Author(s): Richard Pomfret
Publisher: World Scientific Publishing
Reviewed by Dilip K. Das, Professor, SolBridge International School of Business, Woosong University, Director, Institute of Asian Business. Daejeon, Republic of Korea.
The essential focus of this book is economic regionalism in Asia. It is a fertile ground and a vast literature exists on this subject. In a short book the author has tried to cover a rather comprehensive subject matter. Therefore chapters lack both, breadth of information and depth of analysis. As the author has produced seventeen articles on or around this theme over the last two decades, his familiarity with them is noteworthy. It seems that the intention of the author in writing this book was to come up with a quick book on this topical theme.
The European integration endeavors of the post-World War II period show that economic factors were among the dominant driver of regionalism. The same driving force was behind the formation of the North American Free Trade Area (NAFTA) and Mercosur in the Americas. It is well-known that in Asia, institution-led regionalism was slow to emerge. However, institutions like Association of Southeast Asian Nations (ASEAN) that were launched with a non-economic focus, gradually changed and came to have the same economic motive as their prime driver. The Asian regionalism of the twenty-first century is markedly different from that of the latter half of the last century. The essential coverage of the book is contemporary regionalism in Asia, although it does not ignore the pre-2000 regionalism endeavors. This book is largely based on author’s research on evolving East Asian regionalism, since the time he participated in a conference on ASEAN at the Crossroads in Kuala Lumpur in 1987. In the preface of this book the author has noted that he had been involved in this issue since that point in time.
The book is divided into seven short chapters. Therefore thorough treatment of any of the issues has not been feasible, although it is available in plenty of places in the regionalism literature. The contents of the book flow logically. With good reason the author separates pre-2000 regionalism in Asia from the post-2000 regionalism. Open regionalism was a characteristic feature of Asia, which has been given due importance in the coverage of this book. The much talked about distinction between market-led regionalization and institution-led or policy-driven regionalism has been segregated and discussed at length. The Asian crisis of 1997-98 has had a decisive impact over the evolution of regionalization and regionalism in Asia and has been examined in enough details. ASEAN and its various extensions like the ASEAN-Plus-Three (APT) and ASEAN-Plus-Six (APS) were the next focus of the book. Lastly the author analyzes the depth of Asian regionalism. Thus viewed, a large topic has been skillfully covered in a brief space of 183 pages, but as mentioned earlier the treatment of this important is rather shallow.
A book of this kind cannot be expected to have one reasoned conclusion. Each chapter is thematically exclusive and has its own conclusion(s). In the last chapter where the author was considering providing a clear verdict regarding the depth of regionalism in contemporary, the author started well and then digressed without providing a convincing and well-researched answer to the question he started with. The methodology of the book is descriptive analysis. The author has shunned a rigorous formal treatment, which was not indispensable for such a theme. The book does not mention who the target audience is but going by the treatment of the subject matter, it appears to be a work appropriate for undergraduate students. As regards the principal weakness of the book, as noted in the beginning, a lack of in-depth treatment of the subject matter seems to be just that.
Unlike the past, regionalism in contemporary Asia is thriving. A lot of Asian economies have entered into bilateral and regional trade agreements in the post-Asian crisis period. In particular, its post-2000 pace has been nothing short of dramatic. The on-going regionalism in Asia made it a leader in contemporary global regionalism. This rapid rush into regionalism was both market-led and policy-led. The chapter-wise coverage of the book is as follows: Chapters 2 through 4 deal with the theme of regionalism half century before 2000, in particular the decade following 1989. The focus of Chapter 5 was the transitional period of 1997-2000. The last four chapters examine the decade after 2000.
Although the sources of Asian economic miracle have not been analyzed in the book, it is obvious that the development path of Asia was outward-oriented. It is well-known that their success began with the export of labor-intensive export products. By 2007, the nine high-performing Asian economies produced over a third of total manufactured exports of the world. As dynamic trading economies they traded globally and intra-regional trade, or for that matter preferential trading agreements, did not have much utility for them. Therefore, when these economies liberalized their trade policies, they did so in a non-discriminatory manner. Also, when regionalism was actively debated in the late 1980s in the context of slow advancement in multilateral trade negotiations and of developments in Europe and North America, a discriminatory or exclusive grouping was rejected in favor of open regionalism of Asia Pacific Economic Cooperation (APEC) grouping. At the same time Asian economy, particularly East Asian economy, was becoming increasingly regionalized in the 1990s. Emergence of vertically integrated value chains has contributed to this regional integration of Asia. In addition, sub-regional economic zones were also emerging.
Since 2000 Asia has seen an explosion of bilateral and plurilateral trade agreements. They included not only tariff barrier reduction or elimination but also non-tariff barriers and regulatory impediments to trade (chapter 6). This rapid proliferation of free trade agreements (FTAs) of different kinds have created a “noodle bowl” effect and become an issue of concern for the regional policy makers. First, how to consolidate these FTAs and second how to simplify the “noodle bowl” are open and unanswered questions. Also, which Asian countries are to be included in a consolidated pan-Asia regional trading arrangement which to be excluded is another serious unsettled d issue.
Expansion and deepening of the vertically integrated production chains is another reality with which the contemporary FTAs need to cope. They have become the principal driving force behind regional integration in Asia. As the rapid growth of intra-regional trade centered on these value chains, in a region of a low MFN tariffs, the operations of production networks can be made more efficient by bilateral and plurilateral agreements to remove trade barriers and reduce trade costs. One prescient forecast about the future of regionalism in Asia made in the book is that it will continue to deepen because trade facilitation addressed issues beyond trade. Issues of harmonization and mutual recognition of regulation will benefit the operations of value chains in the region. If readers a looking for a light-weight treatment of Asian regionalism, this book will be an appropriate read.