East Asian architecture of integration

The evolution of the architecture in which East Asian economic integration is the topic of this chapter. Initially integration was led by trade and investment flows that were the result of decision making in markets. These included the development of production networks, later referred to as global value chains. China also contributed to regional integration, especially after its entry to the WTO in 2001. The region then developed more formal frameworks for integration, starting with agreements in ASEAN and then adding agreements with ASEAN’s major trading partners. These agreements continue to evolve, depending on the interests of the participants. The result is a lower degree of consistency among agreements, and also a lesser degree of the establishment of institutions compared to those in Europe and North America. APEC plays an important role in this context of providing a set of principles and reference points for the more formal arrangements. APEC has also cemented the importance of the ‘third pillar’ of capacity building alongside liberalisation and facilitation, and the commitment to open regionalism, in which openness with the rest of the world is pursued at the same time as barriers to trade within the region were reduced. The East Asian approach has provided strong support for integration, both internally and with the rest of the world and in the context of the debates about integration in the Britain and the US, that the East Asian model has a degree of resilience. To the question of what happens next, in the context of the US withdrawal from leadership of multilateralism, the East Asian model has shown its capacity to respond to pressures and to innovate. Examples are the adoption of the CPTPP and the progress on RCEP, and the latter in particular offers the potential for a deeper integration with South Asia, the next key frontier for East Asia. The East Asian architecture, based on the leadership of middle powers, will provide a framework in which all the relatively small members can manage their relationships with China, a challenge which is heightened by the US withdrawal.