The Emerging Regional Economic Integration Architecture in East Asia

Abstract

This paper examines regional market integration through production networks and free trade agreements in East Asia and their attendant challenges and issues. It examines progress in the ASEAN Economic Community and in various ASEAN+1 free trade and economic integration agreements. It argues that there is a strong case for a region-wide agreement to maximize economic synergy and resolve emerging problems, including market fragmentation and the “noodle bowl” effect. It explores three possible paths to region-wide integration, namely, the East Asia Free Trade Area (encompassing ASEAN+3 [the People's Republic of China, Japan, and Korea]), the Comprehensive Economic Partnership for East Asia (encompassing ASEAN+3 countries and Australia—New Zealand and India) and the Trans-Pacific Partnership, currently involving nine negotiating countries in the Asia-Pacific Economic Cooperation. The paper explores the economic and political benefits and challenges of forming these three regionwide agreements.