China + ASEAN + FTA = East Asian Unification? Not Quite (Part II)

by Collin Spears – Visiting Fellow, Center for New Politics and Policy

As discussed in Part I of this series, the ASEAN-China Free Trade Agreement (ACFTA) will be a win-win for the signatories. The agreement will produce greater economies of scales, as it expands trade between members, which will result in an aggregate increase in competitive export products from China and ASEAN. However, it will not foreshadow European-style regional integration, at least not in the near future. The centrifugal force generated by the agreement will not only draw ASEAN closer to China, the regions manufacturing hub, but it will push those states outside the bloc to liberalize their own trade in order to stay competitive. While the United States is generally supportive of ASEAN, it is not in the strategic interest of the U.S. for it to be outside of an Asian economic bloc, especially one that will aid in cementing a strong Chinese leadership position in Southeast Asia. Implementation of this agreement has increased concerns among some analysts that the economic and perhaps, the political center of gravity of the region are shifting away from the United States and toward China.