International Dialogue

Summary of Dialogues

"Japan and ASEAN: Cooperation for Peace and Prosperity in the Asia-Pacific Region"


The Global Forum of Japan (GFJ) aims to contribute to peace and prosperity in the world by helping to build international consensus to be commonly shared by a transnational network of epistemic communities that include opinion leaders. For this purpose, GFJ has been actively engaged for the past 21 years in organizing 3 to 5 policy oriented bilateral and multilateral exchanges every year between Japan and the rest of the world.

It is against this background that GFJ held the 2nd Japan-ASEAN Dialogue “Japan and ASEAN: Cooperation for Peace and Prosperity in the Asia-Pacific Region” in Tokyo on 16-17 January 2003. This report intends to summarize the achievements of these discussions between Japanese and their ASEAN counterparts. Though the printed version of the report will be made available to only the restricted number of people such as members and friends of GFJ and their counterparts from ASEAN, the full text of the report will be shown at the website of GFJ ( as well.

The 2nd Japan-ASEAN Dialogue “Japan and ASEAN: Cooperation for Peace and Prosperity in the Asia-Pacific Region” was held under the joint auspices of GFJ and ASEAN ISIS, as a kick-off event of the “ASEAN-Japan Exchange Year 2003” and was attended by 102 Japanese, 25 ASEAN participants including 11 panelists representing ASEAN. Participants exchanged opinions on matters of significance related to the future of Japan-ASEAN relations. We would like to take this opportunity to express our gratitude to the Japan-ASEAN Exchange Projects, which generously supported this 2nd Japan-ASEAN Dialogue.

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1. Program / Agenda

ASEAN-Japan Exchange Year 2003


"Japan and ASEAN:
Cooperation for Peace and Prosperity in the Asia-Pacific Region"

January 16, 2003/Tokyo ANA Hotel
January 17, 2003/International House of Japan
Tokyo, Japan

Supported by Japan-ASEAN Exchange Projects

Co-sponsored by The Global Forum of Japan (GFJ), ASEAN ISIS

Thursday, January 16, 2003 / ANA Hotel Tokyo
18:00-18:30 Welcome Reception
18:30-20:30 Welcome Dinner hosted by Chairman OKAWARA Yoshio, The Global Forum of Japan

Friday, January 17, 2003 / International House of Japan
Session I
09:45-11:45"The Initiatives for the ASEAN-Japan CEP"
Co-Mediator (15min.) ITO Kenichi, Governor and Executive Director, The Global Forum of Japan, Japan
Noel MORADA, Executive Director, Institute of Strategic and Development tudies (ISDS), Republic of the Philippines
Paper Presenter (20 min.) KIMURA Fukunari, Professor, Keio University, Japan
Lead Discussant A (5 min.) KAO Kim Hourn, Executive Director, Cambodian Institute for Cooperation and Peace (CICP), Kingdom of Cambodia
Lead Discussant B (5 min.) HAYASHI Yoshimasa, Member of the House of Councillors, Japan
Lead Discussant C (5 min.) NOORDIN Sopiee, Chairman and CEO, Institute of Strategic and International Studies (ISIS), Malaysia
Lead Discussant D (5 min.) Sengchanh SOUKHASEUM, Director-General, Institute of Foreign Affairs (IFA), Ministry of Foreign Affairs, Lao People's Democratic Republic
Free Discussion (60 min.) All Participants

11:10-12:40Luncheon Speech "East Asia FTA as a Balancer to EU and FTAA"

Session II
12:50-14:40"ASEAN-China FTA negotiations and ASEAN-Japan CEP"
Co-Mediators (15min.) OKAWARA Yoshio, Chairman, The Global Forum of Japan, Japan
NOORDIN Sopiee, Chairman and CEO, Institute of Strategic and International Studies (ISIS), Malaysia
Special Speech (20min.) YANO Tetsuro, The Senior Vice Minister of Foreign Affairs, Japan
Paper Presenter (20 min.) Hank LIM, Director for Research, Singapore Institute of International Affairs (SIIA), Republic of Singapore
Lead Discussant A (5 min.) Edy PRASETYONO, Head of the Department of International Relations, Center for Strategic and International Studies (CSIS), Republic of Indonesia
Lead Discussant B (5 min.) HAYASHIDA Hiroaki, Research Fellow, Yomiuri Research Institute, Yomiuri Shimbun, Japan
Lead Discussant C (5 min.) JAYASIRI Jayasena, Member of the ASEAN-China Trade Negotiating Committee
Lead Discussant D (5 min.) Ba Thwin, Advisor, Ministry of Foreign Affairs, Union of Myanmar
Free Discussion (50 min.) All Participants

14:40-14:55Coffee Break

Session III
14:55-16:10"Globalization and Asian Values"
Co-Mediator (15min.) JIMBO Ken, Research Fellow, The Japan Institute of International Affairs, Japan
TAN Ee Khoon, Assistant Director, External Economic Relations, Bureau of Economic Cooperation, ASEAN Secretariat
Paper Presenter (20 min.) Kusuma SNITWONGSE, Chairperson of Advisory Board, Institute of Security and International Studies (ISIS), Chulalongkorn University, Kingdom of Thailand
Free Discussion (60 min.) All Participants


Session IV
16:20-17:10"The Summing-up of the Whole Dialogue"
Co-Mediator ITO Kenichi, Governor and Executive Director, The Global Forum of Japan, Japan
Hank LIM, Director for Research, Singapore Institute of International Affairs (SIIA), Singapore
Free Discussion (30 min.) All Participants

Farewell Dinner (Invitation Only)
18:00-20:00 Farewell Dinner hosted by Governor and Executive Director ITO Kenichi, The Global Forum of Japan

[Note] English-Japanese simultaneous interpretation provided

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2. Participants List

[ASEAN Panelists]
Ba Thwin Advisor, Ministry of Foreign Affairs, Union of Myanmar
Edy PRASETYONO Head of the Department of International Relations, Center for Strategic and International Studies (CSIS), Republic of Indonesia
Hank LIM Director for Resarch, Singapore Institute of International Affairs (SIIA), Republic of Singapore
JAYASIRI Jayasena Member, The ASEAN-China Trade Negotiating Committee
KAO Kim Hourn Executive Director, Cambodian Institute for Cooperation and Peace (CICP), Kingdom of Cambodia
Kusuma SNITWONGSE Chairperson of Advisory Board, Institute of Security and International Studies (ISIS), Chulalongkorn University, Kingdom of Thailand
Noel MORADA Executive Director, Institute of Strategic and Development Studies (ISDS), The Republic of Philippines
NOORDIN Sopiee Chairman and CEO, Institute of Strategic and International Studies (ISIS), Malaysia
Sengchanh SOUKHASEUM Director-General, Institute of Foreign Affairs (IFA), Ministry of Foreign Affairs, Lao People's Democratic Republic
TAN Ee Khoon Assistant Director, External Economic Relations, Bureau of Economic Cooperation, ASEAN Secretariat
TRINH Quang Thanh Director General, Institute for International Relations, Ministry of Foreign Affairs, Socialist Republic of Vietnam

[Japanese Panelists]
HAYASHI Yoshimasa Member of the House of Councillors
HAYASHIDA Hiroaki Research Fellow,Yomiuri Research Institute, Yomiuri Shimbun
JIMBO Ken Research Fellow, The Japan Institute of International Affairs
YANO Tetsuro The Vice Minister of Foreign Affairs
KIMURA Fukunari Professor, Keio University
OKAWARA Yoshio Chairman, The Global Forum of Japan; President, Institute for International Policy Studies
ITO Kenichi Governor and Executive Director, The Global Forum of Japan

[The Global Forum of Japan]
<Business Leaders>
CHINO Tamaki Assistant Manager, Kikkoman Corporation
FUKUCHI Aki Research Office, The Bank of Tokyo-Mitsubishi, Ltd.
TAKEUCHI Kazumasa Manager, Corporate Planning, Asahi Glass Co.

<Opinion Leaders>
GOMI Norio Professor, Graduate School MBA Course, Rikkyo University
HIRONO Ryokichi Professor, Graduate School, Teikyo University
INA Hisayoshi Columnist/Editorial Writer, The Nikkei Newspapers
INOGUCHI Takashi Professor, University of Tokyo
KONDO Tetsuo President, Institute for New Era Strategy (INES)
MANO Teruhiko Advisor, Tokyo Research International, Ltd.
NISHIKAWA Megumi Senior Editorial Staff Writer, The Mainichi Newspapers
OSANAI Takayuki Foreign Policy Critic
TAJIMA Takashi Secretary-General, Asian Productivity Organization (APO)
YAMAGUCHI Tatsuo Advisor to the President, The Bank of Tokyo-Mitsubishi, Ltd.

[The Japan Forum on International Relations]
Chairman, Ship and Ocean Foundation
HASHIMOTO Masuo Senior Advisor, Japan Railway Technical Service (JARTS)
ITO Kiyoyuki Honorary Corporate Advisor, Yonei & Co., Ltd.
ITO Yukinori Professor, Teikyo University
KOBAYASHI Akio Technical Advisor, Trust Planning Corporation
KOGURE Masayoshi Former Professor, Toyo University
KOYAMA Seiji Examiner, Japan Patent Office
NAKAMURA Mitsuo Senior Research Advisor, Japan Bank for International Cooperation (JBIC)
OHKURA Yunosuke President, Crosscultural Laboratory
OIZUMI Jun Staff Member of Association
ONO Sumio Instructor, Nihon University
SAITO Shoji Former Advisor, Mitsubishi Chemical Corporation
SAJIMA Naoko Professor, Senshu University
SAKUTA Masaaki Professor Emeritus, Nihon University
SATO Jiro Manager, Japan GRD
SAWAI Teruyuki Former Ambassador of Japan to Norway
SHIRAISHI Takeo External Relations Director, Graduate School of International Corporate Strategy, Hitotsubashi University
TAKAHASHI Tsunehiro Senior Manager, External Affairs Department, Global Business Development Division, Hitachi, Ltd.
TAKAO Akira General Manager, Japan Racing Facilities Co., Ltd.
TAKASE Tamotsu Research Fellow, WTO Research Center, Aoyama Gakuin University
UEDA Jihei Advisor, Nippon Koa Insurance
YAMANAKA Akiko Visiting Professor, United Nations University
YOSHIDA Haruki President, The Yoshida Labo for Economics and Industry, Inc.

[The Japan Center for Conflict Prevention]
ISE Momoyo Executive Director, Asian Women's Fund
MATSUBARA Michio Director, External Affairs, Rissho Kosei-kai
NAKAGAWA Seishi Advisor, Hitachizosen Co. Ltd.
WATANABE Taizo Commissioner General, The 2005 World Exposition, Aichi, Japan

Adam G. WAND Lawyer, Anderson Mori Attorneys
AEBA Takanori Lecturer, Waseda University
AKAO Nobutoshi Secretary General, ASEAN-Japan Center
AKASHI Yoji Professor Emeritus, Nanzan University
Alan DENIEGA Vice Consul, Embassy of the Philippines in Jpana
ANDO Toshiki Assistant-Director, Intellectual Exchange Division, Asia Center, The Japan Foundation
ATSUMI Chihiro Deputy Director-General, Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs
CHEW Tai Soo Ambassador, Embassy of the Republic of Sigapore in Japan
Chi Chiew SUM First Securetary, Embassy of the Republic of Singapore in Japan
Claro CRISTOBAL Minister, Embassy of the Republic of Philippines
Domingo L. SIASON, Jr. Ambassador, Embassy of the Republic of Philippines
GOTO Kazumi Professor, Faculty of Law, Hosei University
Greg CHAIKIN Associate Professor, Shimonoseki City University
Hans J.A. van GINKEL Rector, United Nations University
HIKITA Yasuyuki Professor, College of Economics, Rikkyo University
HIRANO Keiko Assitant-Director, Asia-Pacific Division, Trade Policy Bureau, Ministry of Economy, Trade and Industry
HIRATSUKA Daisuke Director, Division of Reserch Project, Research Planning Department, JETRO
HIRAYAMA Kenichi Deputy Director, United Nations Statistical Institute for Asia and the Pacific
HORIUCHI Mitsuko Director/Special Regional Advisor on Gender Issues, Tokyo Branch Office, International Labour Organisation (ILO)
Ibrahim ABDULLAH Minister/Deputy Chief of Mission,Embassy of Malaysia Tokyo
IIDA Masafumi Researcher, The National Institute for Defense Studies
IIJIMA Ken Professor, Faculty of International Development, Takushoku University
IKEO Aiko Professor, Waseda University
ISHIKAWA Masao Adjunct Professor, Meikai University
KABASHIMA Hiromi Teaching Assistant, Faculty of Law, Kyusyu University
KAGOTANI Koji Graduate Student, School of Policy Studies, Kansei Gakuin University
Kasit PIROMYA Ambassador, The Royal Thai Embassy
KAWAKITA Atsushi Professor, Kyoto Institute of Technology
KIMURA Hirotsune Professor, Nagoya University
KOBAYASHI Toshio Representative, Inter-American Development Bank Office of Japan
KOMAKI Toshihisa Senior Staff Writer, The Nikkei Shimbun
Khonepheng THAMMAVONG Second Secretary, Embassy of the Lao People's Democratic Republic
KOTERA Akira Professor, University of Tokyo
KUBOTA Tomoko Division of Reserch Project, Research Planning Department, JETRO
KUDO Takashi Assistant to the Chairman, Asean-Japan Exchange year 2003, Organizing Committee,Ministry of Foreign Affairs
MAKINO Shojiro President and Representative Director, Pacific Consulting K. K.
MATSUMURA Masahiro Professor, Faculty of Law, St. Andrew's University
Michael PULCH Counsellor, Head of Trade and Commerce, European Union, Delegation of the European Commission in Japan
MUKOYAMA Hidehiko Senior Economist, The Japan Research Institute
NAGANO Toshiro Executive Director, Japan Forum for Strategic Studies
NAGASAWA Hiroyuki Assistant Director, Regional Policy Division, Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs
NAKAI Yoshifumi Senior Researcher, Institute of Developing Economics, JETRO
NGUYEN Quang Trung Second Secretary, Embassy of the Socialist Republic of Vietnam in Japan
OBI Michiyo Associate Professor, Kitakyushu University
Ok VETH Minister Counsellor, Embassy of Kingdom of Cambodia in Japan
OKAMOTO Jiro Researcher, Institute of Developing Economies, JETRO
O'UCHI Minoru Professor, Graduate School of International Political Economy, Syumei University
Pisanu SOBHON Second Secretary, The Royal Thai Embassy
SATO Taishi International Finance Dept. Japan Bank for International Corporation (JBIC)
SASAKI Tatsuya Staff Writer, Economic News Div., The JIJI Press Ltd.
SHIMADA Masahiro Director, Trade Division, ASEAN-Japan Center
SHUTO Motoko Associate Professor, University of Tsukuba
SONE Kenko Deputy Director, Regional Policy Division, Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs
Soukthavone KEOLA Ambassador Extraordinary and Plenipotentiary of the Lao people's Democratic Republic to Japan
Steven PANG First Securetary, Embassy of the Republic of Singapore in Japan
SUZUKI Tomohiro Associate Professor, University of Shinshu
TAKAGI Isao Professor, Soka University
TAKASHINO Heitaro Former Professor, Yamamura Community College
TAKEMOTO Hiroaki Regional Policy Division, Asian and Oceanian Affairs Bureau, Ministry of Foreign Affairs
TANGO Keiichi Executive Director, JBIC Institute (JBICI), Japan Bank for International Cooperation
Tanya BENNET Second Secretary, Australian Embassy in Japan
TASHIRO Masami Managing Director, Secretary General
TATSUMI Tomonori International Finance Dept. Japan Bank for International Corporation (JBIC)
TOIDA Mitsuru Director-General, Development Studies Department, Institute of Developing Economies, JETRO
TOSHINAGA Ikue Industrial Development Division, United Nations Industrial Development Organization (UNIDO)
TSURUTA Kameyoshi Executive Director, Institute of Asian Studies
UCHIDA Keiji Assistant Editor, International Development Journal
WAKASUGI, Ryuhei Vice-President & Professor, Yokohama National University
YOKOYAMA Hisashi Professor, Tsuda College

[The Secretariat: The Global Forum of Japan]
WATANABE Mayu Executive Secretary, The Global Forum of Japan
YAMADA Miki Officer in Charge, The Global Forum of Japan
FUJIYASU Koremichi Officer in Charge, The Global Forum of Japan
MURATA Aya Officer in Charge, The Global Forum of Japan
KOGA Kei Officer in Charge, The Global Forum of Japan
AOKI Atsushi Secretary Staff, The Global Forum of Japan
CHIIRO Nahoko Secretary Staff, The Global Forum of Japan
KASAHARA Ryuji Secretary Staff, The Global Forum of Japan
KAWAMOTO Mitsuru Secretary Staff, The Global Forum of Japan
MANOME Minako Secretary Staff, The Global Forum of Japan
SUWA Naoi Secretary Staff, The Global Forum of Japan

(Alphabetical Order)

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3. Biographies of the Mediators and Panelists

[ASEAN Panelists]

Noel MORADA / Executive Director, Institute of Strategic and Development Studies (ISDS) (the Republic of Philippines)

B.A. and M.A. from University of the Philippines. Master in Public Affairs from Cornell University in 1991, and Ph.D. from Northern Illinois University in 2002. Served various positions including Fellow at the Institute for Strategic and Development Studies (ISDS), Fellow at the Philippine-China Development Resource Center (PDRC), Fellow at the Center for Integrative and Development Studies (CIDS). Consultant both at the Center for International Relations and Strategic Studies (CIRRS; 1994-99) and the National Defense College of the Philippines (NDCP; 1998-2001).

KAO Kim Hourn / Executive Director, Cambodian Institute for Cooperation and Peace (CICP) (Kingdom of Cambodia)

B.A. from Baylor University in 1985, M.A. from Ohio University in 1991, and Ph.D. from the University of Hawaii at Manoa in 2001. Served various positions including Director at Khmer International Relations Institute, Visiting Professor at the University of Malaya and the University Kebangsaan Malaysia, and Member of the Supreme National Economic Council (SNEC) of Cambodia with the rank of Minister. Current position since 1994. Concurrently, Adviser at the Ministry of Foreign Affairs and International Cooperation.

NOORDIN Sopiee / Chairman and CEO, Institute of Strategic and International Studies (ISIS) (Malaysia)

B.Sc. (Econs) and Ph.D from the London School of Economics. Served various positions including Co-Chair of the Council for Security Cooperation in the Asia Pacific (CSCAP), the Chairman of Pacific Economic Cooperation Council (PECC), 1992-1994, and Malaysia’s Representative to the Eminent Persons Group (EPG) of Asia Pacific Economic Cooperation (APEC). Concurrently, a Member of the crisis management Executive Committee of the National Economic Action Council (NEAC), the Board of Directors of Malaysia’s Central Bank.

Sengchanh SOUKHASEUM / Director-General, Institute of Foreign Affairs (IFA) (Lao People’s Democratic Republic)

Graduated from Universite de Toulouse. Entered the Ministry of Foreign Affairs in 1977 and served various positions including Director General of the Department of International Organization, Minister-Counselor to France, and Ambassador to the Philippines. Current position since 2001.

TRINH Quang Thanh / Director General, Institute for International Relations, Ministry of Foreign Affairs (Socialist Republic of Vietnam)

M.A. from Johns Hopkins University, and entered the Ministry of Foreign Affairs. Worked with the Bureau of European Affairs, and appointed as Director of the Bureau of Policy Design. Ambassador to Canada, and current position since 2002.

Hank LIM / Director for Research, Singapore Institute of International Affairs (SIIA) (Republic of Singapore)

B.S. from Gannon Collage in Erie. M.A. and Ph.D. from the University of Pittsburgh. Served various positions including Director General of Pacific Economic Cooperation Council Secretariat and Director of the Center for Advanced Studies of the National University of Singapore. Concurrently, First Singapore Representative to the Eminent Persons Group (EPG) of Asia Pacific Economic Cooperation (APEC) and Professional Fellow at the Department of Economics at the National University of Singapore.

Edy PRASETYONO / Head of the Department of International Relations, Center for Strategic and International Studies (CSIS), Jakarta (Republic of Indonesia)

B.A. from University of Indonesia in 1989, and M.A. and Ph.D. from Birmingham University (U.K.). Visiting Fellow at the Japan Institute of International Affairs in 1991 and Australian Defense Studies Center in 1993. Concurrently, Visiting Lecturer with the Indonesian Naval Staff College, Armed Forces Staff College, and Air Force Staff College since 1995.

JAYASIRI Jayasena / Member of the ASEAN-China Trade Negotiating Committee

B.A. from the University of Malaya, and Diploma in Public Management from the National Institute of Public Administration. Served various positions including Assistant Secretary of international affairs at the Ministry of Primary Industries from 1981-88, First Secretary/Counsellor of the economic affairs at Permanent Mission of Malaysia, Geneva from 1988-97, Principal Assistant Director at the Ministry of International Trade and Industry from 1997-2002. Current position since 2002. Representative of Malaysia in multilateral trade negotiations in GATT/WTO and APEC.

Ba Thwin / Advisor, Ministry of Foreign Affairs (Union of Myanmar)

B.A. and M.A. from the University of Yangon. Joined the Civil Service in 1957, attended graduate Course at Williams College from 1961-62. Served as Director of the Economic Division at the Ministry of Foreign Affairs from 1978-83, Counsellor of the Embassy of Myanmar in Tokyo from 1983-85, Ambassador to Canada, Japan and Korea, and Director-General at the Ministry of Foreign Affairs from 1989-97.

TAN Ee Khoon / Assistant Director, External Economic Relations, Bureau of Economic Cooperation, ASEAN Secretariat

B.A. Hons from University of Western Ontario, and M.A. from Queen’s University in Kingston, Canada. Began career as economist with the Monetary Authority of Singapore. Subsequently, held analyst and research positions in various financial institutions and private industry ad trade associations before joining the ASEAN Secretariat as Assistant Director of the External Economic Relations.

Kusuma SNITWONGSE / Chairperson of Advisory Board, Institute of Security and International Studies (ISIS), Chulalongkorn University (Kingdom of Thailand)

Ph.D. from the Fletcher School of Law and Diplomacy, Tufts University. Served various positions including Distinguished Visiting Professor at the Fletcher School, Tufts University and Chairperson of the Department of International Relations at Chulalongkorn University. Concurrently, Advisor to the Institute of National Defense Studies under the Supreme Command.

[Japanese Panelists]

OKAWARA Yoshio / Chairman, The Global Forum of Japan

B.A. from the University of Tokyo and entered the Ministry of Foreign Affairs in 1942. Served various positions including Director-General of the American Affairs Bureau, Deputy Vice-Minister for Administration, and Ambassador to Australia and the U.S. Served as President of the Institute for International Policy Studies since 1993. Chairman of the Global Forum of Japan since 1993.

ITO Kenichi / Governor and Executive Director, The Global Forum of Japan

Graduated from Hitotsubashi University, and entered the Ministry of Foreign Affairs in 1960. Studied at Harvard University from 1961-63. Served in the Japanese Foreign Service until 1977. Since 1982 Executive Director of the Global Forum of Japan. Since 1984 Professor of International Politics at Aoyama Gakuin University, since 1990 President & CEO of the Japan Forum on International Relations(JFIR) and since 1999 President of the Japan Center for Conflict Prevention (JCCP).

KIMURA Fukunari / Professor, Keio University

Ph.D. in Economics from the University of Wisconsin-Madison in 1991. Researcher at International Development Center of Japan (IDCJ) from 1982-86. Assistant Professor of the Department of Economics at the State University of New York at Albany from 1991-94. Associate Professor with the Faculty of Economics at Keio University in 1994. Current position since 2000.

HAYASHI Yoshimasa / Member of the House of Councillors

Graduated from the University of Tokyo, and entered Mitsui & Co., Ltd. in 1984. M.P.A. from Kennedy School of Government at Harvard University in 1994. Assistant to Congressman Steve Neal and Senator William Roth in Washington, D.C. Served as Secretary to the Ministry of Finance from 1992-93. Elected as Member of the House of Councillors in 1995, and became State Secretary for Finance in 1999. Concurrently, Deputy Secretary General and Chief Secretary General and Administrative Reform Headquarters, at Liberal Democratic Party in the House of Councillors.

YANO Tetsuro / The Senior Vice Minister of Foreign Affairs

Graduated from Keio University and joined Sankyo Bussan Co. ,Ltd in1970. In 1983, elected for the first time to the Tochigi Prefectural Assembly.
The House of Councillors since 1992. Working in various positions including Parliamentary Vice Minister of Defense Agency, State Secretary for Agriculture ,Forestry and Fisheries and Chairman of the Committee on Foreign Affairs and Defense, House of Councillors.. Since Oct 2002, work at present position.

HAYASHIDA Hiroaki / Research Fellow, Yomiuri Research Institute, Yomiuri Shimbun

B.A. from the University of Tokyo, and entered The Yomiuri Shimbun in 1980. Served as Hanoi Correspondent from 1993-96, Research Associate of the Program on U.S.-Japan Relations at Harvard University from 1996-97, and Singapore Correspondent from 1997-2000. Concurrently, Deputy Editor of International News Department.

JIMBO Ken / Research Fellow, The Japan Institute of International Affairs

M.A. in 1998, and currently Ph.D. candidate at Keio University. Current position since 1999. Concurrently a member of the Working Group on Preventive Diplomacy in the Asia-Pacific Research Center at Waseda University and a member of the Japan National Committee of the Council for Security Cooperation in Asia-Pacific.

(In order of appearance)

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4. Outline of Discussions

Session I
"The Initiatives for the ASEAN-Japan CEP"

(1) Keynote Speech by Prof. KIMURA Fukunari (Japan) (Full Text Attached)
East Asia is an unprecedented place of vibrant internal distribution networks, driven by private initiatives that are, and have been, absent in Eastern Europe and Latin America. This must now be followed by a policy-level economic integration and the pursuant of free trade agreement (FTA) networks.
Japan-Singapore FTA and the Japan-Mexico FTA are already underway as official process, and there exists many opportunities for other bilateral FTAs. China is going further with a China-ASEAN multilateral FTA network and Korea is making its own moves. In essence, all three of Japan, China and Korea seems to moving in different ways, even if the goal is the same for all three.
Older economic theories do not always apply in full to FTA issues in the East Asian region, hence a need exists to integrate new concepts based on modern international trade:
- Fragmentation - some fragments of products are labour intensive (requiring significant human capital) whilst others are not. Coordination costs can be minimised through cooperation allowing a full fragmentation of production and thereby greatly enhance efficiency.
- Agglomeration - vertical production networks with geographic concentration of firms and human resources need to create a certain critical mass.
- A Firm - far more sophisticated and efficient methodology is being employed; the avoidance of internationalisation of all activities so that a proper concentration of core efficiencies can proceed. However, this is all not reflected in higher policy and broader economic policy integration will be required to create the stability for above factors to continue.

As a content of FTA networks, quality is the key to FTA networks. Many commentators talk of the speed with which FTA's can be developed outside East Asia and the ASEAN zone, and many states are being very aggressive about securing quick FTA network development. Following elements, however, should be taken into account:
- Flawlessness - need a 'clean' FTA which is different from the concept of a customs union.
- Scope/Contents - a conducive policy environment is required to push the trade movements and the development of the FTA network.

As a summary or homework, Japan needs a domestic political structural reform program to regain credibility in this process. The speed of the program is satisfactory in Japan but it needs to focus on setting high standards for the FTA development process.

(2) Lead Discussants' Comments

(a) Dr. KAO Kim Hourn (Kingdom of Cambodia)
The recent summit in Cambodia and the objectives that were developed there provides us with many goals including the promotion of FTAs, a China-ASEAN FTA (or CAAFTA). We can identify achievements, challenges and prospects as follows:(i) Achievements - the private sector has moved very fast and this will surely continue; the build up of the role and understandings of FTAs has been momentous; many policy dialogues has taken place and continue to do so; (ii) Challenges - there exist competing dynamisms amongst the Plus Three states; many political factors will challenge developments; the is a need to further coordinate structures and their development; need to focus on quality; and (iii) Prospects - there currently exists a great level of political will and this is being successfully linked to FTA development and reform.

(b) Mr. HAYASHI Yoshimasa (Japan)
In relation to the reforms required of Japan in this FTA process, the agricultural sector will affect the 'cleanness' of any FTA that includes Japan. Furthermore, we must focus on a harmonisation of capital, equity and currency markets and a diversification of currency reserves away from just U.S. dollars, yen and the euro and examine the possibility of a unified East Asian currency.

(c) Dr. NOORDIN, Sopiee (Malaysia)
There are six main imperatives in relation to the development of a FTA in the region: (i) Expeditiousness - the process must move forward quickly as we have now already lost over 12 years, 'just do it' and do it right must become the goal; we have not been either the tortuous or the hare, but rather the oxen; (ii) Mutual productivity - the process must be mutually productive and provide a win/win situation that see the outcome as a net positive if not an equally distributed positive result; (iii) Substantiveness - the process must not just be a paper victory; (iv) Pragmatism - the use of fixed mantras or formula must be rejected and a highly pragmatic approach adopted;(v) Successful - the process must succeed and ideals cannot be allowed to become obstacles to practical success; the best can be put aside for the good; membership should not be excessively widened (such as APEC); whilst ASEAN-China will success, so must ASEAN-Japan for the purposes of a successful balance; and (vi) Communitarian - the process must contribute to the community and build an environment of peace and prosperity for the regional community.

(d) Amb. Sengchanh SOUKHASEUM (Lao People's Democratic Republic )
The role of ASEAN has been catalytic but East Asian still faces many problems in a highly competitive world. Japan has a huge role in this process by being involved in the development of ASEAN member's economies, particularly in industries such finance, banking, information technology and human resource development. In this light, additional flexibility must be accorded to the newer members of ASEAN. There is great role to be played by the ASEAN-Japan Centre to promote, among other things, tourism, trade and investment from Japan into the smaller and newer ASEAN members such as Laos.

(3) Free Discussions
A participant from the floor fully endorsed the view that (i) the FTA process must proceed without delay, (ii) that FTA networks must be high quality, and (iii) that FTA development must be linked with domestic reforms. He believes that (i) Japanese policy frameworks are not fast and constitute 'too little too late' and that (ii) the lack of any mention so far of U.S. intervention in the integration process is noteworthy.
Another participant emphasized that a growth environment is the key to the success of any FTAs. Without such growth, he continued only domestic issues will dominate discussions, therefore an examination is required as to where growth actually comes from and exactly how to increase such growth as a interregional agenda as growth of 2-3% is not sufficient as a driver.
Another participant argued that speed is more important than cleanness or flawlessness, and that we should move forward to begin creating competitive forces right now. He continued on the agricultural liberalisation issue, people link the details of this with food security issues and environmentalism so these additional considerations must be included in the analysis. Some mentioned that the U.S. will not intervene in the progress of a Japan-ASEAN FTA but Japan must consider the opinion and position of China, and also proposed the development of regional tier to the IMF similarly to how the Asian Development Bank functions on a regional level while the World Bank is globally focused.

Session II
"ASEAN-China FTA negotiations and ASEAN-Japan CEP"

(1) Special Presentation by Mr. YANO Tetsuro, Senior Vice-Minister of Foreign Affairs (Japan)
Japan-ASEAN relations have a long history and this is the 50th year of diplomatic relations with Cambodia and Vietnam, 40th year with Indonesia. When, 30 years ago Prime Minister Tanaka visited ASEAN, there was much antipathy but the relationship has markedly improved. Japan has since sought to prioritize ASEAN - ASEAN now accounts for approximately 14% of Japanese trade, there has been a marked increase in human exchanges, including students. In essence, they are natural partners in this Year of Exchange. The strengthening of the bonds between Japan and ASEAN is a top diplomatic priority and there is an equally string expectation in ASEAN that Japan can play an active security role in the region. The issue of Aceh is good example where a recent meeting was initiated by Japan and support packages have been developed by Japan for use in Mindanao with the aim of promoting stability and peace in the area. We will see many commemorative events with an Executive Committee formed to promote the Exchange Year, there will be an ASEAN Summit and we will invite all the Heads of ASEAN Governments to come to Japan.
Economic revitalisation is a central goal of a CEP. The facilitation of trade is also a key objective. A clear focus on the strengthening of economic relationships is evident in Japan's recent conclusion of an agreement with Singapore and a proposed CEP and ongoing work within the WTO framework. Having said that, it is essential that Japan remain proactive in the promotion of such developments. The economic and diplomatic advancements of CEP are clear. The higher interregional and global interconnectedness of humans, goods and capital is evident and increasing. In 2000, 3,820,000 Japanese people visited East Asian states and 3,050,000 such people visited Japan. This figure makes up 64% of all tourists to Japan so it is very high and very important. Parallel with this, Japanese companies are setting up indispensable production facilities in East Asia (for the manufacture of items for export to Japan and abroad). The population of ASEAN stands at 500 million, whilst when it is ASEAN+3 that is considered, the population accounts for one-third of all the world's people so the magnitude of the potential is truly great.
On the issues of regional mitigation of the negative affects of globalisation, there has been much progress. After the 1997 crisis we saw the clear need to increase the level of partnerships and connectivity so as to avoid being 'tossed around' on the waves of globalisation. We lowered barriers and we need to continue to build a solid legal framework, a strong scientific research and development base and generally deepen ties. This is more than conventional cooperation and requires a multilayered cross-regional approach. The goal of stabilising the political environment in East Asia is important. The examples are clear with Korea beginning to open its doors to Japanese culture, China undertaking reforms, ASEAN enlarging and AFTA realized. Japan must seek to support all these developments.
The process to our goals is providing us with steady progress. We must have a secure and safe business environment and support for small to medium sized businesses. It is possible that Japan may even suffer short-term losses to see this process through but in the long term we will all be delivered great success. I hope for a sincere, candid and constructive Dialogue and wish all participants well.

(2) Keynote Speech by Dr. Hank LIM (Singapore)
Impact of China's Entry into the WTO is momentous event and a very hard decision on the part of the leadership in China which might be best characterised as a fifteen-minutes-to-midnight outcome to accept the terms and conditions of accession. The impact is most likely to be seriously felt on the Chinese domestic economy as much analysis of China and its position is not based on fact due to its sheer size, fears, misconceptions. China is in great place to play a constructive regional role.
Why did China initiate China-ASEAN FTA negotiations? There is perception that China dominates this arrangement, or at least this is the view coming from the ASEAN region, however, China has added to this perception. China needs a period in which to stabilise, such as five years and it is ASEAN who can provide this 'space'. Many say that China will benefit the most from China-ASEAN but that is not necessarily accurate as what must occur is absolute gains for all parties and this will tie in with the strategic long term goal of stability.
ASEAN response was at first warm at best but this mood is now positive and seeking the realisation of a regional FTA to overcome the Northeast /Southeast Asia divide where the states of the Southeast have realised they need the impetus from the Northeast states. Japan and ASEAN have a complimentary relationship but China and ASEAN are actually natural competitors. China seeks a China-ASEAN agreement because China requires further economic space and ASEAN requires the economic impetus from China, thus these goals must not be allowed the make an FTA 'dirty'.
There is a growing consensus that ASEAN+3 is an optimal outcome not three ASEAN+1s, but this may not be a practical way forward due to divergent local interests and differing economic stages of the parties. ASEAN should be seen as the 'hub' regardless of the modality chosen, when ASEAN+3 is the model then the hub role for ASEAN is weakened somewhat but this role must be encouraged and promoted.
With regard to the ASEAN-Japan CEP, the China-ASEAN process will be protracted and reliant on high Chinese economic growth (of at least 7% per annum) so ASEAN-Japan CEP must be conceptualised as a balancing influence between natural partners; ASEAN growth historical owes much to Japan though issues such as technology transfers and this interconnectedness must continue in the future. Japan must remain strongly committed to a process with ASEAN as the hub so that the positive outcomes can mitigate against potential regional problems such as Sino-Japanese antagonism. Regardless of all this, strong and continuing economic growth is the key to success.

(3) Lead Discussants' Comments (a) Dr. Edy PRASETYONO (Republic of Indonesia)
There needs to be a focus on the broader regional level of ASEAN challenges, on the main motive for a need to establish a regional identity, and on providing East Asia a voice on both global and local issues which in turn will work to promote both regional and global peace and security. Difficulties, however, can be seen in the sheer diversity in the region and the current lack of cooperation in Northeast Asia.
In determining the role of ASEAN as the hub in this process, we must ask two questions, (i) is ASEAN itself actually integrated and is it leading to an achievement similar in outcome to the EU, and (ii) is ASEAN the embryo for a broader East Asian community; both questions rotate around the dealings of ASEAN with third party states.

(b) Mr. HAYASHIDA Hiroaki (Japan)
In reality, when you put China's economic and military growth aside, East Asia is in the doldrums; from a journalistic viewpoint China is highly aggressive when compared to Japan who merely gets involved and says that things cannot be fully comprehensive because of Japan's economic situation, which is doubtful. ASEAN feels threatened by China and thus seeks to connect with Japan but this will remain very difficult in the current environment as China can use top-down undemocratic methods whereas Japan is often abstract and has longer open political processes to be considered, this China-ASEAN will go much faster and this is not good for regional balance. There are so many internal problems in Japan that must be dealt with, and Japan does not really know what ASEAN is about anymore as it has become so diverse.

(c) Mr. JAYASIRI Jayasena (ASEAN-China Trade Negotiating Committee)
It should be emphasized that not just the FTA is being sought with China but the CEP. There is much political doubt within ASEAN but a profit-loss analysis has been completed. As China is going to be the economic powerhouse of this century, the decision has been positive. China proposes the conclusion of the agreement by 2006, and ASEAN pursues it by earlier than 2010 or 2012, the realistic outcome would be in 2010. It is clear that both China and Japan want the processes to move more rapidly than ASEAN states as ASEAN seeks to deal with the short-term costs first.
China sees the China-ASEAN process as a two-way street but with the exception of ASEAN receiving some additional preferential treatment at the early stages. This all applies to goods only and the issues of services and investment liberalisation will be much harder. The concept of 'comprehensiveness' is a broad idea that involves taking the pre-existing level of cooperation to a higher level through the institutionalisation of cooperation and increased capacity building (an example of which is the Mekong Basin Development Agenda). These are characteristics of the CEP negotiation process that must be focussed upon as the same negotiation model to be used with Japan as with China.

(d) Amb. Ba Thwin (Union of Myanmar)
Myanmar is a latecomer among the ASEAN member states. It has a unique and important geopolitical position between India and China. Through all this, Myanmar is looking for a greater role in regional trade and seeks to establish a higher level of trust and confidence with its neighbours. It seeks to use complementarities with both China and Japan to promote these goals.

(4) Free Discussions
A participant from the floor pointed out that there existed a need to further discuss the likely political decisions and implications of the development of a CEP and also debate the details of the complimentary versus competitor market access issues. For example, he continued that the reason for the Japan-ASEAN CEP is because Japan needs a market and ASEAN fits this requirement combined with the fact that there are already enormous amount of Japanese investment.
Another insight from the floor was that the U.S.-ASEAN FTA position and a straight bilateral China-Japan FTA or CEP as a goal would become unlikely just as a U.S.-Japan FTA was never in need because of the role played by GATT. He continued that individual FTA agreement and regional /institutional approach should be 'selective' in condition with the effectiveness and the feasibility.
A lead discussant responded with these questions that the key debate is one between supra-nationalism on one hand and inter-governmentalism on the other. According to him, the former sees ASEAN as one grouping and the latter sees it as interlocking framework agreements that are however negotiated on an individual basis. He concluded that the outcome of this debate will determine the paradigm that will govern the way the entire set of issues move forward.

Session III
"Globalization and Asian Values"

(1) Keynote Speech by Dr. KUSUMA Snitwongse (Thailand)
Globalisation goes hand-in-hand with interconnectedness with others, interconnectedness and many people see this as purely a phenomenon associated with Western values. In Asia, Asian values are seen as fundamentally connected to the economic miracle. These values are linked to Confucianism but there still exits much diversity within the values held in the Asian region. Commonalities can be identified as: - A paternalistic state;
- Government guidance of private enterprise;
- A communitarian outlook;
- The protection of social order;
- The maintenance of established hierarchies and respect; and
- The use of a non-confrontation consensus model.

NGO's and similar bodies that exist outside these traditional value frameworks are seen as the promoters of Western values and are thus treated with suspicion, but there is really no way for the Asian community to adopt just the technology of the West and a management style without other elements of the style such a full place for the rule of law. The Thai Prime Minister recently hosted a meeting of Asian political parties and at a main event of the conference quoted the Western values of Rousseau, which shows the evidence that the role of such values is all encompassing.
It should also be pointed out that within each country that has opened its door to globalization, there are those who embrace international value system and those who are sidelined in the process of globalization. The latter tends to turn to traditional values, seeing alien values and culture as threats to their identity.
In the process of globalization in which Japan and ASEAN countries interact through the large flow of capital, technology, management know-how, information as well as cultural intersection through human contacts, there exist many channels through which shared norms can help strengthen a shared sense of identity. It is for this conference to identify the way towards building shared values that will lead to a sense of identity. The late Prime Minister had expressed his concern on this very issue and this should be a good start for the building of identity based on common values.
In this regard, it is noteworthy to quote the Noble Laureate Amartya Sen who said that the main hope for harmony in the world depends not on cultivating identities of uniqueness, but on fostering "plurality in our identity".

(2) Free Discussions
A participants from the floor outlined that we must recognise that economics never occurs in a vacuum and economic relationships, like all human interactions, are always value laden to some degreeDHe continued that once this is understood, then we can move on to utilise our differences not as grounds for divisive debate but as a source of pluralistic dynamism.
Another participant stated that it must be seen that Japan has a distinct value and cultural system when compared to each of the ASEAN states, yet a FTA/CEP dialogue between the two can still develop.
One argued that the Asian/Western values distinction is not necessarily very useful as some of the elements that have been spoken of today as 'Asian' are evident in other places such as the paternalistic state in Europe throughout the 19th Century and government controlled enterprises in Europe right up to today. Another laid out that communitarianism is also very common throughout the world and there is also great difference within Western values such as between those held by the U.S. and those held by Europe. He continued that we should also ask, 'do we work to live, or do we live to work?' as a central value consideration.
Several participants have pointed out that we must distinguish between three sets of norms, (i) free style Anglo-Saxon style trading, (ii)development facilitation, and (iii) sectoral protection. Another participant said that according to the research in nine Asian states, all but Japan rate their nationality as the number one identity factor whilst only 60% did so in Japan, so we have to be aware that different levels of importance are associated with such considerations throughout the region.

Session IV
"The Summing-up of the Whole Dialogue"

Session IV was dedicated to wrap up discussions of previous three sessions. Co-chair of this final session; Prof. ITO Kenichi, Governor and Executive Director of the Global Forum Japan and Prof. Hank LIM, Director for Research, Singapore Institute of International Affairs, summed up the dialogue as following:

(1) Prof. ITO Kenichi (Japan)
When one panellist asked whole participants during the discussion, "are there anyone here who oppose to the East Asian integration?" nobody raised an opposition. It was a symbolic fact, which may not have even occurred more than five years ago, that a positive consensus exists on the role and value of 'East Asia'. ASEAN+3 has shown the ability to glue us all together in a positive manner where roles are played as mediators or hubs as a regional asset. Although the FTA initiatives have been pursued in bilateral manner without visible coordination with each other, the idea of East Asian integration as an ultimate goal has been also growingly shared among countries in this region.
One of the key findings on Session 1 and 2 was how we should accommodate the speed and the quality of FTA/CEP. CEP between ASEAN and Japan will illustrate the distinctions between a CEP based on speed and one based on quality: Today, the outcome seemed to be inclined more towards speed as a goal and that quality is more inclined to work itself out as a product of a faster process.
On Session 3, we have come to recognize the need of an identity for East Asia and then, can a real process of integration is successfully undertaken. This will of course be possible through nurturing our 'shared identities' but we are yet to formulate an Asia-wide value set, and still have a vast diversity of values. However, the widening and deepening process of economic interdependence, flow of people, technology and money will further enhance new identities and values that anchors the East Asian integration.

(2) Dr. Hank LIM (Singapore)
An intellectual dialogue between Japan and ASEAN is always very complex, hence it is very important that we seek some type of consensus that allows us identify areas which require additional discussion and dialogue so as to arrive at workable modalities that can be applied to the East Asian community at large.
On Session 1, regional equations are very important as a component part of globalisation: The ASEAN-Japan CEP should be seen as an extension of this rationalization process, but does ASEAN have the necessary capacity to fulfil the roles that are being carved out for it. FTAs must be seen to strengthen the international system as a whole.
On Session 2, ASEAN-Japan CEP must be seen in the context of regional integration and not as a process alone but rather as a part of a prolonged and much broader approach. Additionally, the role of China must not be seen as a threat but as an opportunity that should be accepted, as the China-ASEAN negotiations continue, and they will surely be extremely protracted, the best aspects of the agenda should be examined and seen as generally positive for all in the region.
On Session 3, the issues of values is a very difficult one as it relates to an interpretation of what globalisation is doing to the world. We must recognise that modern globalisation is here to stay and the interaction between the different value and culture systems will stay with it.
In summary, we may ask what have we learnt today or what further needs to be done; (i) we really do not know as yet exactly what configurations the East Asian community will be in at stages in the future, (ii) we need more dialogues on the technical intricacies of the issues so as to expedite the processes, and (iii) we need to build a critical mass of goodwill so as to overcome significant amounts of historical baggage.

Policy Recommendations

One of the major achievements of the Second Japan-ASEAN Dialogue was that participants from both Japan and ASEAN had very frank and intensive discussions throughout four sessions. This Dialogue ensured each participant to express their own view to nurture further discussion to find new ideas, commonalities and differences. Thus, the Dialogue did not aim at reaching consensus views or coordinated recommendations. However, there were many points that participants found their common ground, which deserves firm policy recommendations for the further consolidation. Below are the several findings in the Dialogue:

(1)The "Speed" and the "Quality" are both keys of FTA networks. However, the "speed" should be emphasized at the early stage of FTA developments in order to maintain the momentum and dynamism of creating networks in coordinated pace without delay. The "quality" and "cleanness" of FTA have to follow the "speed" by enhancing flawlessness in liberalization and the scope of covered contents.
(2)Further enhancement of "fragmentation", "agglomeration" of East Asian market will be needed. In this regard, Japanese domestic reforms including political and economic structural reforms are critical to regain market credibility. Further integration and bridging the gap among ASEAN member states are also important policy agendas.
(3)The FTA process should be mutually productive and provide a win/win situation that see the out come as a net positive if not an equally distributed positive result. Bilateral FTA should stimulate the liberalization process by its own force, but also should complement and be compatible with other regional and global frameworks such as AFTA, APEC and WTO.
(4)Future coordination of Japan-ASEAN CEP and ASEAN-China FTA (and ASEAN-Korea FTA) will be essential. These ideas should be conceptualized as both balancing influences and cooperating forces between Japan, China and South Korea. China should not be seen as a threat but as an opportunity for promoting East Asian economic liberalization. ASEAN will play a major role in coordinating economic relations with these three countries in bilateral, and regional frameworks such as ASEAN+3.
(5)Identification of "East Asia" would be a very effective norm to promote regional integration in an era of globalization. Although East Asia is characterized as diverse region, economic and political integration based on pluralistic dynamism could cultivate the "shared identity" and the notion of "community building."

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5. Papers of the Speeches

Welcome Reception

Welcome Dinner Speech

by ITO Kenichi,
Governor & Executive Director, The Global Forum of Japan

Dr. Kusuma Snitwongse, Amb.Chew Tai Soo, Amb.Domingo Siason, Other Distinguished guests from the ASEAN ISIS and the ASEAN Embassies in Tokyo,Ladies and Gentleman;

On behalf of The Global Forum of Japan and its members, I would like to welcome all of you who have come to Japan to attend the Japan-ASEAN Dialogue on "Japan and ASEAN:Cooperation for Peace and Prosperity in the Asia-Pacific Region" hosted jointly by the ASEAN ISIS and the Global Forum of Japan.

As we recall, we had the first of the series of Japan-ASEAN Dialogue on February 20-21 1ast year. It was held on the day following the visit of President Bush to Tokyo in the wake of the terrorist attacks of September 11, 2001. As it was so between President Bush and Prime Minister Koizumi, the discussions of the Japan-ASEAN Dialogue were also focused on the issue of how to deal with the international terrorism. The 2nd Japan-ASEAN Dialogue is going to be held against the background of an imminent U.S.attack on Iraq and an impending nuclear brinkmanship of North Korea. In this sense, it must be said to be very timely for us to meet here tomorrow.

However, as important as this background for the timeliness of our 2nd Japan-ASEAN Dialogue is the fact that this Dialogue is designated to be a kick-off event of the "ASEAN-Japan Exchange Year 2003." As you all know, Prime minister Koizumi proposed to designate the year 2003 as the "ASEAN-Japan Exchange Year 2003" during his visit to Southeast Asia last January. And on November 5 at the ASEAN plus Japan Summit Meeting in Phnom Pehn the leaders formally declared the initiative of the Exchange Year 2003. Japan was designated as a key co-ordinator for the month of January to plan and organize a series of exchange activities in Japan. It is the honour of the Global Forum of Japan to host the first of such exchange activities.

Ladies and Gentlemen,
This evening’s dinner is intended, first, to welcome you all who have come from the ASEAN countries and second, to provide you all who are here this evening with an occasion to get acquainted with each other in advance of the tomorrow’s meeting. To facilitate this purpose, 1et me, first of all, introduce all those who sit around the table this evening.

---List of names as attached hereto---

The Global Forum of Japan is known for its long history of international exchange activities dating back to 1982, when Japanese, Americans, Europeans and Canadians met in Washington and established the then so-called Quadrangular Forum. After the Quadrangular Forum was dissolved in 1991 in the wake of the end of the Cold War, its Japanese component reorganized itse1f into a national body for international exchange and has been active as such since then in the name of the Global Forum of Japan.

The Dialogue we are going to have tomorrow will be the 2nd of a series of Japan-ASEAN Dialogue to be organized jointly by The Globa1 Forum of Japan and the ASEAN ISIS. Taking advantage of this occasion, I would like to express my special indebtedness and obligedness to Dr.Kusuma Snitwongse, who, as a contact person for the ASEAN ISIS, did all the necessary coordination works to make the tomorrow’s Dialogue possible. I would also like to thank for the financial support given to us by The Japan-ASEAN Exchange Projects, without which this Dialogue was impossible.

Now I would like to turn to Ambassador Okawara Yoshio, who is the Chairman of The Global Forum of Japan and the host of this evening’s dinner, and propose him to toast our guest from the ASEAN countries. Ambassador Okawara.

Session I
"The Initiatives for the ASEAN-Japan CEP"

Keynote Paper

by KIMURA Fukunari,
Professor, Keio University

The concept of "East Asia"
The East Asia including Northeast Asia and Southeast Asia is now at a critical turning point. In East Asia, we have observed substantial advancement of economic integration at the level of private economic activities. On the other hand, economic integration at the policy level was way behind, compared with other regions in the world. However, as a forerunner, Japan-Singapore Economic Partnership Agreement (JSEPA) was signed in January 2002 (being effective in November 2002), and the China-ASEAN framework agreement was concluded in November 2002. And now, the construction of free trade agreement (FTA) networks has begun in East Asia.
Japan is currently negotiating with Mexico for the second FTA and at the same time, starts preparing for the framework of Japan-ASEAN economic partnership including FTA. In addition, working groups with the Philippines and Thailand have already been formed for bilateral FTAs, and Malaysia and Indonesia have also started considering FTA conclusion with Japan.
The China-ASEAN talk on concluding FTA has advanced further. The framework agreement decides that the early harvest program for agricultural products will begin in 2003 and the tariff reduction for manufactured goods and others will start in 2005.
Korea has successfully finished negotiating over FTA with Chile and is supposed to activate its approach to ASEAN under the new president.
These recent moves of Northeast Asian countries are not explicitly coordinated under a unified scheme. However, all countries in East Asia share a common understanding that the ultimate goal of the FTA initiative is the economic integration of East Asia as a whole. If we look back to history in the last century, we must interpret the shared value as a result of epoch-making changes in the regional concept. Beyond diversity in historical and cultural background as well as differences in development stages, people in East Asia start sharing the view that East Asia is a natural entity heading for economic integration.
In this transition process, it is ASEAN that has shown a model of integration with admitting diversity across partners. It was thus natural that the East Asian integration started from the construction of FTA networks in which ASEAN is at the pivotal position. Northeast Asian countries have deepened economic integrity but have not completely cleaned up negative heritage from the past, from which political turmoil sporadically erupts. Serious economic integration in Northeast Asia requires a considerable time and effort to remove these obstacles. In such political environment, ASEAN is playing an important role as an intermediary or a catalyst for the whole East Asia region.

The East Asian economy leading the world
The East Asian economy drastically deepened its integration in the past ten years. East Asia now has much more sophisticated international production/distribution networks than East Europe or Latin America does.
Key words to characterize East Asian production/distribution networks are "fragmentation," "agglomeration," and "a firm." "Fragmentation" means to separate out production blocks and locate them in their appropriate places. In East Asia, the trade of intermediate products such as parts and components in electric machinery has explosively increased. One of the necessary conditions for enabling fragmentation is a substantial reduction in service link costs to connect remotely located production blocks. Service link costs include transportation cost, telecommunication cost, and various types of coordination cost. The reduction in service link costs is the very indication of globalization, which starts working effectively in East Asia.
The concept of "agglomeration" is useful when we discuss economies of scale in geographical dimension. Vertical production networks with geographical concentration of corporate firms and human resources characterize agglomeration in East Asia. Standardized parts and components are procured from the most price-competitive suppliers in the world through, say, internet browsing. On the other hand, customized components and modules with frequent spec changes and strict supply timing must come from suppliers located nearby. Vertical production chains become increasingly sophisticated, utilizing the merit of both fragmentation and agglomeration. National and local governments in East Asia are in harsh competition to formulate a critical mass of agglomeration because economies of scale provide certain stability in industrial structure.
The third concept, "a firm," takes care of recent phenomena of improved economic environment allowing firms to formulate efficient corporate structure and inter-firm relationship. Firms always make internalization choices; i.e., they decide what to do by themselves and what to ask other firms to do. When the surrounding area has various competitive firms in related industries and allows them to establish flexible contractual relationships, firms can concentrate their resources on activities with core competence and make themselves efficient. In the current East Asia, we often observe firms with efficient production/distribution networks in which they sometimes establish foreign affiliates and sometimes make OEM contracts or utilize EMS firms.
East Asia has been a growth center in the world with globalizing corporate activities. To upgrade the Asian dynamism into a new dimension, we must proceed to economic integration at the policy level. The effort should include the restructuring of traditional import-substituting industries in more competitive environment as well as the establishment of policy environment allowing further fragmentation and agglomeration for export-oriented industries.

Quality matters for the FTA network
By now, virtually all East Asian countries have become positive in concluding FTAs with other countries in the region. It is thus very probable that FTA networks will be formed in East Asia. Now the issues concerned are the "speed" of the network formation and the "quality" of the network.
As for the "speed," we must note that the required pace is likely to be set by the timing of approach from other parts of the world, rather than just considering the timing of taking care of each country's domestic problems. Countries outside East Asia are pretty aggressive in trying to establish connections with East Asian countries. Singapore had an FTA with New Zealand and has already finished the core negotiations for an FTA with the United States. The United States declared that it would be ready to negotiate over concluding FTAs with other Southeast Asian countries. Korea has completed negotiations with Chile, and Japan is currently under official negotiation with Mexico. It is good to extend such links with countries outside the region so as to make East Asia open to the world. However, it is crucially important to proceed to East Asian integration at the same time without delay. Otherwise, East Asia would be broken into pieces and lose its dynamism at the regional level. We know that such fear is not pointless from our unpleasant experience as outsiders in North America and Europe.
The "quality" of FTA network consists of two elements: the flawlessness in liberalization and the scope of covered contents.
The flawlessness in liberalization is evaluated by how far the list of exclusion from liberalization can be reduced and how loosely and concisely the rule of origin (ROO) can be specified. In contrast with customs union, free trade area has a convenient property with which a new FTA can be concluded without having any readjustment of already-concluded FTAs and thus the sequential formation of FTA network is possible. However, the compilation of bilateral FTAs does not automatically mean the formation of a plurilateral/regional FTA. In case of customs union, theoretically speaking, once an out-of-region product comes through the common wall of trade barriers, we do not have to specify the origin of the product anymore in intra-regional trade. In case of FTA network, on the other hand, the certificate of origin is always needed in intra-regional trade because the exclusion list and ROO are different across bilateral FTAs. Such complication in FTA networks is called spaghetti bowl phenomenon. To avoid the problem, it is important to conclude "clean" bilateral FTAs with short exclusion lists and loose ROO.
The scope of covered contents means what sort of elements beyond simple tariff removal can be included in FTAs. Particularly in the context of East Asia, we need a set of measures to further enhance the dynamism of international production/distribution networks. Note that most of the firms which have export-oriented affiliates in East Asia pay little tariff, thanks to the tariff rebate system of imported materials to produce exported products. It means that tariff removal by FTAs does not benefit these successful firms very much. We thus should not be satisfied with tariff removal but try to include various elements such as trade facilitation, removal of non-tariff measures, harmonization of standards, protection of intellectual property rights, and others in order to establish integrated business environment in East Asia.
Compared with Europe and Latin America, East Asia has weak inclination to linking FTAs with domestic reform. If we try to avoid domestic politico-economic adjustments in concluding FTAs, it may end up with FTAs of low quality just to clear the loose disclipline imposed by GATT/WTO. We certainly should not imitate the experience of AFTA ten years ago in which immediate hardcore liberalization was postponed and demonstration effects of concluding FTA on FDI was emphasized. It is now important for East Asian countries to construct FTA networks of high quality with strong determination and strategic mind.

If we set our goal in further enhancing the dynamism of East Asian economy, homework for Japan and ASEAN countries can be set as follows.
As for Japan, the strong recovery and substantial structural reform of domestic economy are the first priority in order to reclaim the reliance on the Japanese economy. With regard to international commercial policies, Japan must lead the formation of FTA networks by setting the quality standard. It means that some difficult issues such as agricultural protection and the movement of natural persons cannot be evaded. The public support for FTA initiative is now pretty strong, and thus it becomes difficult for some specific sectors to block the conclusion of FTAs. Now the issue is not whether we can just conclude FTAs but whether we can strategically link the FTA initiative with domestic reform. The effective links with other policy modes such as international finance policy and economic cooperation policy are also hoped for.
As for ASEAN, the immediate issue is how to construct economic system resilient in more competitive economic environment. Regional tariff reduction under the AFTA scheme primarily stimulates the restructuring of import-substituting industries that were formerly captured by narrow domestic markets. In addition to such effort, ASEAN has to head for the seamless integration to further activate international production/distribution networks.
ASEAN latecomers will not have much time to adjust for economic integration. Not trying to hastily foster local indigenous firms directly, they must first positively invite foreign firms to construct industrial clusters of certain size so as to build up stable industrial basis.
In the meanwhile, ASEAN is expected to continuously play a role at the pivotal position. To fulfill the task, ASEAN must strengthen their economies with keeping the integrity. And strategic moves are hoped for in constructing FTA networks of high quality.

Session II
"ASEAN-China FTA negotiations and ASEAN-Japan CEP"

Keynote Paper

by Hank LIM,
Director for Research, Singapore Institute of International Affairs(SIIA)


The accession of China to the WTO as the seventh biggest world exporter is expected to have significant impacts on the international trading system. The most important impact will be felt in the Chinese economy as it has to abide on liberalisation and de-regulation of its largely closed domestic economy. On the other hand, China's exports are accorded protection under the WTO's most favoured nations clause (MFN). The market access commitments made by China leading to its accession will increase the import of foreign goods, foreign firms and investment into China, and thus increasing the level of competition. Accession of China to the WTO will bring double-edged benefits and costs to China. Liberalising the Chinese economy will increase the efficiency of its economy but at the same time it will put pressure on domestic firms, requiring major restructuring of China's product, services and labour markets leading to increased unemployment and large-scale industrial dislocation. Over the long run, it is expected that China would benefit from the process of liberalisation and de-regulation following its entry to the WTO.
Against the background of these major changes, challenges and opportunities, China proposed a free trade area (FTA) with ASEAN in November 2001. Initially, there was a negative perception or at best a lukewarm reaction given by some ASEAN countries on the ASEAN-China FTA. After one year of intensive study and preliminary discussions between ASEAN and Chinese Senior Officials, ASEAN officially agrees to the establishment of ASEAN-China FTA within 10 years. The ASEAN-China FTA is a major undertaking and has wide and deep economic and political implications for both sides.


Several economic studies have shown that East Asia economic regional co-operation will bring greater benefits to East Asian countries as it involves a larger grouping. In other words, the ASEAN + 3 framework should be more preferable than a series of ASEAN + 1 arrangement. However, in practice it will be very difficult to achieve this, given the very diverse economic interests and structural differences among ASEAN economies. Although it is less optimum, it appears that the ASEAN + 1 arrangement is more feasible than the overall arrangement of ASEAN + 3 format, notwithstanding of over-stretching the limited resources of ASEAN and the risk of overlapping arrangements.
Another important aspect of this ASEAN + 1 arrangement, that is ASEAN-China, ASEAN-Japan and ASEAN-Korea, is the central position of ASEAN as being the "hub" for East Asia. This is potentially a very strategic and powerful potential for Southeast Asian countries. ASEAN may gain this central position more so by default rather than having the intrinsic virtue or power over Northeast Asian countries. The reason is simply because none of the Northeast Asian countries would be allowed to gain a leadership position. It is not likely a sub-regional structure can emerge in Northeast Asia in the foreseeable future.
The format of the ASEAN + 1 arrangement must be broad and comprehensive that can accommodate the interests of its constituent members as well as the interest of the partner economy. Conceptually, ASEAN-China FTA negotiations would not be easy and straightforward because ASEAN and Chinese economies are not complimentary over a broad range industrial production. They are both competing and exporting to the same external markets. To overcome this initial structural incompatibility, China has offered to ASEAN a set of "early harvests" benefits in the sense that while China offers preferential tariff to ASEAN exports there is no reciprocal treatment of China's exports to ASEAN, particularly to the CMLV (Cambodia, Myanmar, Laos and Vietnam) countries.
From the start of negotiations China was more interested and prepared in negotiating the issues and agenda for an FTA. Partly it can be explained due to the fact that China is represented by a single entity while ASEAN is composed of the original 6 ASEAN countries and CMLV. Even among the original 6 ASEAN countries, there is a wide range of views, and differing domestic political, economic and social configurations and priorities. Partly it can be explained that ASEAN economies are growing much slower and less dynamic compared to China. ASEAN's negotiating posture seems more of a reacting one, rather than proactive in identifying opportunities in the FTA negotiating process with China.
It would be a protracted process in the ASEAN-China FTA. If the scope of the FTA discussions is limited, there would be more difficulties to strike a positive sum game result for both sides. Even if both sides agree on the scope and specific details of the FTA arrangement, there is a possibility that there might be a delay or to yield to a "dirty ASEAN-China FTA" (diluted FTA) if economic growth and macroeconomic conditions in ASEAN and China are not substantively improving. For example, if ASEAN fails to attract sufficient foreign direct investment (FDI) to generate sufficient sources of growth during this period of negotiations. Alternatively, if there were large-scale unemployment or serious structural dislocations in China arising from liberalizing its domestic economy, the FTA process would be seriously disrupted.
Basically, the ASEAN-China FTA is based on the assumption or hypothesis that it is a positive sum game, meaning that each party will gain positive values. The prevailing perception is that in the initial period China would gain relatively more than ASEAN and subsequently each side would increase its absolute gain. Over the long run, the absolute gain in positive income effect would exceed the negative substitution effect for both ASEAN and China. The grey area of the ASEAN-China FTA negotiation is to determine which side would be getting more of the relative trade and investment gains in a dynamic and long run context.


The economic structures of ASEAN and Japan are complementing. ASEAN is rich in natural resources while Japan is rich in technology and investment capital. However, the Japanese economy is saddled with many forms of restrictions and non-competitive economic practices, such as high tariff and quota on rice imports, explicit and implied restrictions on financial and banking services, and many forms of trade impediments in domestic sector. Arising from these structural impediments in the Japanese economy, it is not possible to negotiate a standard free trade area.
Japan and Singapore concluded the Japan-Singapore Economic Partnership Agreement (JSEPA) early last year. It is a very important milestone for both countries, particularly for Japan since it is a departure from its well-established multilateral trade policy. Equally important is that JSEPA sets a precedent in terms of trade policy and a model for economic partnership for Japan and its important trading partner such as ASEAN. When ASEAN-China signed a formal agreement in November in Phnom Penh to start negotiations for FTA within 10 years, it was the final policy push for Japan to formalise its ASEAN-Japan Comprehensive Economic Partnership as announced by Prime Minister Koizumi in January 2002 in Singapore.
Since comprehensive economic partnership arrangement is not a free trade area as defined by international trade theory, its scope is not clearly defined by a standard model. Therefore, in the ASEAN-Japan CEP process, the scope and structure would have to be carefully studied to identify the lowest common denominators for both sides that would expedite the process of negotiation. Theoretically, the scope must be broad enough to allow sufficient negotiation space for Japan and the diverse economic interests of ASEAN economies, taking into account the comparative advantage of each side.
Interestingly, the concurrent negotiation process between ASEAN-China FTA would definitely provide a strategic forward thrust for the ASEAN-Japan CEP and a healthy competition that would provide a strong impetus for the realisation of a wider vision of East Asia economic community perhaps in the next 25 years.
The success of the ASEAN-Japan CEP is very much dependent on the Japanese strong interest and capacity to assist ASEAN industrial upgrading and competitiveness. After the Asian financial crisis in 1997, it became acutely evident that many ASEAN economies require major structural re-organisation and upgrading.
Without those changes in the real and financial sector, ASEAN economies would not be able to take full advantage of a comprehensive economic partnership with Japan. Currently, foreign direct investment (FDI) has been radically shifting in favour of China and the gravity of economic dynamism and growth has contributed to the widening of economic gap between Northeast and Southeast Asian countries.
Japan has to extend substantive technical and financial assistance to ASEAN countries with a view to radically re-organise and re-structure its economies. Otherwise, the proposed ASEAN-Japan CEP would not render positive benefits to both sides. Specifically, ASEAN countries need to upgrade the quality of their labour force, infrastructural upgrading with respect to administrative and governance in public and private sectors. It is imperative and vital for ASEAN to retain and attract FDI as sources of economic growth. ASEAN must be economically vibrant to minimise social and political instability. In turn, a viable and vibrant ASEAN economy would have the capacity and propensity to be the critical "hub" to connect intrinsically the rivalling economic powers of Japan and China. Such a regional environment is a precondition for the establishment of a prosperous and stable East Asia in the 21st century.

Session III
"Globalization and Asian Values"

Keynote Paper

Chairperson of Advisory Board, Institute of Security and International Studies(ISIS)

Globalization and Its Impact

Ever since the word globalization has been used to refer to the interconnectedness of the world, the interpretations and reactions to it have been varied. Some see it as a positive force that will bring about economic well being, especially to the less developed countries once they join in the world economy, and along with it the idea of democracy and liberty. The latter would be a natural development as more of the middleclass come to the fore. Through technology, especially the communication technology, the phenomenon of rising expectations could follow and more demands made for change to greater equity.
However, protest riots in Seattle, Prague, Nice, Gothenburg and Genoa indicate that there are a large number who see globalization negatively. Particularly in economic context in which globalization is seen as creating inequity as its benefits fail to reach many others. Especially in the non-western and less developed countries, there is greater sense not only of inequitable benefits, whether in the form of wealth gaps, increasing poverty levels, increasing rate of infectious diseases, or increasing vulnerability among sectors of society. With the economic crash in 1997 that started in Thailand and soon engulfed other countries in the region almost without exception, opening the country to globalization came under greater scrutiny and criticism if not total rejection.

Globalization and Asian Values

One question that first comes to mind is whether there are values that we can identify as Asian values. In the western eyes, Asian values that were seen as being the basis for economic miracle in East Asia were generally identified with Confucian values. Nevertheless, such generalization needs to be tempered by the recognition of the diversity of cultures in the region. Cultures that derive from Islam and Buddhism to name the major ones have to be taken into consideration. However, because most business leaders in Southeast Asia are of Chinese origins and, therefore, there is basis for linking Confucian values to the economic miracle that occurred in East and Southeast Asia. Nevertheless there are enough similarities that the term "Asian values" is valid to a degree. Such values can be said to include a paternalistic state, government guidance and protection of private enterprises, a communitarian outlook with a sacrifice of individual rights to those of the family, community, and nation, and emphasis on social order, harmony, and discipline, as well as social hierarchy that includes respect for those of higher status and age. Other Asian values include a consensual approach that reflects the importance of face-saving. This is reflected in the so-called ASEAN way of non-confrontation and agreement by consensus. Nevertheless, there must be recognition that there are differences in traditions from one country to another in Asia.
It should also be recognized that Asian values have been emphasized, in the case of certain Southeast Asian countries, to legitimize the regimes in power Often rejection of Western values is considered necessary to protect the country from decadent influences of the West. Western culture that places great value on individualism that translates into respect of human rights is often seen as going against government power based on paternalism. Non-governmental organizations (NGOs) and citizen groups are identified as those promoting Western concepts and values such as human rights and worse for being the tool of Westerners who financially support them.
It can be said that Asian values tend to be thought of as traditional values while Western values are essentially seen to be modern ones. In this sense the recognition of values are being geographically defined. Nevertheless, Western values had been embraced with relish in the past as a way of resisting the incursion of Western colonialism as in Thailand and else where in the late nineteen century.
Through globalization, Asian countries are faced with the dilemma between opening to the West for their technology, methodology, capital and keeping their traditional values from being tainted. In the case of Singapore, while it preaches Asian values, in practice it has been selective in its implementation as it places ability over personal relationship. At the same time it defines leadership in such a way to legitimize state paternalism. On the whole, one sees a variation of the mixture of Asian values and Western values from one country to another. In the case of Malaysia, its commitment to rapid development and economic liberalization necessitates further encounter with the West in order to benefit from technology and methodology, knowledge, and capital transfer. This raises a question as to what fundamental values and premises on which Malaysia's relations with the international community are to be based on.
While Asian states are trying to cope with globalization and its impact on traditional values, be they political, economic, social, or moral values, there is no escaping the changes that will come with their opening up to the West. There is no way to take only technology and management style, for example, without changing in the cultural mindset. Individualism, egalitarianism, the rule of law, and public participation have been making inroads and inevitably disrupting the valued traditional social order.
In the case of Thailand, the downside of globalization in the form of economic crisis in 1997, led to reassessment of one's economic system and institutions as well as political, social and cultural structure. Chai-anan Samuthavanich, a leading academic, called attention to "culture as capital". In his view, financial and industrial capitalism has let Thais down. To cope with this challenge, he called for Thai society to put back its faith and seek refuge in its stock of "culture capital". In other words, he was making a plea to return to traditional social values which in the past had so effectively enabled people to live together in harmony, such as respect for elders, tolerance, compassion, gratitude to parents, family ties, and mutual assistance. However, that harmony was often achieved at the expense of the weak and the disadvantaged who were exploited by those in power.
While turning to traditional social values can help ease the pains of the negative impact of globalization, it is not possible for a country to turn it back to the process by sweeping out the undesirable alien influences. Another argument against turning back to traditional culture is that culture is not etched in stone and in the world in which information and culture spread through the media at lightning speed, it is almost impossible that keep culture from changing. It is interesting to realize that foreign cultures are not necessarily cloned. Instead, it has been argued that Western values, instead of being accepted wholly, instead emerge as "local counter-discourses which challenge, absorb, incorporate and finally disregard the leftovers of so-called Western hegemonic culture.1 The localized culture in Asia has been demonstrated to have the potential to indigenize foreign influence.2
It should also be pointed out that within each country that has opened its door to globalization, there are those who embrace international value system and those who are sidelined in the process of globalization. The latter tends to turn to traditional values, seeing alien values and culture as threats to their identity.
It is those who are sidelined and see the threats to their identity that could bring about the danger of chauvinism and xenophobia. It should also be recognized that in the process of globalization, there are those who embrace international value system. The result is that the two groups could come into conflict. As there is no stopping cultural change in the globalized world, the best hope is that the old and the new will lead to a productive synergy.3
The issue of identity needs also to be discussed in the context of globalization and values. Moreover, as the them of this conference is Cooperation for Peace and Prosperity in the Asia-Pacific Region, the question of identity is very much of relevance to our discussion.
Identity as being discussed here takes on the definition that assumes it "to be something that unproblematically connects individuals to society, with individuals who share some common trait thereby having an "identity as members of a particular group in society."4 Along this line of conception, identity is seen as resulting from "the shared possession of `norms' to the socially constructed, contested multiplicities of identity and is closely bound up with the forces of globalization.5
In the process of globalization in which Japan and ASEAN countries interact through the large flow of capital, technology, management know-how, information as well as cultural intersection through human contacts, there exist many channels through which shared norms can help strengthen a shared sense of identity. It is for this conference to identify the way towards building shared values that will lead to a sense of identity. The late Prime Minister had expressed his concern on this very issue and this should be a good start for the building of identity based on common values.
In this regard, it is noteworthy to quote the Noble Laureate Amartya Sen who said that the main hope for harmony in the world depends not on cultivating identities of uniqueness, but on fostering "plurality in our identity".6

1 Book Reviews by Rob Mackie of Craig, Timothy J. and Richard King, eds, Global Goes Local: Popular Culture in Asia, Vancouver : UBC Press, 2002, in Asia-Pacific News, p.2.
2 Ibid.
3 See William J. Klausner, Thai Culture in Transition, Bangkok (revised edition): The Siam Society, Bangkok, 2002
4 Lily Kong, "Globalisation, transmigration and the renegotiation of ethnic identity" in Kris Olds,, editors, Globalisation and the Asia Pacific (London:Roudledge, 1999), p.220.
5 Ibid.
6 Pana janviroj, Mukdawan Sakboon, "Laureate rejects civilisations clash", The Nation, December 12, 2002, p.1.

Luncheon Speech:"East Asia FTA as a Balancer to EU and FTAA"

Luncheon Speech

by TRINH Quang Thanh,
Director General, Institute for International Relations, Ministry of Foreign Affairs

Mr. Chairman,
Ladies and Gentlemen,

It is with great pleasure that I could attend the second Japan-ASEAN dialogue and talk about "East Asia FTA as a balancer to EU and FTAA". In this regard, I would like to make a couple of points.

1. As a matter of fact, moves on free trade agreements gain momentum in East Asia. Recent developments shown in the possibility of the setting up of free trade areas between China and ASEAN on one hand and Japan and ASEAN on the other have further consolidated the feasibility of an East Asia FTA. Several factors at play have contributed to the rising sense of a new economic regionalism:

Firstly, the global trend of forming strategic trading blocks is accelerating, given the success of the EU and NAFTA, as well as the two-year stalemate in WTO efforts to set up a global free-trade regime.

Secondly, momentum for this process is the institutionalization of the ASEAN Plus Three (APT) which began to take shape amid the regional financial and economic crisis in 1997-98. As the crisis was sweeping through the region, there arose the need for cooperation among the East Asian countries to deal with common uncertainties.

Thirdly, the formation of an East Asian FTA is seen as a natural development aimed at enhancing integration among East Asian countries. In terms of economics, East Asia constitutes one of the three centers of global economy, accounting for 23 per cent of the world's GDP, 20 percent of global trade volume. In addition, in the past decade, intra-regional trade increased from 24 per cent to more than 30 per cent of the entire trade of the region. While Europe has the EU to manage its economic enlargement and integration and the Americas is to form the FTAA in 2005, there has been no such institution in East Asia.

Finally, there is real economic benefit of an East Asia FTA. Study has shown that in its first year, a China-ASEAN FTA will increase ASEAN's GDP by 0.9 percent or by 5.4 billion US dollars while China's real GDP expands by 0.3 percent or by 2.2 billion US dollars in absolute terms. If an FTA covering the entire East Asia is to be formed, it will constitute the world's largest trading area, making up of 2 billion people or nearly a third of world population with a total GDP equivalent to that of the United States. China and the ASEAN countries will get easier access to FDI, technology and markets of Japan and other East Asian NIEs. At the same time, Japan and the Asian NIEs are in better position to tap China's huge markets and its low-cost labor force.

2. To my mind, there are both impetus and constraints in the process of forming a free trade area in East Asia. On the one hand, there is a growing sense of East Asian identity and community. Countries in the region share similar cultural norms, values and social structures. The Asia-Europe dialogue in the form of the ASEM Summit Meeting is also founded on the presupposition that there is some form of unity in East Asia.

What is now more important is that there is a strong political will to move towards the target. All countries in East Asia more or less understand that an integrated market would offset the economic challenges posed by the EU and NAFTA..

But on the other hand, East Asia encompasses vast markets with big gaps in the level of economic development.

Moreover, most of the economies in the region is a competitor to each other in terms of exporting products and attracting investment from overseas.

At present, East Asian countries trade more with outside countries and regions than with each other. Currently, EU's intra-regional trade accounts for more 60 per cent of its total trade. The figures are 45 per cent for FTAA and more than 30 per cent for East Asia. That is not to say that an East Asia FTA has only surface value, but it would take a long time before East Asian economies can play pivotal roles in each other's economies.

Last but not least, I share the view that in EU, the "Eurocrats" have played the driving force behind its economic integration and the EU enlargement. In the same manner, lawyers have played pivotal roles in involving complex negotiations towards the NAFTA and FTAA arrangements. In contrast, East Asia seems to lack leadership comparable to these bureaucrats or lawyers in drafting its trading arrangements. This might be explained from the Asian point of views that we still prefer the "Asian Way" of doing things informally rather than formally. Dynamism of economic integration in East Asia, therefore, tends to be a "bottom-up" process which is reactive rather than proactive, while in EU the process is "bottom-down".

3. Only the years to come can show whether East Asia FTA could be achieved in the distant or near future. Nevertheless, it is a beautiful dream. To make this beautiful dream become true, several issues have to be taken into considerations.

Given the everlasting debate on liberalism versus protectionism, the vision of East Asia FTA is now still at a crossroads. The question is whether it could be a stepping stone towards global liberalization or it could develop into a regional trading block? To me, on the one hand, the trend towards liberalization within regional cooperation groupings like ASEAN, APEC, NAFTA, MERCOSUR, etc., has ever been intensifying nowadays than any time in the past. But it should be noted that intra-regional trade liberalization in these groupings occurs at the time they are also involved in negotiations with external powers or other regional groupings on the formation of new FTAs which are greater in scale and deeper in process. In most cases, arrangements for these FTAs are in consistence with WTO arrangements. If this trend continues, it is only a matter of time before the world is fully liberalized in terms of trade.

But on the other hand, a pending East Asia FTA, as an economic powerhouse, might use its economic leverage to help balance and defuse any possible tension between the EU and FTAA at global level. At regional level, an East Asia FTA can also be served as a pilot project to help regional countries resist negative impacts brought about by waves of globalization and trade liberalization.

Our experiences have shown that while countries are moving towards trade liberalization, they are often impeded by "trivial" barriers such as the gap in economic development, new protectionism in the form of standardization of economic, environmental and labor policies, so on and so forth. Thus, in the transitional period towards a free-trade world, trading block like an East Asia FTA is still needed to protect the economic interests of regional countries against storms coming up from globalization or trade liberalization.

Let me conclude my remarks here by saying that this is the first time for ASEAN to embark on full-ledged talks on a free trade agreement with countries outside the region. Moves towards integrated market in East Asia require a long way of negotiations, talks, even studies, because market-opening is always a tough challenge, especially for developing economies like Vietnam. But we believe that in the end it will bring benefits to us all.

1. At the Sixth ASEAN Plus Three (APT) Summit held in Phnom Penh in November 2002, China agreed to enter full negotiations with ASEAN in 2003 on the setting up of the China-ASEAN FTA (CAFTA) in the next 10 to 15 years. Meanwhile, Japan and ASEAN also signed a joint declaration calling for the realization of a comprehensive economic partnership, including FTAs on bilateral and multilateral basis, within ten years.

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6. An Introduction to ASEAN-ISIS

ASEAN-ISIS (ASEAN Institute of Strategic and International Studies) is an association of non-governmental organizations registered with the Association of Southeast Asian Nations. Formed in 1988, its founding membership comprises the Centre for Strategic and International Studies (CSIS) of Indonesia, the Institute of Strategic and International Studies (ISIS) of Malaysia, the Institute of Strategic and Development Studies (ISDS) of the Philippines, the Singapore Institute of International Affairs (SIIA), and the Institute of Security and International Studies (ISIS) of Thailand. Its purpose is to encourage cooperation and coordination of activities among policy-oriented. ASEAN scholars and analysts, and to promote policy-oriented studies of, and exchanges of information and viewpoints on, various strategic and international issues affecting Southeast Asia's and ASEAN's peace, security and well-being.

ASEAN-ISIS now consists of 9 members: CSIS Indonesia, ISIS Malaysia, ISDS Philippines, SIIA Singapore, ISIS Thailand, Brunei Darussalam Institute of Policy and Strategic Studies (BDIPSS), Cambodian Institute for Cooperation & Peace (CICP), Institute for International Relations (IIR) Vietnam, and Institute of Foreign Affairs (IFA) Lao People's Democratic Republic.

ASEAN-ISIS also succeeded in obtaining recognition from the ASEAN member states as a valuable mechanism for policy making by institutionalizing the meeting between the Heads of ASEAN-ISIS and the ASEAN Senior Officials since ASEAN Senior Official Meeting (SOM) in Singapore in 1993. In addition to its recognition, ASEAN-ISIS has also contributed significantly to the emergence of an important regional and international political process-that of track two diplomacy.

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7. An Introduction to ASEAN-Japan Exchange Year 2003

Outline of the "ASEAN-Japan Exchange Year 2003"

1. Background and rationales
Prime Minister Junichiro Koizumi proposed to designate the year 2003 as the "ASEAN-Japan Exchange Year" during his visit to Southeast Asian countries last January. This proposal was intended to put into action several recommendations of the final report of "Vision 2020: ASEAN-Japan Consultation Conference on the Hanoi Plan of Action." On this score, the proposal is not simply Japan's initiative, but is an ASEAN-Japan initiative.
Exchange programmes and activities would not only contribute to deepening mutual understanding between ASEAN and Japan, but would also bring about substantive benefits for ASEAN and Japan as they should galvanise their economies, which have been suffering since the Asian financial crisis in 1997 and 1998. For these reasons, the exchange programmes should include not only artistic performances and exhibitions, but also sending trade and investment missions, activating tourism, providing opportunities for experts to assemble and discuss the need for creating a number of new institutions in various economic, political and social fields.

2. Exchange Programmes and Activities
(1) A variety of exchange programmes and activities will be organised and conducted at various levels, and in a wide range of areas and circles, such as politics, industries, education, science and technology, and culture.
(2) Exchange programmes and activities will be planned, organised and put into action in Japan, in each individual country of ASEAN and/or by ASEAN as a group, and in good co-operation at either bilateral, plurilateral or regional level.
(3) The following are examples of illustrative forms of exchange activities, which would serve to build a Japan-ASEAN partnership, "acting together and advancing together."
-- dialogues, consultations or collaborations among industrialists, intellectuals, professionals or experts, intended to find paths to strengthen Japan- ASEAN ties in the new age;
-- exchanges of professors and teachers or young people, expected to serve for the co-operation in human resource developments;
-- cultural and artistic exchange activities, which will promote mutual understanding.
(4) Active participation of the private sector, local governments, and the ASEAN-Japan Centre and their full involvement in such activities will be indispensable. Various personal exchange programmes, research collaborations and cultural exchanges activities to be conducted in the private sector and by local governments will be promoted and incorporated so that they will form part of the whole ASEAN-Japan Exchange Year activities.

3. Modalities of Operating the Exchange Year Programmes

(1) To conduct exchange activities through the year 2003 with the participation of all the countries, Japan and ten ASEAN members, each of the ten ASEAN countries and Japan is designated as a key co-ordinator in each month of 2003. The role of the key co-ordinator country is to plan and organise a series of exchange activities in its country, inviting the participation of the other countries. The other countries should actively co-operate in such exchange activities organised under the leadership of the key co-ordinator country in a particular month in, for instance, sending business people, intellectuals, experts, artists, etc., or involving its Chamber of Commerce in such exchanges. Certainly, this does not in any way exclude cases where any such activities could also be conducted in the countries other than the key co-ordinator country of the month. The following are key co-ordinator countries in each month of 2003.
AprilThailand / Japan
MayBrunei Darussalam
AugustLao PDR
DecemberThailand / Japan

(2) In proceeding the works of the Exchange Year, each country has designated a contact points for sharing information among Japan and ASEAN countries.
(3) The leaders formally declared the initiative of the Exchange Year 2003 at the ASEAN+Japan Summit Meeting in Phnom Penh on November 5.
(4) Apart from the month in which any key co-ordinator country bears its responsibility, December, when the Japan-ASEAN Commemorative Summit Meeting is to be held in Japan, is designated as the "Month for Joint ASEAN Activities in Japan"