ASEAN and Japan

Japan has tended to be rather cool to Asian integration in the past. About two decades ago, there was considerable effort to initialize an Asian economic union but Japan's reticence was the major cause of the movement's downfall.

There have, though, been Japanese leaders who have recognized the value of the concept including former Prime Minister Takeo Fukuda back in 1977. Fukuda liked what he saw in the Association of Southeast Asian Nations or ASEAN and backed the idea of unity between Japan and the grouping of nations.

Just this year, Prime Minister Yasuo Fukuda, the son of Takeo, mentioned important goals for Japan that mirrored the "Fukuda Doctrine" of his father.

Japan now backs integration movements that would include ASEAN plus Three, including Japan, China and South Korea; the Asian Community -- which includes ASEAN plus Three leaders and their counterparts from Australia, India and New Zealand, and smaller interregional trade relationships. In all cases, ASEAN will serve as the central connecting point.

And we've seen for the first time, the Japan International Cooperation Agency enter into a formal agreement with ASEAN to cooperate on meeting specific goals including creating an ASEAN hub by 2015, and the formation of an East Asian free trade area by 2020 or earlier.

Asian Development Bank encourages regional integration

The Asian Development Bank (ADB) released a new study suggesting that the growing integration in Asia including the formation of the planned ASEAN and Asian free trade areas is healthy for the world economy.

The integration offers a new platform to promote growth, strengthen trade links, and reduce poverty, the ADB said in a new study, entitled "Emerging Asian Regionalism: A Partnership for Shared Prosperity."

The study also suggested that while Asian economic integration is market-led, to tap the full potential of regional interdependence, Asian economies need to boost their ties through closer dialogue and policy coordination.

Although environmentalists encourage local production whenever possible, the free and fair movement of commodities, products and people is essential in establishing a healthy balance between nations, and to help prevent shortages.

According to the new study, Asia is lacking in economic integration as compared to other regions.

The study highlights that Asia is less integrated in finance than in trade but financial markets are now larger, deeper, and more sophisticated than they were a decade ago. With the growth of trade and financial ties, Asia's macroeconomic interdependence has also increased.