Evolution of ASEAN-Japan Relations 9789812307026

Table of contents :
Contents
About the Author
Introduction
1. ASEAN Meets Japan
2. The Fukuda Doctrine Phase: 1977–86
3. The Takeshita Doctrine Phase: 1987–96
4. The Hashimoto Doctrine Phase: 1997–2003
5. ASEAN+3: A New Phase?
Conclusions
Selected References

Citation preview

Chapter 1

Evolution of ASEAN-Japan Relations

The Institute of Southeast Asian Studies (ISEAS) was established as an autonomous organization in 1968. It is a regional centre dedicated to the study of socio-political, security and economic trends and developments in Southeast Asia and its wider geostrategic and economic environment. ISEAS Publications, an established academic press, has issued more than 1,000 books and journals. It is the largest scholarly publisher of research about Southeast Asia from within the region. ISEAS Publications works with many other academic and trade publishers and distributors to disseminate important research and analyses from and about Southeast Asia to the rest of the world. The Southeast Asia Background Series is a major component of the Public Outreach objective of ISEAS in promoting a better awareness among the general public about trends and developments in Southeast Asia. The books published in the Southeast Asia Background Series are made possible by a generous grant from the K S Sandhu Memorial Fund.

Southeast Asia Background Series No. 6

Evolution of ASEAN-Japan Relations

Sueo Sudo

INSTITUTE OF SOUTHEAST ASIAN STUDIES Singapore

First published in Singapore in 2005 by ISEAS Publications Institute of Southeast Asian Studies 30 Heng Mui Keng Terrace, Pasir Panjang Singapore 119614 E-mail: [email protected]

• Website: bookshop.iseas.edu.sg

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the Institute of Southeast Asian Studies. © 2005 Institute of Southeast Asian Studies, Singapore The responsibility for facts and opinions in this publication rests exclusively with the author and his interpretations do not necessarily reflect the views or the policy of the publisher or its supporters.

ISEAS Library Cataloguing-in-Publication Data Sudo, Sueo. Evolution of ASEAN-Japan relations. (Southeast Asia background series) 1. Asia, Southeastern—Foreign relations—Japan. 2. Japan—Foreign relations—Asia, Southeastern. 3. Japan—Foreign relations—1945I. Title. II. Series DS525.9 J3S941 2005 ISBN 981-230-281-6 Typeset by International Typesetters Pte Ltd. Printed in Singapore by Utopia Press Pte Ltd.

Contents About the Author

vi

Introduction

1

1

ASEAN Meets Japan

5

2

The Fukuda Doctrine Phase: 1977–86

11

3

The Takeshita Doctrine Phase: 1987–96

21

4

The Hashimoto Doctrine Phase: 1997–2003

35

5

ASEAN+3: A New Phase?

53

Conclusions

61

Selected References

65

About the Author Sueo Sudo is Professor of International Relations and Director of the Center for Asian Studies at Nanzan University, Nagoya Japan. His research interests are ASEAN, Japanese foreign policy and Japan-Southeast Asian relations. Major publications are The Fukuda Doctrine and ASEAN (1992) and The International Relations of Japan and Southeast Asia (2002).

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Introduction

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Chapter 1

Introduction Known to the Japanese as Nanyo (Southern Sea), Southeast Asia was historically regarded as a resource-rich and relatively developed area. It was because of these geo-economic factors that many Japanese traders and merchants as well as female labourers peacefully crossed the South China Sea. During the Meiji Restoration from the 1860s to the early 20th century, however, a modern Japan began to pursue another course by vigorously engaging in an expanded foreign policy under the slogan “Rich Nation, Strong Army”. Thus, Japan, a latecomer to colonialism, sought to enter the international system through a series of wars and occupations of foreign territories such as Taiwan, Korea, Manchuria, and much of Southeast Asia. As an extension of its expansionist foreign policy, many Japanese unrealistically believed that an Imperial Japan would be able to reign over the entire Asian region; that is, they held the illusory hope for a Greater East Asian Co-Prosperity Sphere. Once bitterly colonized and exploited, Southeast Asia has become an integral part of Japan’s foreign policy again, albeit peacefully, and Japan’s relationships with the region loom increasingly large today. As Table 1 below amply suggests, Southeast Asia-Japan economic relations have developed remarkably since 1967. From initial war reparations payments of US$1.5 billion between 1955 and 1977, Japan’s economic relations with Southeast Asia grew to US$1.7 billion in aid, 1

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Evolution of ASEAN-Japan Relations

TABLE 1 ASEAN-Japan Economic Relations (US$ million)

1967 1977 1987 1997 2002

ODA

Investment

Trade

180 269 1,679 1,351 1,747

74 636 1,524 7,831 4,269

2,209 15,730 35,153 120,689 108,865

Note: ODA is Official Development Assistance

US$4.2 billion in investment and US$108.8 billion in trade 2002. Similarly, Southeast Asia approaches Japan as an important source for development and a viable regional partner. Although contentious interpretations of the asymmetrical relationship still remain, the Association of Southeast Asian Nations (ASEAN) and Japan could play a crucial role in forging a stable and prosperous East Asia. How has that unique relationship developed over time? What are the problems and obstacles to be tackled in order to further improve relations? Most importantly, where might ASEAN-Japan relations be heading? In order to answer these questions, it is necessary to delve into the interactions between ASEAN and Japan over the past three decades, in the process of which certain unique features of the relationship will be identified. The most striking of these is that ASEAN-Japan relations have become highly institutionalized with a de rigueur visit to the region by Japan’s top leaders. There have been three milestones in the relationship: the Fukuda Doctrine of 1977, the Takeshita Doctrine of 1989, and the Hashimoto Doctrine of 1997. Why were there major developments accentuated by policy announcements in these years? All three took place during ASEAN’s transitional years, but also at turning points in Southeast Asian international relations, to which Japan was obliged to respond. Thus, by tracing

Introduction

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the three phases of ASEAN-Japan relations, we will be able to assess the potential and limitations of the partnership in the 21st century.

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Evolution of ASEAN-Japan Relations

Introduction

5

Chapter 1

ASEAN Meets Japan Postwar relationships between Southeast Asia and Japan began in the early 1950s when Japan regained its sovereignty and embarked on war reparations negotiations with Burma (Myanmar), the Philippines, Indonesia and South Vietnam while offering “economic assistance” to other Southeast Asian countries. The nature of Japan’s reparations, however, was largely influenced by “economic diplomacy” driven by the Yoshida Doctrine. Although supported by the United States, this economic policy towards Southeast Asia was contentious. In other words, in terms of the total amount and its contents, the reparations settlements were far from satisfactory to the Southeast Asian recipients. Later, in the midst of the Vietnam War, five Southeast Asian countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) announced the Bangkok Declaration (the ASEAN Declaration) on 8 August 1967. It was the first indigenous regional organization where five countries as a group decided to put their region in order. When ASEAN was launched, the Japanese government reacted favourably, regarding its formation as an affirmation of growing Southeast Asian regionalism, and thereby also giving tacit encouragement to Tokyo’s regional development strategy. Since Japan’s pursuit of economic diplomacy was contingent on a favourable 5

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trading environment, a unified resource-rich Southeast Asia was quite attractive. Within the framework of the Conference of Economic Development in Southeast Asia initiated by the Japanese government in 1966, the Sato regime in Tokyo played a part in consolidating American Cold War strategy in the region. However, ASEAN’s credibility as a viable institution at this stage was tainted by many intra-regional problems, most notably the Philippine claims on Sabah. Although Malaysia and the Philippines withdrew their diplomatic representatives from each other’s capitals in late November 1968, they stopped short of dismissing the utility of ASEAN. Through these intra-regional problems ASEAN sought to further strengthen its basis for regional cooperation. At the same time, major developments had been occurring in the international environment, such as the announcement in January 1968 of an accelerated withdrawal of British forces east of the Suez and the Nixon Doctrine in July 1969, which considerably enhanced the value of ASEAN as a vehicle for political cooperation. This new situation was viewed by ASEAN as a chance to shape a new pattern of international relationships in the region. As a result, Malaysia proposed the neutralization of Southeast Asia in order to exclude the disruptive effects of major power intervention and competition. After some major changes, the Malaysian proposal became the Zone of Peace, Freedom and Neutrality (ZOPFAN) adopted by ASEAN in November 1971. Japan’s attitude toward ASEAN turned negative in the early 1970s. ZOPFAN had an adverse impact on Japanese foreign policy because Tokyo was wary about supporting an organization that embodied neutrality. Moreover, two issues awaited Japan’s swift response: anti-Japanese movements and ASEAN’s request for resolving trade frictions.

Introduction ASEAN Meets Japan

7

Anti-Japanese Movements Japan’s economic diplomacy towards resource-rich Southeast Asia had been a major success due mainly to Japan-US economic cooperation. As a result of Japan’s rapid economic penetration into the Southeast Asian region, however, ASEAN began to feel that joint negotiations with Tokyo were necessary, reflecting the growing fear of and resistance to Japan’s economic domination in several countries in Southeast Asia, exemplified by a boycott of Japanese goods in Thailand 1972 and Malaysia’s later criticism of Japanese production and export of synthetic rubber. With the apparent change in American policy towards China and Vietnam, Southeast Asian countries were having second thoughts on America’s “junior partner” and its role in the region. Sensing that the situation in Southeast Asia was critical, Prime Minister Kakuei Tanaka contemplated rather hastily five principles for addressing the problems: (1) promotion of good neighbourly relations with the Southeast Asian countries; (2) respect for the independence of these countries; (3) promotion of mutual understanding; (4) contribution to the economic development of these countries without disturbing their economic independence; and (5) respect for voluntary regional cooperation among these countries. However, the 1973 oil crisis compelled Japan to pursue a more aggressive resource policy, which exerted a negative impact on resource-rich countries, including those in Southeast Asia. Thus, when Prime Minister Tanaka visited Southeast Asia in January 1974, unprecedented anti-Japanese demonstrations took place throughout much of the region. In particular, these demonstrations escalated into violent riots in Bangkok and Jakarta. Since Indonesia was the last stop of Tanaka’s Southeast Asian tour (it was not termed an ASEAN tour) as well as Japan’s

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Evolution of ASEAN-Japan Relations

most important trading partner in the region, this incident resulted in giving the Tanaka tour a very negative image both inside and outside Japan. Within two decades after reentering the region’s economy, Tokyo had to confront the consequences of its pursuit of economic gain without regard to political considerations. To be sure, this was seen in Japan as a blow to the economic diplomacy formulated mainly by the Ministry of Industry and International Trade (MITI).

Initiation of ASEAN-Japan Relations in November 1973 Without doubt, ASEAN-Japan negotiations over synthetic rubber had a major impact on Japan’s regional policy. Japan’s synthetic rubber industry posed a threat to the exports of natural rubber which were key earners in several Southeast Asian economies. The negotiations began with the Sixth ASEAN Foreign Ministers’ Meeting held in April 1973 in Pattaya, Thailand, where the Malaysian delegation led by Deputy Prime Minister Tun Ismail presented its position paper against “the indiscriminate expansion of the synthetic rubber industry by Japan”, which was adopted by the delegates. In August 1973, ASEAN issued an aide-mémoire to Japanese envoys in the ASEAN capitals and, after a two-day meeting of senior officials, agreed to take collective action on behalf of the Association against the expansion of Japanese synthetic rubber exports. In response to the ASEAN request, the Japanese government agreed to participate in a formal dialogue in order to resolve the issue, hence the initiation of direct contacts. Responding to ASEAN’s pressing demands, Japan agreed to establish the ASEAN-Japan Forum on Rubber in November 1973. Then, at the second official meeting in March 1974, Japan agreed to guarantee that its synthetic rubber production would not

Introduction ASEAN Meets Japan

9

adversely affect natural rubber production. In July 1975, furthermore, Japan agreed to offer its economic and technical assistance. As such, the rubber problem was resolved in practical terms due to the establishment of the forum. At the same time, the Federation of Economic Organizations (Keidanren) announced a code of conduct for Japanese firms in the region, including: (1) long-term investment for the benefit of both parties; (2) promotion of business activities based on mutual trust; (3) contribution to local industrialization; (4) promotion of re-investment; and (5) cooperation and harmonization with the recipient countries. Why did Japan concede and agree to incorporate ASEAN in its foreign policy agenda at this moment? There are three main reasons. First, the 1973 oil crisis was affecting synthetic rubber production, while at the same time production costs were rising. Second, Japan was given notice as to complaints by some ASEAN countries regarding their unbalanced trade relations with Japan. Third, Japan was trying to avoid any collision with Indonesia because the country was becoming a major oil supplier to Japan. In this respect, it was symbolic that the most threatening antiJapanese demonstrations, whatever their catalyst, were during Prime Minister Tanaka’s visit to Jakarta in January 1974. Furthermore, with the end of the Vietnam War in 1975, ASEAN faced new challenges. The most urgent was how to deal with the new communist regimes in Indochina while consolidating their regional policies. Thus, the first ASEAN summit was convened in Bali in February 1976, which produced two important documents: the Treaty of Amity and Cooperation in Southeast Asia and the Declaration of ASEAN Concord. Strengthening the institutional foundation for regional cooperation, ASEAN sought to further dialogue partnerships with external powers.

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The changing Southeast Asian power configuration — especially caused by the end of the Vietnam War and the revitalization of ASEAN through the Bali Summit — had a major impact on the Japanese government. A new ASEAN emphasis on economic cooperation within the region and with outside major powers was now conceivable. With the end of the Vietnam War, the regional structure that had sustained the mechanism of the Cold War in Southeast Asia was seriously weakened, if not in a state of collapse. In particular, the absence of a dominant American presence in Southeast Asia compelled Tokyo to formulate a new framework of regional order. A new set of diplomatic principles was needed because Japan’s previous policy towards the region, based upon a combination of economic assistance to individual countries and strong American security commitments, had become untenable. ASEAN’s needs and Japan’s quest for change converged in 1977.

Introduction

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Chapter 2

The Fukuda Doctrine Phase: 1977–86 The election of a new prime minister on 23 December 1976 was the beginning of Japan’s new Southeast Asian policy with its special emphasis on ASEAN. As a strong Liberal Democratic Party (LDP) leader, but one who also had personal relationships with many top ASEAN leaders, Prime Minister Takeo Fukuda was highly esteemed by government officials as well as by Southeast Asian leaders. ASEAN needed a strong push at the start of its second decade in 1977. Recognizing favourable signals from ASEAN leaders, Fukuda, upon establishing his Cabinet, expressed readiness to promote an Asia-centred diplomacy. Unlike his predecessors, Prime Minister Fukuda came into office with clearly defined domestic and foreign policy objectives. His external policies could be epitomized by his support for three concepts: first, Japan’s unprecedented experiment as a great economic power without military power; second, the interdependent world community and Japan’s responsibility to it; and third, a sense of the world economic crisis and Japan’s ability to contribute to world economic recovery and toward solving North–South problems. Of the three, the first had been a long-cherished policy objective since Fukuda’s days as Foreign Minister. 11

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To make these ideas official policy, Prime Minister Fukuda had to announce them at the right occasion and at the right place. Unlike previous premiers, Fukuda’s foreign policy staff, mainly Hisashi Owada, Yosuke Nakae, Tokehiko Nishiyama, were eager to initiate a new diplomatic discourse. To these policymakers, Fukuda’s involvement in Southeast Asia was substantial partly because his former factional leader, Nobusuke Kishi, had cultivated unofficial channels through Japan’s war reparation payments. Having developed personal relationships with Southeast Asian leaders before becoming Prime Minister, Fukuda responded favourably to those leaders’ high hopes for his premiership. Another aspect of Fukuda’s overtures was cultural, as he was involved in setting up the Japan Foundation in 1972. Since then he had been advocating new cultural relations with Southeast Asia, emphasizing Japan’s role as a non-military actor and the need to construct better relations based on mutual trust and a better understanding of each other’s cultures. The first Doctrine in Japanese foreign policy was undertaken rather quickly, for all those involved in the process held one view in common: that existing policy toward Southeast Asia was not working. There were three reasons for this conclusion. First, the anti-Japanese movement in 1974 was a decisive counterblow to Japan’s resource-based diplomacy. Second, the end of the Vietnam War in 1975 and American withdrawal from the region necessitated Japan’s reappraisal of its policy orientation, which had always followed the dictates of the United States. In other words, the power vacuum in Southeast Asia required a new role for Japan in the region. Third, and in relation to the second, ASEAN as a regional organization was becoming a full-fledged actor, exemplified by its first Summit in 1976, and expected strong Japanese support, especially

Introduction The Fukuda Doctrine Phase: 1977–86

13

economically. Specific commitments, not vague promises, were demanded by ASEAN in the field of regional economic development. All these factors, including the Tanaka riots, the power vacuum and ASEAN’s demands, provided Japanese policymakers with a unique opportunity to initiate a new Southeast Asia policy. In many respects, therefore, the meeting between the Japanese Prime Minister and the heads of the ASEAN countries was all the more significant because it was the first such meeting in the entire postwar period, and only the second since the Greater East Asian Conference held in Tokyo in 1943. However, throughout the talks at the Summit, and with individual countries afterward, the Japanese delegation recognized that there still existed a sense of suspicion on the part of ASEAN countries, and because of this, as well as the newspaper leaks of the Doctrine, the Manila Speech was rewritten on 15 August 1975, which resulted in the following three principles: • •

•

Japan rejects the role of a military power and is resolved to contribute to the peace and prosperity of Southeast Asia; Japan will do its best for consolidating the relationship of mutual confidence and trust based on “heart-to-heart” understanding; Japan will be an equal partner of ASEAN and its member countries, and cooperate positively with them in their own efforts, while aiming at fostering a relationship based on mutual understanding with the nations of Indochina, and will thus contribute to the building of peace and prosperity throughout Southeast Asia. In retrospect, Fukuda explains: As a Japanese politician, who had been concerned with Southeast Asia for a long time, I have had a determined

14

Evolution of ASEAN-Japan Relations objective at the time of my Southeast Asian visit. That was to forge a closer friendship between Japan and ASEAN, and to reconstruct a new rationale of international relations. I feel that the Fukuda Doctrine is still now alive steadfastly in the region.

It was envisaged that a policy of cultural promotion would compensate for economically skewed relations. Advocating a political role was the most challenging policy, and it was also the best solution in terms of the power vacuum that existed in the region. As part of this policy, the establishment of a “special” relationship with ASEAN was crucial in furthering Japan’s own interests. The next step was to be consistent in efforts to implement the proclaimed policy. The year 1978 may be called “ASEAN year”, because ASEAN became a focus of international diplomatic activity, with various leaders visiting the region, among them, American Vice President Walter Mondale, Soviet Deputy Foreign Minister Nikolai Firyupin, and Chinese Vice President Deng Xiaoping. Japan’s political initiative in taking ASEAN seriously was clearly being emulated by other big powers. Following Fukuda’s footsteps, Prime Minister Zenko Suzuki visited the region (Indonesia, Malaysia, the Philippines, Singapore and Thailand) in his first overseas trip in January 1981. Like Fukuda, Suzuki made a major speech in Bangkok, which stressed the following points: • •

•

Japan will not play a military role in the international community; Japan will play a political role to help maintain world peace, commensurate with Japan’s status in the community of nations; and Japan will stress four areas in its economic cooperation policy, such as rural development, energy resources, human resources, and small and medium-sized enterprises.

Introduction The Fukuda Doctrine Phase: 1977–86

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Significantly, it was unprecedented that Japan’s leader visited Southeast Asia before meeting with his American counterpart. Only two years later, in April to May 1983, Prime Minister Yasuhiro Nakasone paid a visit to the ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) again. In promoting a relationship of mutual trust between the two parties, Nakasone announced three proposals: •

• •

A 50 per cent increase in the ceiling of quotas under the preferential scheme for ASEAN industrial products starting in 1984; Reactivation of a programme for Japan to assist ASEAN enterprises in plan renovation; and An invitation to 150 ASEAN youths to visit Japan every year for a short stay and the launching of Japan-ASEAN scientific and technological cooperation.

Thus, offering new commitments to the region, the momentum generated by the Fukuda Doctrine was maintained. Soon after the visit, however, Nakasone was preoccupied with economic problems as a result of mounting pressure from the United States and Europe. The announcement of the Action Program in July 1985 was a case in point. Stressing Japan’s new self-image as a member of the West, Nakasone showed strong leadership in resolving economic friction with the West. This initiative, however, resulted in the “benign neglect” of his ASEAN policy, as underscored by a declining trend in trade and investment. It was unfortunate that Japan’s “benign neglect” coincided with ASEAN suddenly feeling vulnerable, faced with the worst economic stagnation in its history. During the first phase, nevertheless, ASEAN-Japan relations had been remarkably upgraded, as seen in the rapid institutionalization of the relationship in the ASEAN-Japan

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Forum, ASEAN-Japan Foreign Ministers’ Meeting, and ASEANJapan Economic Ministers’ Meeting.

ASEAN-Japan Forum since 1977 Although ASEAN launched its first forum with Japan in November 1973 to address the problems of the rubber trade, it was only in March 1977 that the current ASEAN-Japan Forum (AJF) was established, a decision that was influenced by Fukuda’s dramatic visit to the region. Unlike the previous Forum’s inclination towards negotiation, the first two meetings of the new Forum were to lay the foundation for the discussion of economic and cultural cooperation between ASEAN and Japan. The goals of the inaugural forum in March 1977 were threefold, namely, to formulate decisions based on the areas of cooperation between ASEAN and Japan; to review and monitor the progress of such cooperation; and to recommend measures that would expand cooperation. The second AJF was held in Tokyo in October, soon after Fukuda’s visit to the region. At that meeting, both sides discussed three specific areas of trade, economics and culture and agreed that there would be a continuous examination of other areas of mutual benefit within the framework of expanded cooperation. Yet, there was no major agreement on these three areas of cooperation, an outcome deplored by one Japanese official as undermining Japanese credibility in responding earnestly to ASEAN demands. As a Japanese official lamented, Japan remained reactive, and at best equivocal, in economic cooperation. From the third through the ninth meetings of the AJF, the same pattern was observed, with ASEAN asking Japan to open its market and to be more generous with aid and technology transfer. Japan’s “too little, too late” response has, thus, become the bone of contention at each AJF. As such, the format of the AJF has

Introduction The Fukuda Doctrine Phase: 1977–86

17

somewhat changed from the original and come to focus on how much Japan can assist in the economic development of the ASEAN countries. Faced with one of the toughest economic crises in history and with little response from Japan, ASEAN’s frustration exploded in 1984. At the seventh AJF in October 1984, ASEAN leaders declared: In the latest round of tariff reductions of the affected items, ASEAN’s share of the total Japanese imports was minimal while the developed countries enjoyed the preponderant share. The ASEAN side stressed that trade was of vital importance to ASEAN and cooperation between ASEAN and Japan on trade matters should be improved.

ASEAN’s contention was clear: despite announcing a series of market-opening measures, Japan had not addressed the specific ASEAN requests that had been reiterated over years of dialogue. When the eighth AJF was held in July 1986, ASEAN again stressed the problem of market access for ASEAN exports to Japan and requested an improvement in the Japanese General Scheme of Preference (GSP) scheme, the lowering of tariffs and non-tariff barriers, and the expansion of import quotas for products of interest to ASEAN countries. ASEAN also requested that Japan provide a prior consultative session on its market opening measures and non-tariff barriers so that ASEAN interests could be taken into account in these exercises.

ASEAN-Japan Foreign Ministers’ Meetings since 1978 Initiated by Foreign Minister Sunao Sonoda, a political forum between ASEAN and Japan was institutionalized in June 1978, with the intent of expanding later to include the participation of the United States, Canada, Australia, New Zealand, and the

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European Community. It should be stressed here that Japan’s proposal for this meeting led to the institutionalization of the Post-Ministerial Conferences (PMC). Since then, ASEAN has held a regular conference with these dialogue partners immediately after each meeting of its foreign ministers. Among other things, the Foreign Minister’s Meeting (FMM) between ASEAN and Japan focused on the relevance of Japan’s economic aid to Hanoi as a crucial factor in maintaining stability in Southeast Asia. Japan had insisted that its economic assistance was a political lever while ASEAN warned of the danger of strengthening its communist neighbour. Although this disagreement was settled in ASEAN’s favour in 1980, many on the Japanese side felt that the further isolation of Vietnam would only result in more adventurism on its part, such as the invasion of Cambodia in 1978. Since the intervention, Japan had supported ASEAN’s stand on the Cambodian issue. While following the ASEAN dictates in resolving the conflict, Japan nonetheless maintained its dialogue with Hanoi. At the third FMM in June 1981, Sonoda disclosed Japan’s formula for a “comprehensive political settlement” of the Cambodian problem, including: • • • •

The introduction of peace-keeping forces to enforce an immediate ceasefire; The phased withdrawal of the Vietnamese forces in accordance with a prearranged schedule; The regrouping of all the Cambodian armed elements in designated locations for their disarmament; and The maintenance of peace and order in the country.

Furthermore, by calling for an international conference on Cambodia, Sonoda expressed Japan’s readiness to extend as much cooperation as possible in close coordination with ASEAN, if

Introduction The Fukuda Doctrine Phase: 1977–86

19

and when the conflict made headway toward a solution. However, during the following two years, there were no signs that the conflict would be settled. As such, Japan became more concerned with economic and financial contributions for the reconstruction of the postwar economies of Indochina. In 1984, Foreign Minister Shintaro Abe spelt out Japan’s policy rather vigorously: • • •

Japan would bear the expenses for peace-keeping activities; Japan would provide personnel and facilities for an election to be held under international supervision; and Japan would provide economic assistance to the three Indochinese countries following the realization of peace in Cambodia.

These so-called Abe principles augured well for smoothening the process of conflict resolution.

ASEAN-Japan Economic Ministers’ Meetings since 1979 The ASEAN-Japan Economic Ministers’ Meeting was first institutionalized in November 1979. The first Economic Ministers’ Meeting (EMM), held in Tokyo, covered various issues of mutual interest: trade, commodities, investment, transfer of technology, and development assistance between the two as well as the world economic situation as a whole. The ASEAN side was represented by the economic ministers of each country as well as the Secretary-General of the ASEAN Secretariat and the Japanese side was composed of five ministers: Foreign Affairs, Finance, Agriculture, International Trade and Industry, and the Economic Planning Agency. Presenting three memoranda on trade, commodities and investment, ASEAN asked for a vigorous Japanese initiative to rectify the imbalances in the trade pattern

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Evolution of ASEAN-Japan Relations

between the developed and developing countries. The Japanese government concurred with the ASEAN request to establish the ASEAN Promotion Center for Trade, Investment and Tourism as a symbolic gesture of its cooperation. Beyond this measure, however, Tokyo failed to give any substantial boost to its economic relations with ASEAN. Following the inaugural meeting, a second meeting was held in June 1985, but again failed to achieve any substantial results. ASEAN’s emphasis was for greater Japanese cooperation for a more balanced trade structure, improved market opening measures taking into account ASEAN interests instead of focusing only on the interests of developed countries, and better market access for ASEAN exports, particularly for semi-manufactured and manufactured products. ASEAN also called for Japan to address commodity market issues, the declining trend of investment flow from Japan to ASEAN, the need for technology transfer and research and development. Japan’s response, however, was “too little, too late”, and ASEAN ministers criticized the atmosphere of the meeting as “overly formal”. One problem during the Fukuda Doctrine period was the overlapping and ensuring complication in institutional arrangements, most notably between the AJF and the Economic Ministers’ Meeting. It was not until the early 1990s that MITI as a single body began to forge its dialogues with ASEAN.

Introduction

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Chapter 3

The Takeshita Doctrine Phase: 1987–96 While strengthening ties with the United States, Nakasone’s benign neglect began to be costly in terms of Japan’s relations with Southeast Asian countries. It was hoped that the change of leadership in December 1987 could turn the tide. ASEAN also needed another big push for sustaining its regional mechanism, which was damaged by political upheavals in the Philippines with the fall of Marcos. At the third ASEAN Summit in Manila, Prime Minister Noboru Takeshita made a speech entitled “Japan and ASEAN: A New Partnership toward Peace and Prosperity” in which he stated: Ten years ago, when Prime Minister Takeo Fukuda toured the ASEAN countries on the occasion of the Second Meeting of the ASEAN Heads of Government, he expressed, here in Manila, Japan’s fundamental thinking concerning promotion of ties based on “heart-to-heart” understanding with the ASEAN countries. Those ideas are still at the basis of Japanese policies vis-à-vis ASEAN.

He also enumerated three basic policies towards ASEAN: • • •

To strengthen the economic resilience of ASEAN; To promote political coordination between Japan and ASEAN; and To promote cultural exchanges. 21

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Evolution of ASEAN-Japan Relations

In a way, the “Takeshita Doctrine” accentuated ASEAN’s fresh start to its third decade because the main target of the Manila Declaration was strengthened economic cooperation. The high point of Takeshita’s visit was the formalization of an ASEAN-Japan Development Fund of more than US$2 billion as the first phase in its financial recycling programme, which the Japanese government believed would stimulate the ASEAN economies. The fund consisted of two parts: loans to the private sector at a low interest rate of 3 per cent per annum for joint ventures in the region, and untied loans to ASEAN through development institutions in each country. This Fund differed from the previous Fukuda Fund because the latter was directed only at large-scale government projects, while the former was designed to assist small and medium-sized private export-oriented companies. The immediate effect of Takeshita’s proposals can be measured by the adoption of the so-called BBC (brand-to-brand complementation) scheme, initiated and supported strongly by Japanese private firms. Regarding the BBC scheme as one of the most important forms of industrial cooperation, the ASEAN Economic Ministers’ Meeting issued the “Memorandum of Understanding, Brand-toBrand Complementation on the Automotive Industry under the Basic Agreement on ASEAN Industrial Complementation” in October 1988. In April 1989, domestic political problems worsened and Takeshita was forced to resign in the midst of his preparation for the ASEAN tour. Although his resignation was made public, Takeshita decided to visit the region (Thailand, Malaysia, Singapore, Indonesia, the Philippines) in late April and May 1989 and made a policy speech in Jakarta, entitled “Japan and ASEAN: Thinking together and advancing together”. In the speech, he explained Japan’s policy rationale:

Introduction The Takeshita Doctrine Phase: 1987–96

23

Soon after becoming Prime Minister of Japan, I have set forth an International Cooperation Initiative premised on the following three pillars. The first pillar is the strengthening of cooperation to achieve peace. Second is the expansion of Japan’s Official Development Assistance (ODA). And third is the strengthening of international cultural exchange. I believe that South East Asia is one of the most important areas for this International Cooperation Initiative, and I intend to promote actively the initiative in this region.

Japan’s diplomatic efforts to consolidate its relations with ASEAN continued after the end of the Cold War in December 1989. As the first official attempt in the post-Cold War period, Prime Minister Toshiki Kaifu visited the ASEAN countries (Brunei, Malaysia, Philippines, Singapore and Thailand) in May 1991 and made a policy speech in Singapore. Kaifu underscored the importance of the Japan-ASEAN partnership in the following manner: I believe that Japan and ASEAN are becoming mature partners able to look seriously at what we can do for Asia-Pacific peace and prosperity and to think and act together for our shared goals. Building upon the long years of dialogue between Japan and ASEAN, we are now able to speak frankly to each other in both the economic and political spheres. Along with continuing to work to create a climate conducive to candid dialogue in all areas, I intend to make a concerted effort for greater cooperation in all fields.

While stressing that Japan would never again become a major military power, he emphasized in the speech the important political role that Japan could play in the region, and stated that Japan was ready to host an international conference on the reconstruction of Cambodia when peace was restored to the war-torn country. In addressing Japan’s political role, Kaifu went one step beyond his predecessors in apologizing for Japan’s

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conduct in World War II: “I express sincere contrition for past Japanese actions which inflicted unbearable suffering and sorrow upon a great many people of the Asia-Pacific region.” Immediately after the Kaifu visit, Emperor Akihito paid the very first royal visit to the region in September 1991. Visiting Thailand, Malaysia and Indonesia — the carefully selected target countries — the Emperor reiterated the phrase: “Japan is peaceloving country and would never repeat the horrors of that most unfortunate war.” In at least one respect, the visit augured well since it came a few months after the May visit of Prime Minister Kaifu to ASEAN. By repeatedly showing sincere remorse and repentance over its past misdeeds, the Emperor and Empress left the impression that Japan’s intention was to begin a new era of trust and mutual cooperation with Southeast Asia. Prime Minister Kiichi Miyazawa also visited the ASEAN region (Indonesia, Malaysia, Thailand, Brunei) in January 1993 and delivered a policy speech in Bangkok, conveying Japan’s commitment to the task of forging a new order for peace and prosperity in the Asia-Pacific region, as he stressed: Japan will attach particular importance to the very process of talking with the ASEAN countries. This means that Japan will think and act together with ASEAN. I am quite confident that the wisdom and vigor of the ASEAN countries become an important pillar which supports the future of the international community, at a time when the world is searching for a new international order.

As Japan’s policy initiative, Miyazawa underscored the following four points: •

Promotion of a political and security dialogue among the countries of the region to strengthen Asia-Pacific peace and stability, and to think seriously about a future vision for the region’s security;

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•

•

•

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Continued efforts to enhance the openness of the AsiaPacific economy to promote dynamic economic development in the region; Active efforts to tackle such tasks common to humankind as promoting democratization, and pursuing development and environmental conservation in tandem; and Japan-ASEAN cooperation to build peace and prosperity in Indochina, including establishing a forum to map out a comprehensive development strategy.

In August 1994, only one year later, Prime Minister Tomiichi Murayama visited the region as the first Japanese leader of a former opposition party. Visiting Malaysia, Singapore, the Philippines, and Vietnam, Murayama repeated his apologies for Japanese wartime activities. In Singapore, Murayama was the first Japanese leader to lay a wreath at a memorial for civilian victims of the Japanese occupation of Singapore. However, Prime Minister Mahathir of Malaysia told Murayama that he could not understand why Japan continued to apologize for its actions fifty years ago. Instead, Mahathir proposed that Japan should “work with us for the future”. In Vietnam, as the first Japanese prime minister to pay a visit after the unification of Vietnam, Murayama and his counterpart, Vo Van Kiet, mutually agreed to promote a friendly relationship, including the adoption of a Japanese proposal for political talks between officials at the viceministerial level. However, unlike previous visits, the coalition government headed by the Socialist Party could not announce Japan’s policy, including specific commitments to ASEAN. As we have seen, during the Takeshita Doctrine phase, almost all prime ministers of Japan visited the region. Based on the institutional networks forged, some major achievements of ASEAN-Japan collaboration began to emerge. In effect, during the second phase, ASEAN-Japan relationships were strengthened

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in the following three areas, namely the Cambodian conflict, Myanmar, and EAEC.

Resolution of the Cambodian conflict ASEAN and Japan had been mutually engaged in trying to resolve the Cambodian conflict since its outbreak in December 1978. ASEAN’s efforts, especially Indonesia’s mediating role, had been successful in softening Hanoi’s regional policies. Japan’s role, on the other hand, was largely a provision of policy ideas. In June 1990, for instance, the Japanese government held a Tokyo Meeting on Cambodia by inviting concerned parties (from the Coalition Prince Sihanouk and Son Sann, the Phnom Penh government’s Hun Sen, Khmer Rouge representative Khieu Samphan, and Thai Deputy Prime Minister Chavalit Yongchaiyudh) to Tokyo. The major achievements were threefold: • • •

As agreed upon in preparatory meetings in Thailand, the meeting between the two opposing groups; The different tracks of peace efforts were synchronized for the first time in Tokyo; It detected a shift in the United States administration’s stand on its role in the efforts to restore Cambodian peace.

In Japan, the meeting was hailed as a diplomatic success. The foreign ministry handled it in an adroit manner. It was the Japanese policy “team”, headed by Hisashi Owada, deputyminister of the Foreign Ministry, that made Japan’s endeavour something worthwhile. The Japanese team intended to issue a “Tokyo Declaration”, a kind of binding document, in order to signify a ceasefire in the conflict, hoping especially that a Chinese leader, Yang Zhenya, could exert an influence on the Pol Pot faction. In order to effect a comprehensive political settlement, which was strongly espoused by the United States and Thailand,

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the Japanese team also had to link a ceasefire in the conflict with the formation of a supreme national council to represent Cambodian sovereignty. This turned out to be the reason for the boycott by the Pol Pot faction, who had earlier approved the original Thai plan for attending the Tokyo meeting. On 5 June, in a last attempt to reach a meaningful agreement, Sihanouk, Son Sann, Chavalit and Owada gathered in a hotel in Tokyo to discuss the joint communiqué with Khieu Samphan, who objected to the draft. Owada finally told him that the door was always open and that they would be waiting for his participation later. This was encapsulated in the Tokyo Accord, not declaration, espoused by all parties except the Khmer Rouge. In a nutshell, the Japanese team failed to accomplish the first goal but had the second agreed upon by the two warring groups in the end. Although Japan could not narrow the gap between Hun Sen and the Khmer Rouge, which had been the main cause for the failure of the past conferences, it is widely accepted that Japan’s effort in the peace process marked its first independent mediation effort in a major regional conflict in the postwar period. After the Paris agreement in October 1991, Tokyo was committed to two major policy objectives: convening an international conference on Indochina’s development and sending Japanese personnel to Cambodia as part of the UN peace-keeping operation (PKO). The first objective was realized in June 1992, when Tokyo held an international conference on the reconstruction of Cambodia (ICORC), with the result that 15 countries and international organizations agreed to contribute US$880 million to war-torn Cambodia and to establish an international committee as a coordinating body for the reconstruction of Cambodia. In a similar vein, after covering much official as well as private groundwork, Japan finally decided

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to resume its ODA to Vietnam in November 1992. Together with its reconstruction funds, this resumption of ODA would significantly expand Japan’s role in directing economic development of the Indochinese countries. Furthermore, the second ICORC meeting held in Paris in September 1993 gained momentum toward speeding up the reconstruction programme with special emphasis on agricultural rehabilitation, improvement of the transport network and funding for basic education. The second objective was rather harder to put into practice due to domestic political difficulties. Nevertheless, on 12 June 1992, by adopting the United Nations PKO Cooperation Bill, Japan for the first time rid itself of a taboo regarding the dispatch of armed forces overseas. This resulted in the appointment of Yasushi Akashi, a veteran Japanese diplomat, to head the United Nations Transitional Authority in Cambodia (UNTAC). In September, Japanese Self Defense Forces officials were dispatched to Cambodia to assist in the UN peace process. Japan’s operation involved around 600 personnel from the Engineer Corps, who were assigned to restoring roads and bridges far from areas of danger. Despite the loss of two officials and associated pressure to withdraw earlier from Cambodia, Japan’s mission was fulfilled in September 1993 with rather favourable results.

Myanmar Ever since the reparation settlement in 1953, Myanmar and Japan maintained close and friendly relations. To reinforce ties, Japan has offered its ODA, which constitutes about 70 per cent of Myanmar’s total foreign aid. Thus, Japan has come to view Myanmar as another case for its independent diplomacy by siding with ASEAN’s policy of engagement over Washington’s policy of isolation. For instance, Tokyo suspended its ODA to

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Yangon after its leaders launched a military coup d’etat and suppressed the democratic movement in September 1988. However, when Myanmar announced that it would hold elections the following year, Japan recognized the military regime, called the State Law and Order Restoration Council (SLORC) as the legitimate rulers of the newly renamed Union of Myanmar and announced plans to resume limited aid. Encouraged by SLORC’s decision to temporarily release opposition leader Aung San Suu Kyi from house arrest, moreover, Tokyo also announced a first installment of US$24 million in grant aid. Japan explained that this move was designed to encourage further political reforms in Myanmar. It is remarkable that Japan used ODA as a political tool to moderate the country’s repressive regime. Japan also demanded economic reforms in return for its foreign aid. In November 1989, SLORC adopted a foreign investment law as a result of Japan’s demand. In March 1995, Japan partially lifted its ODA curbs and extended humanitarian aid to Myanmar, saying that taking an extra step toward democratization in a way that was visible to Tokyo would lead to increased aid from Japan. Japan had another reason to worry: growing Chinese influence in Myanmar would offer Beijing naval access to key shipping lanes from the Indian Ocean and a wedge position within ASEAN. In response, Myanmar relaxed some authoritarian controls. For instance, in July 1995 when Aung San Suu Kyi was released from house arrest, Japan responded positively by providing grants worth US$17 million. Japan’s Foreign Ministry reassured the United States and European Union that this move would not mean a full resumption of ODA to Myanmar. (Japan risked a contradiction of its 1992 ODA charter if it reopened full aid with no demonstrated progress from Myanmar.) In a similar vein, Japan’s Myanmar policy began to uncouple

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itself from that of the United States and European Union, both of which had been pressuring ASEAN not to accept SLORC as a new member. On this diplomatic front, Japan sided with ASEAN, claiming that Myanmar’s membership in ASEAN was critical to working constructively to moderate SLORC’s repressive policies, bring Myanmar into ASEAN to counter China’s growing influence, and resist Western interference in Southeast Asian affairs. Thus, in dealings with Myanmar, Japan displayed a familiar pattern: seek a bridging role, offer foreign aid incentives, pursue a softer line toward authoritarian regimes than Washington, and show willingness to work with them in consideration of the China factor.

East Asia Economic Caucus (EAEC) The most telling story during the Takeshita Doctrine phase was Japan’s abortive participation in the East Asian Economic Caucus (EAEC). Without a doubt, the proposal for the establishment of EAEC in December 1990 was unique in that Japan for the first time was asked by the Southeast Asian countries to clarify its political role. As one scholar concluded: A strong leadership can come only from a member economy, which stands tall in the global arena. Indonesia is much too small to play this role meaningfully. Even China cannot take on this role, despite its size, as it is still a marginal player in the international trade and investment spheres and it has a long way to go before it can get fully integrated into the global market economy. This line of reasoning would inevitably lead us to only one possibility, that is, Japan as the leader of the EAEC.

Ever since Malaysian Prime Minister Mahathir had asked Japan to join EAEC, however, Japan’s position had vacillated, reflecting the substantial debate within Japan. Mahathir’s original

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idea was to form a bloc to counter a “fortress EU” and an emerging North American Free Trade Agreement (NAFTA). In response, Prime Minister Kaifu suggested that Mahathir “study the proposal more carefully” and said that he would consider it if the proposal became an ASEAN scheme. But, when EAEC became an ASEAN scheme, Prime Minister Miyazawa cautiously rejected it, saying that “the Asia-Pacific region should continue to be open in order to prevent the emergence of a fortress EC and NAFTA”. In an attempt to consolidate regionalism, Eiichi Furukawa, a former Foreign Ministry officer and now head of the Japan Center for International Strategies, strongly urged Japan to support EAEC. As he explained: Japan today, on the other hand, is isolated without such a firm basis of support in Asia. No matter how huge its economic power is, Japan remains in a weak position. Fortunately, ASEAN countries have offered support. It is encouraging. It will also help stabilize the relations among Japan, the United States and the EC at international talks, including the G-7 meetings and summit talks. This is what the East Asia Economic Caucus plan means.

Accordingly, Furukawa embarked on a series of activities to arouse public support for the EAEC. However, the Foreign Ministry, reflecting a U.S.-first policy, demurred, given the fact that Washington had even asked Tokyo to reject the proposal. Thus, at the third meeting of Asia Pacific Economic Cooperation (APEC) in Seoul, Japan expressed its firm support for the APEC process and emphasized the danger of “closed” regionalism (i.e., EAEC). Japan’s effort to reject EAEC escalated until early 1993, as exemplified by governmental groups as well as official white papers, including the Economic Planning Agency’s White Paper on the World Economy. The only exception was Kazuo Ogura,

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a Foreign Ministry official, who had been openly advocating closer Japanese identification with East Asia. A significant turning point came in early 1993 when Washington began to reassess the function of the EAEC. Following Washington’s reappraisal, Tokyo came to terms with the EAEC, whose function was now to accommodate APEC. Within Japan, a bipartisan committee to promote the EAEC was organized in March with the participation of a few prominent political figures, such as Ryutaro Hashimoto and Hiroshi Mitsuzuka from the LDP and Tomiichi Murayama of the Socialist Party. Although the question of Japan’s participation remained unsettled, MITI expressed less reluctance than before about support for the EAEC proposal. But the Foreign Ministry still remained wary of the proposal, strengthening the view that Japan would prefer others in the region to take the initiative. Understandably, Mahathir’s comments on Japan’s attitude had taken on a harsh tone, as was evident when he stated: We are disappointed when Japanese officials asked us to explain and explain all over again what the EAEC is all about. Even those officials who have served for years in Southeast Asia claim that they do not know about the EAEC. We are saddened by this. The only Asian country with the ability to help Asian countries refuses to do so but instead demands to know why America is not included, why Australia and New Zealand are not included? The answer is obvious. They are not East Asians.

In late 1994, new developments were unfolding due to the persistent efforts of ASEAN. First, ASEAN attempted to create EAEC in a new form, such as a special luncheon or a ministerial meeting among the East Asian countries. In fact, soon after holding an informal Foreign Ministers’ Meeting in July 1994, the ASEAN economic ministers’ meeting in Chiang Mai decided to convene another such meeting and invite the EAEC countries.

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In April 1995, however, the Japanese government suddenly decided not to participate in the scheduled economic meeting in Phuket, out of apparent concern that it could be a de facto preparatory event for EAEC’s inclusion, and because of the fact that the scheduled meeting left out Australia and New Zealand. It was unfortunate that Japan’s decision ultimately forced ASEAN to eschew the meeting in Phuket. Second, ASEAN announced a policy of forming a high-level meeting with the EU in October 1994, to which Japanese business groups responded positively for the first time by expressing their support for the EAEC. Keidanren, for instance, asked the Japanese government to participate in the EAEC by citing the fact that private-level cooperation among the constituent countries had already taken place. However, when the organization sent its mission to the ASEAN countries in February 1995, its position turned somewhat negative toward the EAEC, partly because of American pressure wrought through its embassy in Tokyo. Nevertheless, Tokyo’s positive attitude toward consolidating East Asian regionalism was induced partly by EU’s approval of East Asian regionalism in the form of an Asia-Europe Meeting (ASEM). In March 1996, ASEAN successfully convened its first toplevel meeting with European leaders in Bangkok by inviting Japan, South Korea, and China. The first ASEM was heralded for its ground-breaking attempt to strengthen ties between Asia and Europe, which had been the relatively weak link in the triangle of Asia-Europe-North American relations. The key objectives of ASEM have been stated as enhancing the mutual understanding and benefit of Asia and Europe, and contributing to the establishment of a new world order through dialogue and cooperation. To this end, the strengthening of dialogue and cooperation between these two regions on political, economic, cultural and global issues, as well as a wide range of other issues,

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was included in the chairman’s statement at the March 1996 meeting. It is interesting to note that Japan, which opposed ASEM at first because of its exclusion of Australia and New Zealand, eventually joined the meeting.

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Chapter 4

The Hashimoto Doctrine Phase: 1997–2003 Thus far we have seen evidence of the fact that official prime ministerial visits have uniquely characterized Japan’s political relations with ASEAN. Even if the frequency of ministerial meetings between Japan and ASEAN does not signify anything unusual — after all ASEAN holds regular meetings with other dialogue partners as well — the almost de rigueur visits to the ASEAN region by Japanese prime ministers would appear to contain special implications. Compared with top-level visits by the other dialogue countries, the difference is underscored by the “closeness” of JapanASEAN relations. The third phase started with the return to LDP rule under Prime Minister Ryutaro Hashimoto. In January 1997, despite the mounting hostage crisis in Peru, Hashimoto visited the region (Brunei, Malaysia, Indonesia, Vietnam and Singapore) and proposed the formation of a top-level forum between Japan and ASEAN. Furthermore, in Singapore, Hashimoto delivered a policy speech, “Reforms for the New Era of Japan and ASEAN for a Broader and Deeper Partnership”, which underscored Japan’s consistent policy toward ASEAN since 1977: 35

36

Evolution of ASEAN-Japan Relations As you probably remember, in 1977 then Prime Minister Fukuda launched the so-called Fukuda Doctrine, and in 1987 then Prime Minister Takeshita proposed that Japan and ASEAN establish a new partnership. Today, I would like to deliberate with you on how Japan and ASEAN should reform their cooperative relationship in a manner suitable for a new era.

Most importantly, he proposed the following three policies: to promote broader and deeper exchanges between Japan and ASEAN at the top and all the other levels; to deepen mutual understanding and to expand cultural cooperation, in order to consolidate Japan-ASEAN friendship, and to jointly address themselves, by sharing their wisdom and experience, to various problems in the international community. ASEAN in 1997, however, was facing a critical transition. The end of its third decade was marred by an unprecedented crisis for most member countries. In July, a financial crisis occurred in Thailand, which soon engulfed East and Southeast Asia. The crisis became so pervasive that ASEAN is said to have lost its credibility in directing ARF and APEC. Given the sudden collapse of the Soeharto regime in May 1998, pessimists claimed that the “ASEAN way” no longer worked. Indeed there were three major problems — a financial crisis, political instability, and the growing economic gap within ASEAN as a result of its expansion. To consolidate regional policies, ASEAN needed stronger support at the beginning of its fourth decade. In response to ASEAN’s needs, Hashimoto disclosed Japan’s comprehensive policy at the ASEAN-Japan Summit in December 1997. At the Summit in Malaysia, Japan announced that in view of the Asian economic turmoil, Japan would cooperate with ASEAN toward stabilizing Asian currencies and financial markets and would also assist ASEAN in achieving stable and sustained development through economic structural reforms. Recognizing the need to build upon the foundation of their

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relationship, ASEAN and Japan resolved to further advance their cooperation towards the 21st century. With a view to fostering an enhanced partnership, they decided to intensify dialogues and exchanges at all levels. In particular, both ASEAN and Japan noted the importance of high level dialogues and decided to hold the Leaders’ Meetings as frequently as possible. While economic conditions worsened, the 1998 ASEM and ASEAN Summits at the end of that year had moved Japan and ASEAN further toward consolidation of regional policies. The 1998 ASEM, like the one in 1996, was quite successful from the standpoint of policy coordination between the countries of East Asia. Likewise, the 1998 ASEAN Summit saw agreement among East Asian leaders to strengthen their unity after Prime Minister Keizo Obuchi urged more dialogues to establish a solid basis for peace and stability in the region. More specifically, Obuchi proposed the following: •

•

•

•

Japan would implement the US$30 billion Miyazawa plan and special yen loans totalling 600 billion yen, and would also start local training of 10,000 people in Asia; Japan would contribute 500 billion yen to establish a ”human security fund” under the United Nations to fight such threats as environmental hazards, drugs and terrorism; To promote intellectual dialogue, Japan planned to build a centre in Tokyo for exchanges involving graduate students and researchers from around the world; Japan proposed the establishment of a consultative conference to discuss and make recommendations for JapanASEAN cooperation. Apparently, this development had been influenced by a prior

decision between Prime Minister Obuchi and President Clinton in September 1998, to differentiate the areas for which each

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country would take main responsibility, that is, Japan for Asia, the United States for Latin America. What this meant is that Japan’s active role in the “emerging” East Asia would be forthcoming, and furthermore, that it would not provoke any unnecessary reactions from the United States. The Japanese government, on its part, contemplated specific measures to consolidate a new regionalism in East Asia, which included a detailed plan (the Obuchi Plan) for enhancing human resources development and exchanges in East Asia. Moreover, the first meeting of a conference of eminent persons from Japan and ASEAN (announced by Prime Minister Obuchi at the December 1998 Japan-ASEAN Summit Meeting) was held in Vietnam in October 1999. There was a lively exchange of views on the modalities for cooperative Japan-ASEAN relations with a view to the 21st century. Following its Second Meeting, the Consultation Conference was requested to report its recommendations to the Japan-ASEAN Summit Meeting to be held in Singapore at the end of 2000. In October 2000, Japan submitted the report, “Towards Vision 2020: Japan-ASEAN Consultation Conference on Hanoi Plan of Action”, in which 45 recommendations were made including the implementation of the Hanoi Plan of Action and the Vision 2020, as well as Japan’s contribution to this process, through more dynamic and deeper ASEAN-Japan cooperation. Visiting Cambodia, Laos and Thailand in January 2000, furthermore, Obuchi extended Japan’s assistance to these countries by showing its concrete plans for developing human resources and correcting economic disparities among ASEAN countries. More specifically, Obuchi expressed Japan’s firm support towards Cambodia and Laos, which had just joined ASEAN and had been vigorously undertaking domestic reforms. He also expressed that Japan would provide every possible

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assistance in areas such as policy formulation and human resources development. It was also significant that this was the first visit to Cambodia and Laos in 43 and 33 years, respectively, by a Japanese prime minister. Another aim of the visit was to explain Japan’s position on the forthcoming Kyushu-Okinawa summit of the Group of Eight and to have the voices of Asian countries reflected at the event. Hashimoto and Obuchi, however, were preoccupied with the immediate issues of resolving the financial crisis. Let us see how both ASEAN and Japan interacted over the issue by examining Japan’s forward policies on: • •

•

The proposal of an Asian Monetary Fund; Two initiatives by ASEAN and Japan, that is, the New Miyazawa Initiative and the formation of financial support system in the name of the Chiang Mai Initiative in May 2000; and as a result of these policies, Moving towards a new peak in ASEAN-Japan relations.

The East Asian Financial Crisis and an Asian Monetary Fund By the end of the 1980s, many had come to regard East Asia as a growth centre of the world economy. Terming this phenomena “the East Asian Miracle”, the World Bank, in particular, attributed East Asian success to the steady growth of export-oriented manufacturing industries, highlighting Japan’s role in supplying much-needed capital, expertise, and technology. The rapid revaluation of the yen led to Japan’s economic push into East Asia, and by the early 1990s, Japan had become the largest foreign investor in most countries in the region. The growing political and economic links between Japan and the rest of East Asia were bound to raise the question of the

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possibility of Japan’s forming a separate economic bloc. As one observer explains: “The idea of forming of a yen bloc will become mature when the economic benefit surpasses the political cost”. Malaysia’s proposal of forming an East Asian Economic Caucus (EAEC), in which Japan is expected to play a leading role while the United States is excluded, suggests that a yen bloc is no longer an idea ahead of its time. An earlier indication of this came in the late 1980s, when the Plaza Agreement led to the appreciation of the yen, which pushed a massive inflow of Japanese investment into East Asia. To what extent, then, is the yen used for Japan’s trade settlements within East Asia? According to 1994 data compiled by MITI, in Japan’s main East Asian trading partners, the yen was used for 52 per cent of exports and 30 per cent of imports, while 45 per cent of exports and 67 per cent of imports were denominated in dollars. Although the dollar remains the dominant currency in Asia’s international trade, Asian countries are expected to use more yen in their trade deals, for the following two reasons. First, intra-regional trade among the NIEs, ASEAN, and China has been on the rise. Second, the relative weight of the region’s trade with the United States has been on the decline, amounting to only 19 per cent of total trade in 1992. To promote greater use of the yen, Japan and ASEAN have began to seek a joint venue. In April 1995, for instance, in its package of emergency measures for coping with the appreciation of the yen, the Japanese government for the first time announced that it would promote greater use of the yen in Japan’s international trade and establish a more intimate relationship with the monetary authorities of other East Asian countries. This step was quite significant because the notion that Japan has a duty to give the yen a regional, if not a global, role marks

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a sharp departure from the insular view favoured by Japan’s financial elite in the past. At the same time, the Japanese government concluded the so-called repurchase agreements (repo) with Indonesia, Malaysia, the Philippines, Singapore and Thailand in April 1995, and convened the first meeting of the East Asia-Pacific Central Bank Executives in July 1996. The Asian financial crisis came to a head in the middle of 1997 when Thailand devalued its currency and announced a policy to adopt a floating exchange system. Soon after the 2 July devaluation of the baht, the Japanese Finance Ministry began a discussion with key Asian countries about a possible rescue plan, due to the shared fear that the Thai currency crisis might trigger a chain reaction in neighbouring economies. Japan was determined to play a leading role in mobilizing international support for a rescue package in August 1997. The Tokyo meeting was significant from the standpoint of Japanese leadership because it was the first time since World War II that Tokyo laid a framework for regional economic cooperation. The striking fact is that the United States failed to spare even a dollar on a bilateral basis. It appeared that Washington would never act as a central bank for East Asia. Japan’s rather swift response and handling of the situation could be interpreted as having had another implication, as one Thai newspaper explained: With the exception of the powerful presence of the International Monetary Fund, Japan has led the pack of neighbouring countries providing Thailand with a $16.7 billion bailout fund, almost amounting to a de facto East Asian Economic Caucus, as proposed by Malaysia.

Japan and the ASEAN countries jointly came up with a proposal to set up an “Asian Monetary Fund (AMF), an Asian version of International Monetary Fund (IMF)”, which was

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proposed formally on 20 September 1997, with the following two objectives: (1) the IMF surveillance mechanism would be supplemented with local surveillance by the AMF in the region; and (2) in accordance with the IMF economic adjustment programme, participants of the AMF would engage in financial support of the troubled countries in the region. The idea, akin to the U.S. Treasury’s Exchange Stabilization Fund for Mexico, was to establish a US$100 billion Asian bailout fund, consisting of money to be pooled by Japan and the ASEAN countries. Like the EAEC, its underlying rationale was, in any emergency, to be able to deal with regional economic problems locally because organizations such as the IMF or the World Bank were seen as having serious deficiencies in their handling of crises. Besides, as many Asian leaders contend, IMF’s offers of financial assistance come with strict conditions for domestic adjustment policies. In September 1997, Japan offered Thailand a soft-loan package of US$900 million. It was the second largest amount in the history of yen loans to Thailand. This offer was separate from any IMF or possible AMF initiatives. And, in contrast to IMF loans, the Japanese funds did not come with any reformist strings attached. Most importantly, the proposal for the AMF was quite an advance in terms of Japan’s leadership: for the first time, Japan had supplied a coherent set of ideas and provided the necessary resources to follow them through. Led by the policy entrepreneur, Eisuke Sakakibara, the Finance Ministry took some initiatives. First, Sakakibara prepared a draft for the AMF proposal while exploring the possibility of an Asian fund with his counterparts in East Asia and the United States. According to Sakakibara, although East Asians supported the proposal, Washington’s immediate reaction was negative. Second, the Finance Ministry sent the proposal to ten East Asian

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countries in order to discuss it at the upcoming IMF and World Bank meeting in September in Hong Kong. Sakakibara thought that the agreement might be possible due to lingering high expectations for regional cooperation among East Asian countries. In fact, at the meeting on 21 September 1997, ASEAN and South Korea supported the AMF while the United States instead proposed a surveillance system, and Australia, Hong Kong, and China remained somewhat neutral. However, after this meeting, the United States began to strongly oppose the AMF idea, which it feared could directly challenge the IMF. In particular, U.S. officials worried that an independent regional fund for international bailouts would not carry stringent enough conditions. The United States did not criticize Japan’s failure to do enough to help. “If anything”, according to one observer, “Washington believed that Japan was doing too much”. In early November, Sakakibara went to Washington to lay the groundwork for the coming Manila conference by mending the differences between Japan and the United States. Through the negotiations, the following agreement came on 5 November: first, the IMF emergency loan system should be strengthened; second, the IMF Tokyo office would be responsible for the surveillance of the regional economy; and third, the IMF’s information disclosure standards should be strictly applied for nations in the region. Due to American opposition, representatives from the Asia-Pacific countries at the financial meeting held in November 1997 in Manila decided to seek a looser arrangement involving a regional commitment to pool resources at a time of crisis, rather than setting up a permanent fund. The resulting agreement included four areas of cooperation: •

A mechanism for regional economic surveillance to complement the IMF’s global role;

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•

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Enhanced economic and technical cooperation in strengthening domestic financial systems and regulatory mechanisms; Measures to bolster the IMF’s ability to respond to financial crises; and A cooperative financing arrangement that would supplement IMF resources.

Although Sakakibara admitted the miscarriage of the AMF attempt, he knew that this compromise was far from sufficient to resolve the financial crisis. The APEC leaders in November 1997 could not reach any agreement that would alleviate the crisis, except for announcing some preventive policies along the lines of the IMF. Against this backdrop, the Hashimoto administration came up with more decisive measures to boost ASEAN economies at the first-ever Summit between ASEAN and East Asian leaders in December 1997. Reflecting the economic difficulties in Japan, Hashimoto announced a US$18.5 billion trade insurance credit line and pledged to apply “most-preferential” low-interest loans to “cross-border, infrastructure projects” such as the construction of roads between two or more countries. The measure also included a project to invite 20,000 people to Japan for training over a fiveyear period, and to boost productivity and competitiveness of small and medium- sized enterprises and supporting industries. At the end of the summit, moreover, Hashimoto promised that Japan would commit itself to addressing ASEAN’s long-standing call for improved access to Japan’s huge market for member countries’ products. It is quite conceivable that the establishment of an Asian IMF could have contributed immensely to the formation of a yen bloc. Whether or not Southeast Asian countries will avoid the dollar-peg system and lean more toward adopting a basket

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currency system comprising various Asian currencies, including the yen remains to be seen. A positive step was taken towards this end, however, at the Financial Ministers’ Meeting between ASEAN and Japan held on 1 December 1997 when all the leaders agreed to meet annually. Accordingly, the second ASEAN Finance Ministers’ Meeting was held in Jakarta in February 1998 and it was agreed: •

•

•

To establish immediately ASEAN’s policy surveillance mechanism with its secretariat based at the Asian Development Bank; To promote the use of ASEAN currencies in intra-regional trade, initially on a voluntary basis, and oversee its evolution into a multilateral arrangement; and To welcome Japan’s pledge to stimulate domestic demand and call on it to take the lead in bringing the region out of the crisis.

Japan’s abortive attempt to create the AMF suggests the limitation of the so-called “Washington consensus”, which implies the unleashed flow of capital. As such, the idea of reviving the AMF emerged as part of the agenda of ASEAN in late 1999, with many leaders in East Asia still believing that the envisioned AMF could play a major role in establishing a safety net for East Asian monetary and financial systems.

Two Initiatives by Japan and ASEAN Soon after the sinking of the AMF proposal, the Japanese government announced a new initiative to overcome the Asian currency crisis on 3 October 1998. The initiative, called the New Miyazawa Initiative, was a package of support measures totalling US$30 billion, of which US$15 billion would be made available for medium to long-term financial needs for economic recovery

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in Asian countries, and another US$15 billion set aside for shortterm capital needs. These funds had no special conditions attached to them. Finance Minister Miyazawa explained it as “a new scheme of financial assistance which could lead to a regional currency support mechanism”. Starting in December 1998, that support was offered to Malaysia, Thailand, Indonesia, the Philippines and South Korea. The Initiative was a region-wide framework with each country in the region linked bilaterally to Japan as its core. By 2002, some US$21 billion was used out of US$30 billion announced. Funds were dispersed to Malaysia, Vietnam and Myanmar, where IMF programmes were not in place. Malaysia, having rejected IMF proposals and imposed capital controls in September 1998, was especially eager to utilize funds that could be disbursed quickly and was not linked to IMF conditionality. In 2000, the New Miyazawa Initiative was expanded beyond loans to include the establishment of backup facilities, called currency swap agreements. The May 2000 Financial Ministers’ Meeting of ASEAN and Japan, China and South Korea agreed with the framework for strengthening East Asian financial cooperation, which had two components: an expansion of an existing ASEAN swap agreement and the establishment of a network of bilateral currency swap arrangements. Both components were seen as an aid to protecting against future speculative currency attacks. The Chiang Mai Initiative (CMI) stated that the arrangement would supplement existing international facilities, including those provided by the IMF. At the same time, however, it stated that the purpose of the bilateral swap arrangement was to provide short-term financial assistance to a country in need of balance of payments or short-term liquidity support. The CMI is a significant watershed in the history of East Asian regionalism, as Nabers explains: “The

Introduction The Hashimoto Doctrine Phase: 1997–2003

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extension of the currency swap accord epitomizes the sincerity of East Asian attempts to strengthen regional cooperation”. The scheme became effective in November 2000 and allows member banks to swap their local currencies with major international currencies for a period of up to six months, and for an amount up to twice their committed amount under the scheme. Thus, ASEAN and Japan are gradually developing a regional self-help and support mechanism that partly resembles a regional monetary fund, through the CMI and other ongoing efforts to strengthen regional surveillance mechanisms.

Towards a New Height in ASEAN-Japan Relations Although the EAEC did not materialize, Japan’s commitment to Southeast Asia has grown since the financial crisis. The Hashimoto administration’s attempts in 1997 suggest a departure from traditional bilateralism to a new regionalism. Hashimoto’s two visits to the region symbolized Japan’s gradual shift toward an independent and active role in Southeast Asia. His second visit to Kuala Lumpur seems to be critical in that Hashimoto attended the first summit meeting with East and Southeast Asian leaders, the ASEAN+3. Moreover, Japan’s cultural relations with ASEAN were stressed far more than they had been by his predecessors. All in all, these major initiatives since 1997 have only strengthened Japan’s diplomatic leadership, despite Hashimoto’s resignation in August 1998. The momentum accelerated as Japan entered the 21st century. Prime Minister Junichiro Koizumi has shown a determined attitude towards Southeast Asia, partly influenced by his mentor Takeo Fukuda. In January 2002, visiting five of the ASEAN countries (the Philippines, Malaysia, Thailand, Indonesia and Singapore), Koizumi explained Japan’s strategy of maximizing the ASEAN+3 framework and building up concrete regional

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cooperation as a means of creating a “community that acts together and advances together”, while stressing that promoting open regional cooperation in a form that is transparent to extraregional countries will contribute to the peace and prosperity of the region. In Singapore, Koizumi proposed several new initiatives for cooperation, including the designation of 2003 as the Year of ASEAN-Japan Exchange, reinforced cooperation in education and human resources development, solidifying security relations, the ASEAN-Japan Comprehensive Economic partnership, and the Initiative for Development in East Asia. As he averred: Our goal should be the creating of a community that acts together and advances together. And we should achieve this through expanding East Asia cooperation founded upon the Japan-ASEAN relationship. While recognizing our historical, cultural, ethnic and traditional diversity, I would like to see countries in the region become a group that works together in harmony.

Then, at the 2002 ASEAN-Japan Summit, the Joint Declaration on the Framework for Comprehensive Economic Partnership (CEP) was signed. Its objectives are five-fold: • • •

• •

To strengthen economic integration between Japan and ASEAN through the creation of a CEP; To enhance the competitiveness of Japan and ASEAN in the world market through strengthened partnership and linkages; To progressively liberalize and facilitate trade in goods and services as well as create a transparent and liberal investment regime; To explore new areas and develop appropriate measures for further cooperation and economic integration; and To facilitate the more effective economic integration of the newer ASEAN members and bridge the development gap among the ASEAN members.

Introduction The Hashimoto Doctrine Phase: 1997–2003

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At the same time, Japan and Singapore signed an agreement for a New Age Economic Partnership (JSEPA) on 13 January 2002. It aimed to promote freer transborder flows of goods, people, services, capital and information, to reduce economic borders and to contribute to the promotion of an economic partnership in a range of areas. When the JSEPA was signed, it was hailed as being of great strategic significance for East Asia and for offering Japan a model for future regional relationship. In terms of the regional economic agenda, Japan was quick to respond to China’s 2001 overtures to ASEAN for a China-ASEAN FTA to be established by 2010. Obviously China’s actions precipitated Japan’s own responses and Japan-China competition has become one important driving force for greater Japanese participation in regional affairs. As part of the Koizumi Initiative, moreover, Prime Minister Koizumi held an ASEAN-Japan summit meeting in Tokyo in December 2003, the first such summit meeting ever held outside Southeast Asia. At the meeting, two documents were adopted. The first is the Tokyo Declaration for the Dynamic and Enduring Japan-ASEAN Partnership in the New Milennium, in which both parties adopted the following principles and values: (1) Japan and ASEAN will further deepen and broaden their relationship, natural economic complementarities, social and cultural affinities, including the desire for closer people-topeople contacts and exchanges. (2) Japan and ASEAN will enhance their cooperation through closer consultation and adherence to the principles enshrined in the Charter of the United Nations and international law, and commend the purposes, principles and spirit of the Treaty of Amity and Cooperation in Southeast Asia, including

50

(3)

(4)

(5)

(6) (7)

Evolution of ASEAN-Japan Relations

respect for national sovereignty and territorial integrity, renunciation of threat or use of force, peaceful settlement of disputes, and non-interference. Japan and ASEAN will contribute to the creation of an East Asia region where countries and peoples can live in peace with one another and with the world at large in a just, democratic and harmonious environment. Japan and ASEAN will forge common visions and principles, including respect for the rule of law and justice, pursuit of openness, promotion and protection of human rights and fundamental freedoms of all peoples. Japan, through its development assistance and support programmes, will give high priority to ASEAN’s economic development and integration efforts as it strives to realize the ASEAN Community. Japan and ASEAN will collectively promote the development of regional and transregional frameworks. Japan and ASEAN will address regional and global issues, keeping in mind their special relationship based on equality, mutual respect and mutual benefit.

The other is the Action Plan which specified ways and means to pursue expeditiously and substantively common strategies for joint action in the following areas: (1) Reinforcing comprehensive economic partnership and monetary and financial cooperation; (2) Consolidating the foundation for economic development and prosperity; (3) Strengthening political and security cooperation and partnership; (4) Facilitating and promoting exchange of people and human resource development;

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(5) Enhancing cooperation in culture and public relations; (6) Deepening East Asia cooperation for an East Asian community; and (7) Cooperation in addressing global issues. With these two documents, Japan has clarified its commitments and defined the future direction of ASEAN-Japan relations. That is, Japan has committed itself to further pushing ahead with CEP and stressed the importance of creating an East Asian community.

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Introduction 5. The ASEAN+3: A New Phase?

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Chapter 5

ASEAN+3: A New Phase? The ASEAN+3 (China, Japan, South Korea) framework emerged from an increasing drive among the East Asian countries to learn from the currency and financial crisis and strengthen regional cooperation. Since ASEAN and APEC could not deal with the financial crisis, Asian leaders turned to East Asian instead of Asia-Pacific cooperation. As we have seen, the first summit took place in December 1997, with leaders agreeing at the second summit in December 1998 to regularize the event. Since some countries in the region were reluctant to commit themselves to cooperation in East Asia, the ASEAN+3 began in quite a low-key way. No joint statement was launched. Moreover, the term “ASEAN+3” was cautiously and rarely used in the first two meetings, much less in the agenda for the meeting. It was only after the ASEAN+3 meeting of finance ministers in March 1999 that the term “ASEAN+3” was widely used. Let us look more closely how this process has been evolving. At the third meeting in November 1999, thirteen leaders for the first time adopted the “Joint Statement on East Asia Cooperation”, in which leaders resolved to promote cooperation in a wide range of areas encompassing monetary and financial cooperation, social and human resources development, scientific 53

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and technical development, the cultural and information area, development cooperation, and political-security and transnational issues. Moreover, at this summit, the first dialogue among the leaders of Japan, China and South Korea took place. The first ASEAN+3 Foreign Ministers’ Meeting was held on the margins of the ASEAN PMC in Bangkok in July 2000, mainly to conduct an interim review of the implementation of the Joint Statement. At the meeting, Foreign Minister Yohei Kono called for “open regional cooperation” and a Japan-East Asia Partnership Initiative, identifying human resources development and intra-ASEAN economic disparities as areas of focus. There was also discussion of the Korean Peninsula and Indonesia, with the meeting adopting the Joint Statement of the ASEAN+3 in support of the sovereignty, territorial integrity and national unity of Indonesia. Strengthening regional cooperation in East Asia was the central agenda at the November 2000 ASEAN+3 summit in Singapore, where Prime Minister Yoshiro Mori proposed three principles to guide the promotion of East Asian cooperation toward the 21 st century, namely building partnerships, open regional cooperation, and comprehensive dialogue and cooperation including the field of security. ASEAN also proposed an East Asian summit and an East Asian Free Trade and Investment Area. It was decided that the East Asian Study Group (EASG) advocated by South Korean President Kim Dae Jung would consider these proposals from a medium-tolong-term perspective. Many other suggestions and commitments were also made by China, Japan, South Korea and ASEAN. China stressed that its accession to the World Trade Organization (WTO) would not pose a threat. Japan proposed the following: cooperation of Japan, China, and South Korea in

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the e-ASEAN Initiative and holding of the joint conference of government officials, prominent academics and business leaders for information technology (IT) cooperation in East Asia; a comprehensive approach toward piracy and holding of the “Asian Cooperation Conference on Combating Piracy and Armed Robbery against Ship”; Prime Minister Mori welcomed the basic principles of the swap agreement (Chiang Mai Initiative) and announced Japan’s support towards the ASEAN Secretariat; cooperation in political-security fields, especially the Korean Peninsula and Indonesia for the stability of Asia. South Korea suggested the establishment of the EASG in order to review the modalities of cooperation in East Asia by both government and the private sector. ASEAN proposed to explore the possibility of holding an “East Asian Summit” to promote cooperation and foster partnerships in East Asia. Further, that Asia should present a candidate for the next United Nations Secretary-General; ASEAN should not forget to see things from both bilateral and multilateral points of view; it welcomed Japan’s US$15 billion Comprehensive Cooperation Package on Information Technology; ASEAN should carry out research regarding the possibility of creating a free trade and investment area in East Asia. The second ASEAN+3 Foreign Ministers Meeting was held in Hanoi in July 2001. At the meeting, the progress of cooperation within the ASEAN+3 framework and the need to strengthen ASEAN+3 as an open regional cooperation was emphasized. The theme of the November 2001 ASEAN+3 summit in Brunei was building a closer East Asian partnership. An East Asian Vision Group (EAVG) report was also submitted to the summit. The main discussions of the 5th summit were: (1) On the Korean peninsula, Prime Minister Koizumi explained that Japan placed the highest priority on the abduction and

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(2)

(3) (4)

(5)

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security issues, including the Japan-North Korea normalization talks. Several leaders stated that North Korea should observe its international commitments, and this problem should be peacefully resolved. They released a clear message regarding the dismantlement of the nuclear development programme. China announced a reduction of debts for developing countries. Many leaders emphasized the significance of forming an East Asian free trade area. Prime Minister Koizumi referred to Japan’s efforts to strengthen economic partnerships. Most leaders referred to the East Asian Free Trade Area and East Asian Summit Meeting. Many ASEAN leaders stated that cooperation for the Initiative for ASEAN Integration (IAI) from Japan, China, and South Korea was important. Prime Minister Koizumi announced that Japan wanted to positively contribute to the IAI. South Korea announced that it was prepared to offer US$5 million to the IAI project. On transnational issues, China proposed the holding of a ministerial meeting on transnational crime; declared their antiterrorism intentions; the Philippines proposed the holding of a seminar on antiterrorism measures; and Prime Minister Koizumi announced the acceptance of more training seminar personnel as a measure to support antiterrorism capacity building.

The sixth summit was convened in November 2002 in Phnom Penh, Cambodia. The ASEAN+3 process has expanded to include regional political and security issues such as the fight against terrorism and transnational crime in the near future. The leaders expressed willingness to explore the phased evolution of the ASEAN+3 summit into an East Asian

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summit. In addition to supporting ASEAN initiatives, the three countries have been helping integration through their own efforts, notably Japan’s Initiative for Development in East Asia (IDEA), the East Asia Vision Group and the East Asia Study Group initiated by South Korean and the Framework Agreement on ASEAN-China Economic Cooperation. Most importantly, the final report of the Vision Group was submitted to the Summit and 26 specific measures were recommended. The thirteen leaders tasked their economic ministers to study and formulate options on the gradual formation of an East Asia Free Trade Area and report the results to them at the next summit. The seventh summit was held in October 2003 in Bali, Indonesia. Thirteen leaders discussed several important issues such as the nuclear question on the Korean Peninsula, the future of East Asian cooperation, poverty alleviation, human resources development and the development of infrastructure for ASEAN integration. They also endorsed the Implementation Strategy of the Short-Term Measures of the Final Report of the East Asia Study Group. It was agreed to ensure that the measures would be implemented effectively, efficiently and systemically. They welcomed the Report of the ASEAN+3 Study Group as presented by Japan on Facilitation and Promotion Exchange of People and Human Resources Development, and appreciated the initiative taken in implementing the short-term measures as recommended by the Group, while discussing the progress of the Initiative for Development in East Asia in the framework of ASEAN+3 cooperation. In substance, then, although the 13 leaders have met every year since 1997, we have not as yet seen any substantial and tangible results except for the CMI, due to internal division and uncertainties, as shown by Table 2 below.

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TABLE 2 Evolution of ASEAN+3 The First December 1997

Kuala Lumpur

• Emphasis on Manila framework • Importance of dialogues with Europe

The Second December 1998

Hanoi

• Proposal for East Asian Vision Group (EAVG) • Agreement on institutionalization of the plus three • Importance of Miyazawa initiative

The Third November 1999

Manila

• Declaration of East Asian cooperation • Announcement of Obuchi Plan

The Fourth November 2000

Singapore

• Proposal for East Asian summit • Proposal for East Asian FTA • Establishment of East Asian Study Group (EASG) • Chiang Mai initiative

The Fifth November 2001

Bandar Seri Begawan

• Submission of EAVG report • Discussion of terrorism

The Sixth November 2002

Phnom Penh

• Discussion of EAVG report • Emphasis on EAFTA and EA summit • Discussion of North Korean issues

The Seventh October 2003

Bali

• ASEAN’s support for six-party dialogue • Discussion of EASG report

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Nonetheless, the 1997 financial crisis created new possibilities for ASEAN as a regional politico-economic actor. For instance, because of the ASEAN+3 framework, ASEAN has been able to enhance its political leverage vis-à-vis Japan and China, profiting politically and economically from their strategic opposition. ASEAN members can be comfortable with the Northeast Asian giants vying for influence in Southeast Asia and each struggling to accommodate their Southeast Asian neighbours as best they can. In this respect, the ASEAN+3 has the potential to become the dominant regional institution in East Asia because neither APEC nor ASEAN has proven satisfactory in terms of advancing the regional interests of the East Asian governments. Should the ASEAN+3 be realized, East Asian international relations will enter a new stage. With its realization, the question should be asked: is ASEAN going to be marginalized or fade into irrelevance? Former Indonesian Foreign Minister Ali Alatas denies this claim. Instead of congratulating ASEAN on its achievement in finding a solution to the Cambodian problem, many remarked that this would be the end of ASEAN because the cement that kept it together, which was to be against Vietnam’s incursion, would not hold. Thus the member states would probably go their separate ways. It never happened that way, but this is typical illustration of the rather gloomy assessment every time ASEAN faces new international developments. Once again commentators question ASEAN’s relevance and state that ASEAN’s future is perhaps better subsumed in the ASEAN Plus Three. This kind of statement misses the point completely.

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Introduction Conclusions

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Conclusions There have been three major stages in ASEAN-Japan relations, from institutionalization and substantive achievements to wider regionalism. The Fukuda Doctrine was a turning point in ASEAN-Japan relations and the beginning of Japan’s proactive diplomatic collaboration with ASEAN. Although the announcement was in one respect a response to the declining US presence in the region after America’s defeat in the Vietnam War, Japanese governments since Prime Minister Fukuda have taken on a more political role in the region and challenged the then prevalent notion of “an economic giant but political pygmy”. In the process, the ASEAN connection has become a cornerstone of Japan’s international position and the only official commitment promulgated by the Japanese government other than its most important relations with the United States. In tandem with Fukuda’s principle of peaceful regional coexistence, Japan has sought to strengthen ASEAN politically and economically, while using economic aid and assistance to lure Vietnam out of the Soviet orbit and moderate its intransigent behaviour. Thus, we can conclude that Japan’s foreign policy has become more assertive and dynamic during the past three decades. The “ASEAN year”, the institutionalization of the Japan-ASEAN Foreign Ministers’ Meeting in 1978, and the Takeshita and 61

62 5. The ASEAN+3: A New Phase?

Evolution of ASEAN-Japan Relations 62

Hashimoto Doctrines are noteworthy examples. It should also be stressed that the announcement of the first successful Doctrine in Japanese foreign policy was due mainly to joint nemawashi (consultation) between Japan and ASEAN, thereby planting the seed for nurturing a networking mechanism for the first time. It is quite significant that the resulting Japan-Southeast Asian partnership has laid a foundation for the region’s modus operandi, based upon the three elements of North-South regionalism, multiple regionalism and open regionalism. It is in this context that the consolidation of ASEAN-Japan relations is indeed one of the outstanding achievements of postwar Japanese diplomacy. Quite visible were the joint efforts toward resolving the 1997–98 financial crisis; between 1997 and 2000, proposals for financial cooperation within East Asia came full circle. The AMF was rejected by the United States and China, only to be replaced by the Manila Framework, New Miyazawa Initiative and Chiang Mai Initiative. The ASEAN-Japan relationship played a decisive role in generating the momentum and achieving their policy agenda. Accordingly, the future direction of the relationship has much to do with the nurturing and molding of East Asian regionalism. Now that ASEAN and Japan have celebrated 30 years of fruitful relations, what should be done to foster regional cooperation in East Asia? For ASEAN, the adoption of ASEAN Concord II in October 2003 augurs well, but the capabilities of the ASEAN Secretariat need to be further strengthened to enable it to effectively coordinate and monitor the various initiatives. While strengthening its institutional foundation, ASEAN needs to resolve persistent problems of political instability, developmental policies and the growing gap between the original six and the newcomers (Vietnam, Laos, Cambodia and Myanmar).

Introduction Conclusions

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Japan, as detailed in the Tokyo Declaration and Action Plan, has to show consistent leadership in dealing with political and economic problems in East Asia while swiftly reforming and revitalizing its own economy. However, it cannot be denied that there is still a lack of confidence in Japan’s leadership amongst its Asian neighbours due to its decade-long stagnation, and many question Japan’s capability to lead economic integration in East Asia due to its domestic problems (as shown in the case of bilateral FTA negotiations). Given its legacy, Japan also would have to fully recognize its regional responsibility in maintaining sustained economic growth and ensuring peace and security in the region. Finally, East Asian regionalism so far has been founded on economic interdependence based upon market principles. Obviously ASEAN+3 does not have a strong political framework to unite members since there are no security arrangements in the region. This is important since the cooperation of Japan and China in enhancing regional integration depends on the formulation of a political framework in East Asia. In this respect, reactivation of the ASEAN Regional Forum will be crucial. It remains to be seen whether or not ASEAN-Japan relations realize their potential. Ultimate success depends on whether thirteen leaders can implement proposed projects and policies, including the CMI, East Asian Free Trade Area, Mekong projects and further institutionalization of East Asian regionalism. The task of building a new regionalism will be long and difficult. Nevertheless, this study shows that the ASEAN-Japan partnership has already developed deep economic and political ties that are mutually beneficial.

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Introduction Selected References

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Selected References Alatas, A. “‘ASEAN Plus Three’ Equals Peace Plus Prosperity”. Trends in Southeast Asia no. 2. Singapore: Institute of Southeast Asian Studies, 2001. Amyx, J. “Japan and the Evolution of Regional Financial Arrangements in East Asia”. In Beyond Bilateralism: U.S.-Japan Relations in the New Asia-Pacific, edited by E. Krauss and T. Pempel. Stanford: Stanford University Press, 2004. Dosch, J. “The Post-Cold War Development of Regionalism in East Asia”. In Regionalism in East Asia, edited by F. Liu and P. Regnier. London: Routledge Curzon, 2003. Gilson, J. “Complex Regional Multilateralism: ‘Strategising’ Japan’s Responses to Southeast Asia”. Pacific Review 17, no. 1 (March 2004): 95–133. Green, M. Japan’s Reluctant Realism. New York: Palgrave, 2001. Hirakawa, H. “East Asia’s Currency and Economic Crisis and the Development of Regional Cooperation”. Economic Research Center Discussion Paper no. 130, Nagoya University, 2001. Hook, G., et al. “Japan and the East Asian Financial Crisis”. European Journal of East Asian Studies 1, no. 2 (2002): 177–98. Kusumas, W. “Half a Hegemon: Japan’s Leadership in Southeast Asia”. Unpublished thesis, University of Virginia, 2000. Kwon, Y. “East Asian Regionalism Focusing on ASEAN Plus Three”. Journal of East Asian Affairs 18, no. 1 (Spring/Summer 2004): 98– 130. Lam, P. “Japan’s Diplomatic Initiatives in Southeast Asia”. In Japan and East Asian Regionalism, edited by J. Maswood. London: Routledge, 2001. 65

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Lincoln, E. East Asian Economic Regionalism. Washington, D.C.: Brookings Institution Press, 2004. Mendl, W., ed. Japan and South East Asia. London: Routledge, 2001. Ministry of Foreign Affairs, Japan. ASEAN-Japan: Acting Together and Advancing Together. Tokyo: Ministry of Foreign Affairs, 2003. Nabers, D. “The Social Construction of International Institutions: The Case of ASEAN+3”. International Relations of the Asia-Pacific 3, no. 1 (2003): 113–36. Ojendal, J. “Back to the Future? Regionalism in South-East Asia under Unilateral Pressure”. International Affairs 80, no. 3 (2004): 519–33. Rezasyah, T. “Koizumi’s New Policy on ASEAN and Indonesia’s Response”. Indonesian Quarterly 32, no. 1 (2004): 98–105. Sheah, D. “ASEAN and Japan’s Southeast Asian Regionalism”. In Japan’s Asian Policy, edited by T. Inoguchi. New York: Palgrave Macmillan, 2002. Singh, B. “ASEAN’s Perceptions of Japan”. Asian Survey 42, no. 2 (March/ April 2002): 276–96. Soesastro, H. “Asia-Japan Co-operation toward East Asian Integration”. In Regional Co-operation in Asia, edited by R. Hirono. Singapore: Institute of Southeast Asian Studies, 2003. Sudo, S. The International Relations of Japan and South East Asia. London: Routledge, 2002. Tay, S. “East Asian Regionalism: What’s at Stake?” In The Emerging North-South Divide in East Asia, edited by H. Lim and C. Lee. Singapore: Eastern Universities Press, 2004. Yoshimatsu, H. Japan and East Asia in Transition. New York: Palgrave, 2003.