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This paper identifies four specific challenges that New Zealand must tackle as it seeks to strengthen its future relations with Asian countries.
To play our part fully in the region we will need to be included in the new regional structures that are being put in place.
The formation of ASEAN (Association of Southeast Asian Nations) in 1967 marked the first steps in regional institution building. During what were uncertain times, ASEAN emphasised consensus and non-interference in one another’s internal affairs, and its most notable early achievement was to advance regional peace and stability whilst avoiding conflict.
Preoccupations for ASEAN have included expansion to include members at very
different stages of development, the unsettling effects of the 1997/98 financial
crisis, and regime change in its largest member, Indonesia. In recent years it has
focused on strengthening commitments to regional integration, and aims to build
an ASEAN Community by 2015 based on full co-operation in security, economic and
socio-cultural affairs. ASEAN is considering how it might update its vision and
guiding principles through the adoption of an ASEAN Charter.top of page
After much debate about an East Asia caucus, an “ASEAN+3” arrangement emerged in 1997, which combined ASEAN with China, Japan and Korea in work programmes paralleling ASEAN’s. High-level summits have been held annually. The financial crisis highlighted the need for closer regional co-operation, especially in economic policy. Financial and economic co-operation has been ASEAN+3’s main focus to date.
At Vientiane in 2004 ASEAN decided to convene an East Asia Summit (EAS), a decision endorsed by ASEAN+3. Leaders agreed that the EAS should be an open, inclusive and outward-looking forum, setting three criteria for membership: existing dialogue partner status with ASEAN, accession to the Treaty of Amity and Co-operation, and substantial relations with ASEAN. New Zealand, Australia and India accordingly received invitations to join, and did so.
The first EAS (Kuala Lumpur, 2005) agreed that the grouping – as a leaders-led summit for strategic discussions of regional issues – was an integral part of the evolving regional architecture. Chaired by ASEAN, it would meet annually. Its second summit in Cebu adopted a work programme for the year ahead, focusing on energy, economic and fi nancial co-operation, avian influenza and disaster management.top of page
Asia Pacific Economic Co-operation (APEC), dating back to 1989, is more broadly based, drawing together 21 members not only from Asia but also from right around the Pacific Rim. Its aim is to establish “a community of Asia Pacific economies”. Leaders value its summits, and its trade facilitation efforts enjoy wide support. APEC, however, faces tests as the 2010 deadline for trade liberalisation by developed members (2020 for others) looms. The diffi culties experienced by the World Trade Organisation in reaching consensus on further trade liberalisation have lent new impetus to APEC and trade negotiations at a regional level.
New Zealand recently assumed the role of Chair of APEC’s Economic Committee, one of APEC’s key committees. The Economic Committee has a mandate to develop a behind-the-border structural reform programme for APEC, and New Zealand is emphasising a greater policy-oriented focus. This refl ects our view that the Committee has potential as a forum for regional economic policy dialogue.
A network of preferential trading arrangements is emerging, criss-crossing the Asia Pacific region. This phenomenon is explained partly by frustration over the slow pace of multilateral trade liberalisation but it is also a defensive strategy to protect market positions from competitors. Within a few years there will be nearly 40 regional trade agreements. Yet many do not have guarantees of comprehensiveness, either in participation or in sectoral coverage. The Asian Development Bank has warned against agreements that could complicate commerce through restrictive rules of origin. That said, comprehensive high-quality FTAs with Asian partners give New Zealand a better chance to connect and compete.
The creation of new regional mechanisms, the adaptation of existing ones, and the setting of new targets and ambitions all refl ect the fl ux and uncertainty of these times. What is clear is that the regional architecture is developing with a rapidity that offers both opportunities and risks for New Zealand. ASEAN itself is hoping to improve its options by hastening regional integration and engaging more closely with Japan, China and Korea, and with India, Australia and New Zealand.
Other Asian countries also seek to manage relationships through these evolving
regional arrangements and have been content for ASEAN to take an active role.
There is an inclination towards greater economic integration. Within the EAS, Japan
has proposed a Comprehensive Economic Partnership for East Asia (CEPEA). EAS
leaders in Cebu agreed that a study on this proposal should go forward, and two
meetings of the study group have since been held (New Zealand hosted the second
of these meetings). In a parallel process, an ASEAN+3 FTA is under study. Some APEC
members have promoted a Free Trade Area of the Asia Pacific; this will also be the
subject of a study.
Some countries in the region favour ASEAN+3 as the vehicle for building an East Asian community. But trade and investment dynamics, India’s advance, and Australia and New Zealand’s growing connections with Asia argue for a broader concept of the Asian region than simple geography.
If we want to take part in the institutional changes taking place in the region,
New Zealand must continue to develop positive relationships and make contributions
to regional affairs that underpin our participation. It is not enough that we value
highly our connections with Asia; it is important that the countries of Asia value
New Zealand participation in regional dialogues and in efforts to build the ASEAN
and East Asian community.top of page
New Zealand has a major stake in assisting the region to manage economic risks. It does this through contributing to APEC and other processes that aim to strengthen economic policy-making and governance.
The Reserve Bank of New Zealand engages actively with Asia’s central banks, bilaterally and collectively through the Executives’ Meeting of East Asia Pacific banks (EMEAP). This group works to strengthen regional co-operation, including the operation of financial markets and the regulation of banks and other fi nancial institutions. EMEAP launched two Asia Bond Fund initiatives, in 2003 and 2005, with New Zealand participation. It is currently considering forms of closer financial integration, and New Zealand’s high level of commitment and involvement means that we are well placed to shape future directions. There is also scope to increase our technical and capacity-building assistance to individual countries, for example, in the areas of financial market regulatory change and tax reform.
...New Zealand should demonstrate that we have qualities and assets which the region values, and then communicate and act on these...
In meeting this challenge of “better integrating ourselves into an integrating region”, New Zealand’s response should be to demonstrate that we have qualities and assets which the region values, and then to communicate and act on them.
Our assets include:
These assets, if recognised by others in the region, will define the value of New Zealand as a bilateral partner to individual countries and as a participant in regional processes.
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