ROAD TO ASEAN-l0. Japanese Perspectives on Economic Integration.

ROAD TO ASEAN-l0. Japanese Perspectives on Economic Integration. Edited by Sekiguchi Sueo and Noda Makoto. New York: Japan Center for International Exchange (distributed outside Japan by the Brookings Institution Press, Washington, D.C.). 2000. xiv. 224 pp. (Graphs, tables, charts.) US$25.00. paper ISBN 4-88907-033-8.

This book is the result of a special study group of Japanese economists and political scientists who came together to examine the prospects brought about by enlarging the ASEAN (Association of Southeast Asian Naions) group to 10 countries and a potential market of 480 million people. There is an emphasis throughout this volume upon economic issues, such as trade and foreign investment, as well as political concerns, such as the role of NGOs (non-governmental organizations) and ASEAN's relationship with APEC (the Asia Pacific Economic Cooperation Forum group of counries).

The study group leader Sueo Sekiguchi sets the scene in an introductory chapter that charts the evoluation of ASEAN from a group of just five countries in 1967 (Thailand, Singapore, the Philippines, Indonesia and Malaysia), established to counter the political influence of communist countries such as China and North Vietnam, to an emphasis on economic cooperation as the threat of communism faded. Brunei joined in 1984. Vietnam joined in 1995. Laos and Myanmar (formerly Burma) joined in 1997, and Cambodia joined in 1999. Besides the graudual expansion of ASEAN and the prospects of 'one Southeast Asia', the 1990s also brought changes to ASEAN's role as a regional community through the move towards economic integration and the plan to create a single free trade area in the area through AFTA (the ASEAN Free Trade Association). Indeed, some pundits have pronounced that an Asian trade bloc will be realized soon, one which will take over the role of the wider pan-Pacific APEC. Sekiguchi, however, notes that while t he expanded ASEAN has a substantial population, to date it does not constitute in any sense a unified market. Sekiguchi finds that the enlarged ASEAN group has certainly increased its bargaining position of individual countries viz a viz the rest of the world. However, despite the rhetoric of AFTA and regional free trade, in reality member countries continue to find ways to protect their domestic industries, such as automobile assembly and local parts production, thus reducing potential efficiency gains brought about through specialization and exchange. He concludes that by itself AFTA may have little real impact on expanding trade between ASEAN countries, and also may not in fact attract much extra foreign investment from outside.

Other aspects of intra-ASEAN trade and also foreign investment are reviewed in two chapters authored by Junko Takeuchi, an economist from the Sakura Bank. She notes that the driving force behind the expansion of intra-regional trade in recent years have been the electronics industry. This sector has attracted large amounts of foreign investment and has proven to be highly suitable to a regional division of labour, aided by the export promotion policies adopted by each ASEAN member country. In this case it is the corporate investment and trade strategies of multinational companies, many of which of course are from Japan, that have accounted for most of the intra-regional growth in trade. She also points to the threat posed by the rise of China, which has also followed the ASEAN example of accepting foreign investment in order to achieve rapid industrialization. Over the next decade or so, she predicts that the expanded ASEAN group is likely to compete head to head with China in attracting further rounds of di rect foreign investment in factory developments from foreign multinations.

The remainder of the chapters focus on capital flows between ASEAN countries, the specific implications of including Vietnam, Myanmar and Cambodia, as well as regional security implications and relationships with other Asian powers. In all, this collection provides very useful material updated to the end of 1999 on the evolution of the expanded ASEAN and the many ramifications of these events during the last 10 years. It will be welcomed by all researchers interested in economic and political change in Southeast Asia.