Background & History

Established: 1999

The road to ASEAN Plus 3 (ASEAN+3) began with Malaysia’s proposal in 1991 to create the East Asia Economic Grouping (EAEG) in response to the regional forces represented by NAFTA and the European Community.

EAEG was to be an economic bloc comprising the ten ASEAN members together with China, Japan, and Korea. However ASEAN itself was split on whether its focus should be exclusively on East Asian cooperation rather than more diverse forums such like the Asia Pacific Economic Cooperation (APEC).

In 1993 ASEAN reached a compromise and agreed to form an East Asian Economic Caucus (EAEC) that would function as a separate dialogue for East Asian countries within the APEC process. The dialogue never materialized within APEC, but the idea gained momentum at the 1996 Asia-Europe Meeting. During this meeting the Asian delegation consisted of the ten ASEAN countries and China, Japan, and Korea who held a dialogue among themselves. Over the course of 1997 and 1998 China, Japan, and Korea held meetings to discuss the impact of the Asian Financial Crisis and the potential for cooperation with the ASEAN countries made its way onto the agenda, leading to the formation of the East Asia Vision Group to provide suggestions for avenues of regional cooperation.

In 1999 a joint statement on East Asia Cooperation was released, which is widely regarded as the birth of ASEAN+3.3 The statement professed a commitment to cooperate across a wide range of issues including trade and investment, monetary and financial issues, social and human development, scientific and technical development, cultural understanding and projection, security and stability and any other transnational issue of common concern for East Asia. It also voiced an agreement to intensify coordination and cooperation in other forums, including the United Nations, World Trade Organisation (WTO) and APEC.

ASEAN+3’s first major project, the Chiang Mai Initiative (CMI) was launched in 2000. A response to the need for a mechanism to provide liquidity to stabilise regional currencies during financial crises, CMI commenced as a network of bilateral currency swap arrangements among ASEAN+3 countries.

The intent was to provide a pool of foreign exchange reserves which could be drawn on by the members’ central banks to aid monetary stability, and to supplement the resources available to global institutions playing a similar role - such as the IMF.

Initially the pool was USD64 billion, however, during the Global Financial Crisis the CMI proved insufficient for its purpose, as evidenced by Korea and Singapore seeking liquidity from the U.S. Federal Reserve, and Indonesia seeking it from the People’s Bank of China and the Bank of Japan. This led to the CMI being subsumed by the Chiang Mai Initiative Multilateralisation (CMIM) in 2009.4

The CMIM replaced the CMI’s network of bilateral swap arrangements with a single contractual agreement. Hong Kong was brought into the initiative, and the total size of the fund was increased to USD240 billion. China and Japan each provide approximately 30% of this, and Korea approximately 20%.

In 2001 the East Asia Vision Group released its report to the ASEAN+3 heads of state, calling for the creation of an “East Asian Community”.5 The report made recommendations for cooperation across economic, financial, political, security, environmental, energy, cultural, and educational issues. It also called for the creation of an East Asian Free Trade Area (EAFTA).

The following year the East Asia Study Group delivered a report on what concrete measures could be taken to realise the East Asia Vision Group’s ideas.6 The formation of an EAFTA was again suggested as a medium term goal, as was the “evolution of the ASEAN+3 Summit into an East Asian Summit”. This report also led to the creation of the East Asia Business Council and the East Asia Forum.

The following year the first of a web of bilateral agreements between the ASEAN+3 countries would be signed, the Framework Agreement on Comprehensive Economic Co-Operation Between ASEAN and the People's Republic of China.7 In 2003 the Framework for Comprehensive Economic Partnership between the Association of Southeast Asian Nations and Japan was signed.8 In 2004 the Agreement on Trade in Goods9 was added to the Framework Agreement with China, and in 2005 the Framework Agreement on Comprehensive Economic Cooperation among the Governments of the Member Countries of the Association of Southeast Asian Nations and the Republic of Korea was signed.10

The first East Asia Summit (EAS) was held in 2005 amongst the ASEAN+3 countries and India, Australia and New Zealand (what is known as ASEAN+6), to which the United States and Russia would be added. In this context the idea of an EAFTA was re-labelled the Comprehensive Economic Partnership in East Asia (CEPEA). The role of EAS relative to ASEAN+3 and APEC was not clear and CEPEA has stalled as EAS members have focused their attention elsewhere.

Progress with bilateral agreements continued though, starting with an Agreement on Trade in Goods under the Framework Agreement with Korea in 2006,11 and then an Agreement on Trade in Services with China in 200712 and an Agreement on Trade in Services with Korea later that year.13

In 2007 ASEAN+3 released the Cooperation Workplan 2007-2017, a document outlining its priorities over the coming decade.14 By this point the significance of EAFTA/CEPEA had dissipated and in their place the ASEAN+3 countries made a general and abstract commitment to the notion of an East Asian trade agreement, stating that they would “continue efforts toward promoting and strengthening economic cooperation in the East Asian region, including an idea of region-wide FTAs”15

2008-2009 saw a third wave of bilateral agreements come into force - the Agreement on Comprehensive Economic Partnership among Member States of the Association of Southeast Asian Nations and Japan,16 the Agreement on Investment with China17 and the Agreement on Investment with Korea.18

In 2010 ASEAN+3 established the East Asia Vision Group II (EAVG II) to review progress since 2007, and to make new suggestions. EAVG II presented its report in 2012,19 which largely reiterated the priorities of listed in the Cooperation Workplan, but, significantly, the “idea of region-wide FTAs” had been replaced a recommendation to “proactively support the establishment of a free trade area under the RCEP”.

The Regional Comprehensive Economic Partnership (RCEP) is currently being actively negotiated between the ASEAN+3 countries and the other countries with which ASEAN has trade agreements, including India, Australia and New Zealand.

In this context the ASEAN+6 framework seems to have superseded the ASEAN+3 framework as the chosen vehicle for a truly regional trade agreement, though the bilateral agreements that ASEAN+3 countries have signed have accelerated the progress toward RCEP and provide the legal basis for their cooperation in the meantime.

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