuous economic
growth is made probable by the information revolution. The future world
will rest on three columns; the third column, added to the two comprising
political and economic orders, should be called the cultural or information
order. The most essential in the Asia-Pacific region is loose unification
based on common cultural (information) values.
The form of development
and new world order in the Asia- Pacific region after the cold war will
be as described above. Two questions arise about the role of Japan in
the new world order:
-
Will a closed
market and backwardness in the information revolution exclude Japan
from the favorable cycle of new economic development in the Asia-Pacific
region?
-
Will Japan be
disqualified for its role as lubricant between Asian culture and
Western (notably American) culture because of the information-oriented
21st century system of industrialization, which differs distinctively
from the 20th century system of industrialization where the model
for Japan was formed?
SYMPOSIUM(at Keidanren Kaikan Room 1001)
9:00 a.m. Registration
9:15 Address
Dr. Shinji Fukukawa
(Advisor to GISPRI)
9:25 Keynote speech
Dr.Shumpei Kumon
(Director, Center for Global
Communications, International University of Japan)
9:45 1st Session:
"Strategy of each country for the regional
economy in
the Asia-Pacific region"
Coordinator
Dr. Ken Iijima (Deputy President and Executive
Director, Sakura Institute of Research, Japan)
Speakers
Dr. Gary Hufbauer (Senior Fellow, IIE, USA.)
Dr. Hadi Soesastro (Executive Director,
CSIS, Indonesia)
Panelists
Dr. Datuk H. M. Khatib (Ambassador of Malaysia)
Dr.Helmut Laumer (Member of the Board of Directors,
IFO Institute, Germany)
Dr. Ippei Yamazawa (Professor, Hitotsubashi
University,
Japan)
0:10 p.m. Lunch
0:50 Luncheon speech
Dr.Noboru Hatakeyama (Advisor to the Long-term Credit
Bank of Japan)
1:30 2nd Session:
"Chinese Economy and NIES Countries; Entry of China
into picture, attractive market or competitor"
Coordinator
Dr.Sumio Takeichi (Senior Assistant
to Senior Managing
Director, Mitsubishi Corporation)
Speakers
Dr. Sun Shang Qing (Minister, DRC, PRC)
Dr. In-Joung Whang (President, KDI,
The Republic of
Korea)
Panelists
Dr.
Hadi Soeastro
Dr.Ippei Yamazawa
3:55 Coffee break
4:10 3rd Session:
"Regional economic arrangements in the Asia-Pacific
region as seen from the global perspective"
Coordinator
Dr.Akira Kojima (Deputy Chief Editorial Writer, Nihon Keizai
Shimbun, Inc.)
Speakers
Dr. Jagdish Bhagwati (Professor, Columbia University)
Dr.Helmut Laumer
Panelists
Dr. Gary Hufbarer
Dr.Sun Shang Qing
Dr. In-Joung Whang
6:35 Close
[Luncheon speech]
"VIEW OF JAPANESE GOVERNMENT ON THE ASIA-PACIFIC REGIONAL INTEGRATION"
Mr. Noboru Hatakeyam
(Advisor to the Long-term Credit Bank of Japan)
A line must be drawn
between arranged regional integration based on NAFTA, EC, or the like,
and de facto regional integration such as that in Asia. Japan disagrees
with regionalism based on formal arrangement such as Free Trade Agreement
(FTA), because private enterprises, which are the foundation of economic
vigor, aim at the entire global market, but not regional markets formed
for the purpose of reducing tariffs.
The speaker checked
up on the current situations of regional integration with GATT article
24, and mentioned about the possible future of the Asia-Pacific region
after the founding of APEC: establishment of AFTA, concept of PAFTA,
idea of EAEC, and approaches to Asian countries by NAFTA. He concluded
that Japan, being engaged in multilateral relations, does not like enlargement
of NAFTA to Asia, considering the discriminating nature of FTA.
The summary of
speeches and the succeeding comments and discussions in the sessions
is provided in the following.
1st Session
"Strategy of each country for the regional economy in the Asia-Pacific
region"
Major points:
- US policy towards Asia
- Strategy of individual countries in the Asia-Pacific
region for the regional economy
- Position and role of Japan
- European view towards Asia
[Report by Dr. Hufbauer]
US POLICY TOWARDS THE ASIA-PACIFIC: WHERE'S THE STRATEGY?
The Clinton administration's policy towards Asia
has three objectives:
- continued maintenance of security,
- creation of environment for free trade and
investment, and
-
support for democracy
and human rights.
The administration
should not attempt to achieve everything at once, but pursue these goals
discreetly, through close dialogue with individual countries.
Among these goals,
the first priority must be security, specifically maintaining of the
Asian security umbrella with the cooperation of Japan and China. Pursuing
the second goal, the Administration has been relying on unilateral measures
that imposed set numerical indexes on other countries. The third goal
involves how US trading policy should be linked to the social issues
and democracy of trading partners. The Administration has recently toned
down its economic and political assertions. In order to achieve these
goals, the Administration needs to take positive multilateral approaches
to Asia through GATT panels and APEC (especially by reinforcing APEC).
In his speech draft,
Dr. Hufbauer suggested that the Administration should consider Asian
candidates for NAFTA enlargement, starting with Korea.
[Report by Dr.
Soesastro]
EAST ASIAN ECONOMIC INTEGRATION; PROSPECTS AND ISSUES FOR POLICY
I would like to introduce
the concept of new regionalism. According to analysis of current situations,
the growing economic integration of East Asia is essentially market-driven,
with the help of trade and direct investment that has formed an organic
network in the region. This regional structure should be sustained and
strengthened in a circle that holds ASEAN in its core. (ASEAN should
play the core role also in AFTA and EAEC.) East Asia needs to strengthen
such regional structures in line with the spirit of "open regionalism"
to maintain its economic growth and dynamism.
[Panel discussion]
(1) Dr. Yamazawa (A
member of APEC Sages)
Dr. Yamazawa asks
Dr. Hufbauer to explain in detail the significance of enlargement of
NAFTA in Asia. Thank you. Japan should not attempt to arrange a free
trading region; it should remain an independent trading country in concentric
cooperation structures such as GATT, WTO, and APEC, and encourage APEC
to develop its functionality.
(2) Ambassador Khati
Legislation of APEC
would be an inward action and disadvantageous both to member countries
and outsiders. It is Asian consensus that EAEC, advocated by Malaysian
Prime Minister Mahathir, was an outward and moderate association and
not intended to separate countries on the sides of the Pacific. I would
like to quote a recent address of Prime Minister Mahathir regarding
the prospect that market-driven, open regionalism would promote inclusive
economic integration.
(3) Dr. Laume
Europe has turned
much attention toward Asia, and Western democracy differs from that
of Asia today, because attainment of democracy and human rights is linked
to economic growth.
(4) Mr. Iijima (The
coordinator)
Issues such as democracy
and human rights and the situations of APEC arguments in the US were
thrashed out.
With regional association
taking place in the diversified Asia-Pacific region, deepening mutual
understanding of local culture, history, religion, and the way of thinking
would be necessary as well as economic intercourse.
2nd Session:
"Chinese economy and NIES countries; Entry of China into picture,
attractive market or competitor"
Major points:
-
Current situation
of Chinese socialist market economy
-
Significance of
Chinese economy for NIES countries
-
China as undetermined
factor in Asia-Pacific region economy
[Report by Mr.
Sun]
CURRENT SITUATION OF CHINA'S MARKET ECONOMY AND CHINA'S ECONOMIC STRATEGY
IN ASIA-PACIFIC REGION
Under a socialist
economic system, China's economy is in a new growth period because of
its rich labor force and high rate of saving. The growth rate over the
last two years was 13%. The government is anticipating economic overheating
and is trying to reduce the growth rate. Making itself an attractive
market to other countries by the introduction of a socialist market
economy, China's external economic policy aims to establish an open
economic cooperation system for mutual benefit on the one hand, and
to adjust its export strategy to compete with neighboring countries
on the other hand. China will actively promote the establishment of
a new economic order in the Asia-Pacific region.
[Report by Dr.
Whang]
THE ROLE OF CHINA IN THE ASIA-PACIFIC REGION; A "COMPETITOR"
OR AN ATTRACTIVE MARKET
Korea, one of the
NIES countries, sees neighboring China as a tough but fair rival because
it has a plentiful labor force and is consistent with the comparative
advantage principle. Concentration of investment in China is contributing
to the pushing of liberalization policies in neighboring countries so
that they can once again attract foreign capital. As a whole, China
is not a threatening rival but a cooperative partner in the Asia-Pacific
region economy.
[Panel discussion]
(1) Dr. Yamazawa
The successful integration
of China, a potential economic power, into the Asia-Pacific region depends
on its integration into the GATT panel and WTO. In addition, APEC needs
to nurture local economic regions such as South China district for the
sake of development of the entire Asia-Pacific region economy.
(2) Dr. Soesastro
The majority view
in ASEAN countries toward China sees it as a competitor and a contributor
to dynamic growth of the Asian economy. Sooner or later China will have
to promote domestic economic revolution to adapt itself to international
customs, and China will benefit from competition with other countries.
The greater China region consisting of China, Hong Kong, and Taiwan,
is aiming at economic growth in a way that differs from Japan (like
wild geese flying at differing altitudes) and is not likely to be a
threat to other Asian countries.
(3) Mr. Takeichi
The population in
China today is 1,200 million, which is equal to the entire world's population
about 150 years ago. Therefore, China deserves to be treated as a whole
world of its own. China will probably progress faster than Japan or
the US. However, there is an economic gap between the coast and the
inland of China.
(4) Mr. Sun
The Chinese government
has taken measures to revamp the taxation system and to entice foreign
investment into the middle western area. China would like to be evaluated
by the average of the entire nation.
(5) Others.
A floor participant
questioned about whether special conditions would be applied to China's
joining of WTO. Acknowledging that it was a very delicate issue, most
of the panelists agreed that if China started pouring out exports, other
countries would take some safeguard measures.
3rd Session
"Regional economic arrangement in the Asia-Pacific region as seen
from a global perspective"
Major points:
-
Relation of rise
of regionalism to GATT and WTO
-
Comparison of
Asia-Pacific regional economics with EU and NAFTA
-
Position of Asia
in global framework
[Report by Dr.
Bhagwati]
PITFALL IN WORLD TRADE INTEGRATION SYSTEMS
The US is promoting
a political strategy of hindering Asian regionalism by manipulating
APEC. The US may attempt an arrangement in a form like FTA, to which
Asian countries must be alert. Asian countries should consider counteractions
to such movements by the US in WTO, because when FTA is imposed on a
country, values of a specific culture along with biased views are also
imposed. Thus, support for multilateralism is important.
[Report by Dr.
Laumer]
RELATION BETWEEN GATT-WTO AND ECONOMIC REGIONALISM
Regionalism may be
part of the foundation of a global system. European unity is trying
to eliminate trading barriers, for the benefit of not only the EU members,
but also for non-member countries. Presupposing that establishment of
WTO will make it difficult to form a regional group for the protection
of group members from non-member countries, EU is going to promote step-by-step
integration to the complete European integration system by 2000.
[Panel discussion]
(1) Dr. Whang
EU and the US may
think multilateralism has failed since it incurred dumping imports from
Asian countries. If the Asia-Pacific region will open its market for
Western exports, it will significantly relieve global tension. Whether
Korea or any other specific country will sign onto NAFTA will not be
important in a truly enlarged NAFTA. Rather, an urgent issue is the
impact of an enlarged NAFTA upon Asia, where the role of Japan, a possible
integration nucleus in Asia, is yet to be determined. Another similar
question is the will of EU in extending its membership.
(2) Dr. Hufbauer
As for NAFTA openness,
a non-member country may enter NAFTA only on its own will. Future US
policy in APEC can be tried in part from the way it deals with social
issues and where interested groups in labor or environment issues are
involved.
(3) Dr. Laumer
A single, global market
is the best for world trading, and EU is only the second best. EU is
hesitating to grant its membership to Turkey for fear of serious labor
problems.
(4) Mr. Sun
China will actively
participate in regional cooperation and will try to lift protectionism
in the region.
(5) Mr. Kojima
Today globalism has
more energy than regionalism. Regionalism based on ideologies are seeking
a new form after the end of the cold war. The current regionalism has
contributed to improving the bottom line of global economies. Global
flows of information and capital are occurring simultaneously on large
scales. Because economic dynamism in Asia was transplanted from other
parts of the world, exclusion of non-Asian countries would be self-denying.
Continuous economic growth in future depends on whether any countries
or regions open their markets to exports. Real world economies are moving
towards more sophisticated, closer mutual reliance. In other words,
economic geography has come to an end.
Note:
Contents of this document were extracted at GISPRI from stenographic
records of the meeting. Time restrictions prevented us from requesting
the participants to check the text. The responsibility for the wording
lies with GISPRI. Information in this brochure may be corrected should
errors be found. Proceedings of this symposium will soon be issued.
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