Japan's Relationship to ASEAN

Examination Thesis, 2014

13 Pages, Grade: 07



1. Introduction
1.1 Problem Statement and Research Question
1.2 Structure of the Report an Methodology

2. Theoretical Background
2.1 Japans Relationship to ASEAN
2.2 Japan's political change: from bilateral to multilateral foreign policy
2.2.1 Foreign policy used in economy
2.2.2 Foreign policy used as security
2.3 Japan's financial corporation on the Asia Crisis
2.3.1 AMF - ASEAN Monetary Fund
2.3.2 The Miyazawa-Initiative
2.3.3 CMI - The Chiang-Mai-Initiative
2.3.4 ABMI - The Asian-Bond-Markets-Initiative

3. Analysis - Stability in Asia brings stability to Japan

4. Conclusion

5. References

1. Introduction

Since the 50's regional and global integration and agreements became more and more important. Even when there is a global movement of creating international economic relations and regional integration, the EU is probably the trailblazer when it comes to this. Goals of the EU are total economic integration in the short run, while it is political integration in the long run. Nevertheless other countries try to create economic areas similar to the EU. ASEAN is the most appreciable follower. (Cameron, 2010).

First it should be given a definition of economic integration. Citation:" The elimination of tariff and nontariff barriers to the flow of goods, and factors of production between a group of nations, or different parts of the same nation." (BusinessDictionary.com, n.d.) Association of South-East Asian Nations - ASEAN is an international organization between countries in South-East Asia. It was founded in 1967 of Thailand, Singapore, Malaysia, Philippines and Indonesia. In Jakarta, Indonesia is also were the head office of the ASEAN is located. The main purpose of the foundation were economic upswing, political stability and social progress. In 1976 the first summit of the member countries took place. The commitment of creating an area of peace, freedom and neutrality were made on this summit. In 1984 Brunei became a member as well, followed by Vietnam, Laos, Myanmar and Cambodia during the 90's. In 1992 the Asian Free Trade Area (AFTA) was created. The oldest member states agreed on to offer tariffs which were preferred on trades within the ASEAN. Non-tariff barriers (NTB's) were in talk as well. 1995 the members signed the contract of an nuclear weapon free zone. In 1999 the ASEAN planed an increasing free trade treaty with Australia and New Zealand. A closer relationship on political basis with South Korea, China and Japan were decided afterwards (Lars Pennig, 16.06.2012). The "Asia Crisis" in 1997 had a huge negative influence on the existence of the ASEAN. Since the ASEAN got more and more attractive to foreign investors, the capital going into the ASEAN-region was horrifically high. But when the expectations of the investors did not full fill fast enough, panic appeared. Thailand's currency, the Bath, were sold as quick as possible which again had influence on the other members currency rates. Panic-selling, currency degradation and economic political decisions were the results of a chain reaction. In no time currency's such as stocks and prices lost in value which meant that the ASEAN lost a big part of its capital (Lars Pennig, 16.06.2012). End of 1997 the ASEAN came up with the idea of the "ASEAN vision 2020". The plan was to create "harmony" in social and economic areas 1 between South-East Asian Nations by the year 2020. To fulfill this plan ASEAN many agreements between the member states were made until the early 2000's. Liberalize trade in service, attract ASEAN-based investors, product standardization, increasing and strengthen transportation, such as the supporting the MRA - Mutual Recognition Arrangements, were the main arrangements made. They are all important factors for the integration of the regional economy (wissen.de, n.d.). Later the ASEAN Connectivity were founded, which basically includes the environment of policy, people-exchange and infrastructure on a physical level. In 2002 this integration of regional economy was called AEC - ASEAN Economic Community. The idea behind this name had roots in two directions. First was to give an idea of what the outcome's were. Namely regional cooperation not only in economic interest, dimensions in political and security areas and, an probably important factor for the individual, the foundation and giving of a sense to the identity of South-East Asia. The second directions was to give the world a call, that ASEAN has to be taken seriously and that the AFTA was just the beginning. The EU's economic area as an role model for the ASEAN was decided in 2009. The ASEAN members agreed on to create an economic area similar to the EU's. In 2010 a free trade area (FTA) were founded with China The ARF - ASEAN Regional Forum collaborates with the EU, China, USA and Russia since 1994. The main goal of this collaboration is the avoidance of conflicts in the Asian-Pacific-area (Lars Pennig, 16.06.2012).

1.1 Problem Statement and Research Question

The purpose of this paper is to give the reader an introduction on what exactly the ASEAN is and how their relationship to Japan is important for both sides. It is tried to show the reader an "oversea" example of a collaboration between countries similar to the EU. The central research question of this paper looks as follows: Why is Japan interested in a good relationship to ASEAN? When reading the historical happenings about the ASEANJapan relationship, it can look like that Japan is more important to the ASEAN than the other way around.

1.2 Structure of the Report an Methodology

This paper describes and analyzes the importance of the ASEAN-Japan relationship. It starts with an introduction about what the ASEAN actually is. The reader should have some basically knowledge about the ASEAN to have a better understanding of the written. It continues with the historical background of the ASEAN-Japan relationship. This is also the part where the research question has its roots. It continuous with Japan's foreign policy, since this has important influence on their relationship to ASEAN. Next is a description of the financial initiatives Japan took to support the ASEAN states during the Asia Crisis. Finally are all the findings analyzed to answer the research question. This part is therefore also called "Stability in Asia brings stability in Japan" to give the reader a hint of how this relationship affects both ASEAN and Japan. In the very end a conclusion is made, such as all the references are summarized alphabetically.

2. Theoretical Background

2.1 Japans Relationship to ASEAN

The relationship between Japan and the ASEAN already exist since the foundation of the ASEAN in 1967. Japan had from the beginning an huge impact on the development of the ASEAN, which also build up the fundament of their relationship. Especial in infrastructure social and economic - , power and water systems, investment, trade promotion, such as the human sector, Japan's supporting assistance played an important role (Takashi Shirashi and Takaaki Kojima, 2014). Malaysia and Thailand were the two ASEAN countries were the support was first noticeable. Takeo Fukuda, Japan's prime minister 1977, presented in 1977 the external conventions, Japan planed regarding to the ASEAN relationship. They had three external conventions: 1. Japan abandonments being a military big-power, 2. increasing relationships to ASEAN, 3. Japan and ASEAN as partners on the same level. One year later Japan became the first ASEAN economic partner.

In 2008 the AJCEP was founded. AJCEP stands for ASEAN Japan Comprehensive Economic Partnership Agreement and it since then should support collaboration between both sides, investment and trade (Takashi Shirashi and Takaaki Kojima, 2014).


Excerpt out of 13 pages


Japan's Relationship to ASEAN
University of Southern Denmark
Economics of International Integration
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ISBN (eBook)
ISBN (Book)
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Economics, ASEAN, Japan, International, International integration, International Economics, Asia, foreign relationships, foreign economics
Quote paper
Henrik Fürst (Author), 2014, Japan's Relationship to ASEAN, Munich, GRIN Verlag, https://www.grin.com/document/353529


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