Theorizing ASEAN Integration: Strategic Preferences and the Slow Path of Regional Cooperation

Theorizing ASEAN Integration
Author(s): Min-hyung Kim

Source: Asian Perspective, Vol. 35, No. 3 (July-Sept. 2011), pp. 407-435
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Asian Perspective 35 (201 1 ), 407-435
Theorizing ASEAN Integration
Min-hyung Kim
This article proposes a theory that the strategic preferences of the

Association of Southeast Asian Nations (ASEAN) members should be
a key variable in explaining the ASEAN integration process over the
last four decades. ASEAN integration will not progress as rapidly
and substantially as many of its leaders claim unless there are re-
markable developments in factors that affect the underlying pref-
erences of ASEAN states , such as a significant increase in intra-
ASEAN trade and investment, a much stronger pressure from do-
mestic businesses for deeper integration, or external shocks that
threaten the region's economic growth. While the progressive path
of European integration illustrates that an independent and strong
supranational institution is necessary to handle the complex
processes of regional integration , the strategic-preference theory
of ASEAN integration presented here predicts that this will not be
the top policy priority of its leaders in the near future. Keywords:
ASEAN integration , domestic politics ; economic interdependence ,
international relations theories , strategic preferences.
The Association of Southeast Asian Nations (ASEAN) was estab-

lished in 1967 by five countries (Indonesia, Malaysia, Thailand, the
Philippines, and Singapore).1 Its main objective was to create a "pros-
perous and peaceful community of South-East Asian Nations" (ASEAN
Secretariat 1967). Yet, compared with the depth and speed of regional
integration in other parts of the world, ASEAN's integration - by which
I mean primarily economic integration - has been very slow. Until the
early 1990s there was no significant development toward the goal of
forming a Southeast Asian community. Why has ASEAN integration
lagged behind other regions of the world for so long? And given
ASEAN members' resistance to European Union (EU)-style integration
in favor of an informal and flexible approach, how are we to explain
their relatively recent community-building initiatives to deepen ASEAN
integration - that is, agreements to form an ASEAN Free Trade Area
(AFTA) and an ASEAN Economic Community (AEC)?
407
408 Theorizing ASEAN Integration
While the discussion about ASEAN integration has grown both in

scholarly work (see, for instance, Mattli 1999; Stubbs 2000; Nesadu-
rai 2003, 2006; Tan 2004; Vandoren 2005; Beeson 2005; Yoshimatsu
2006; Fort and Webber 2006; Hew 2007; Jones and Smith 2007;
Ravenhill 2008; Plummer 2009) and in policy circles (ASEAN Sec-
retariat 2003; Severino 2003; Ong 2007, 2008), surprisingly few sys-
tematic attempts have been made to develop new theories about it.
The main goal of this article is, therefore, to fill this gap by provid-
ing a theoretical account for the process of ASEAN integration.
The central thesis here is that extant accounts that simply apply
key insights of general international relations theories to ASEAN in-
tegration (e.g., Grieco 1997; Mattli 1999; Acharya 2006, 2007) are
limited in explaining its process satisfactorily, since without taking
into consideration the region-specific and country-specific contexts
these accounts only highlight various systemic variables. As a result,
they ignore the strategic preferences of ASEAN members that are crit-
ical to understanding political forces of regional integration. Even
more recent accounts that emphasize the regional economy and do-
mestic politics are incomplete. The former (e.g., Lincoln 2004;
Ravenhill 2008; Plummer 2009) do not systematically analyze the
dynamic interplay between the systemic and domestic variables driv-
ing ASEAN integration, whereas the latter (Stubbs 2000; Bowles and
MacLean 1996; Nesadurai 2003) focus on only one case (i.e., AFTA),
rather than examining the ASEAN integration process as a whole.
I contend that ASEAN states' strategic preferences, which are
contingent on both their domestic politics (in particular, ruling elites'
concerns about sovereignty and domestic regime security) and their
level of economic interdependence (i.e., the degree of wiraregional
trade and investment and the exiraregional economic ties of ASEAN
members), should be a key variable in explaining the protracted
ASEAN integration process over the last four decades as well as
ASEAN's recent agreements to deepen integration.
This article is organized as follows. The first section offers an
overview of the ASEAN integration process. The second section ad-
dresses the shortcomings of extant accounts. The third section intro-
duces a strategic-preference theory (SPT) and presents the data
analysis for its key variables in explaining ASEAN integration. The
fourth section deals with ASEAN members' strategic preference shift
Min-hyung Kim 409
regarding regional integration. The final section discusses the impli-

cations of SPT for the study of ASEAN integration and makes pre-
dictions about its future.
An Overview of the ASEAN Integration Process
ASEAN's main purpose, stated in the Bangkok Declaration (found-

ing document), is to accelerate economic growth, social progress, and
cultural development among the members. Despite the declaration's
emphasis on economic and social cooperation, however, ASEAN's
main activities until the end of the Cold War were directed toward
stabilizing the region by "preventing the Balkanization of Southeast
Asia" (Smith 1999, 238-239). In fact, for most ASEAN members,
economic cooperation was a means to achieving political coopera-
tion. Hence, the political will to integrate national markets at the re-
gional level was largely absent until the early 1990s.
A landmark in ASEAN integration was the January 1992 agree-
ment of the ASEAN-6 (the five founding members plus Brunei) to
create AFTA, which officially came into existence in 2002. Given the
virtual absence of regional integration among ASEAN members until
then, this was a remarkable achievement. To many observers, AFTA
symbolized ASEAN's desire to unite the region via economic inte-
gration (Soesastro 2001a, 228).
A more significant step in deepening ASEAN integration was
taken at the 9th Summit in October 2003, when ASEAN members
agreed in the Bali Concord II to create AEC, which was intended to
transform AFTA into a single market by 2020 (ASEAN Secretariat
2003).2 Indeed, this led some observers (such as Pablo-Baviera 2007,
229-230) to argue that AEC indicated ASEAN members' intentions
to move from intergovernmentalism toward supranationalism.
More recently, ASEAN members at the 38th ASEAN Economic
Ministers Meeting in 2006 agreed to accelerate the schedule to
achieve an ASEAN community by 2015. At the 12th Summit in 2007,
they decided to bring forward the goal of ASEAN Socio-Cultural
Community (ASCC) and ASEAN Security Community (ASC) to
2015 from 2020. In addition, they announced that they would develop
an ASEAN Charter to serve as the constitution of ASEAN, thereby
41 0 Theorizing ASEAN Integration
giving it a legal personality and providing the institutional framework

for the member states to work together in a more rules-based envi-
ronment with improved decisionmaking and compliance mechanisms
(Ong 2007). Table 1 summarizes the major developments toward
ASEAN integration for the last forty-four years or so.
Despite this remarkable progress, it is worth emphasizing that the
political will for deepening regional integration is not all that strong.
Indeed, ASEAN members are still very reluctant to pool sovereignty
over some policy areas and delegate it to a regional institution. For in-
Table 1 Major Steps Toward ASEAN Regional Integration
Year Key Agreements and Decisions Event

1967 ASEAN established (Bangkok Declaration) Ministerial Meeting
1 976 ASEAN Secretariat established 1 st Summit
1 977 ASEAN Preferential Trading Agreement (PTA)
1 992 ASEAN Free Trade Area (AFTA) adopted using the
Common Effective Preferential Tariff scheme 4th Summit
1 995 ASEAN Framework Agreement
on Sevices (AFAS) 5th Summit
1996 ASEAN Industrial Co-operation (AICO) 28th AEM Meeting8
1 997 ASEAN Vision 2020 presented 2nd Informal
Summit
1 998 ASEAN Investment Area (ALA) 30th AEM Meeting8
1998 Hanoi Plan of Action (HPA) 6th Summit
1 998 ASEAN Framework Agreement on Mutual
Recognition Arrangement (MRA) 6th Summit
1999 e- ASEAN Framework Agreement 3rd Informal
Summit
2000 Initiative for ASEAN Integration (IAI) 4th Informal
Summit
2003 Declaration of ASEAN Concord II
(Bali Concord II) 9th Summit
2004 Vientiane Action Programme (VAP) 10th Summit
2005 Declaration on the establishment of the
ASEAN Charter (Kuala Lumpur Declaration) 1 1th Summit
2006 Agreed to bring forward the goal of ASEAN
Economic Community to 2015 from 2020 38th AEM Meeting8
2007 Agreed to bring forward the goal of ASEAN
Socio-Cultural Community and Security
Community to 2015 from 2020 12th Summit
Source : OECD Observer, May 2007.
Note: a. AEM Meeting stands for ASEAN Economic Ministers Meeting.
Min-hyung Kim 41 1
stance, despite its claims to be a single market, the AEC has no plan
to set up a common external tariff against nonmembers, which is es-
sential for a customs union. Moreover, the Bali Concord II reaffirms
the fundamental importance of the principles of noninterference and
consensus in ASEAN cooperation.
What explains this low level of political will for (and hence the
protracted process of) regional integration in Southeast Asia? Before
I present my own explanation, the following section addresses the
shortcomings of extant accounts.
Accounting for ASEAN Integration
Several theses have been developed in recent years to explain the

ASEAN integration process. However, most of them simply apply in-
sights of international relations theories to ASEAN integration with-
out paying close attention to region-specific and country-specific
contexts. The "ASEAN Way" thesis may be an exception here in the
sense that it emphasizes regional culture, norms, and identity, but it
also underestimates the constraints and motivations of ASEAN states
in coping with challenges and opportunities in a new strategic envi-
ronment. As a result, these theses provide only incomplete accounts
and thus offer inaccurate predictions about the ASEAN integration
process.
To be more specific, based on the premise that world politics is
essentially a struggle for power among self-interested states pursuing
their own national (as opposed to supranational) interests, realism
(Morgenthau 1948; Waltz 1979) casts doubts about regional integra-
tion in general and its deepening process in particular. Instead, real-
ists stress the distribution of power in the anarchic international
system as a driving force for state behavior. For instance, Michael
Leifer (1989) contends that with a strong disposition against any
supranational tendency, ASEAN is little more than an intergovern-
mental organization that seeks a balance of power within an institu-
tional framework.3 Given its emphasis on the relative power and
sovereignty preservation of states, realism is very skeptical about the
deepening process of regional integration whereby states voluntarily
give up some part of their sovereignty. Hence, Jones and Smith (2007,
159-165) argue that the proliferation of declarations and protocols

that were intended to deepen ASEAN integration, especially after
1997, is largely rhetorical. Since, in their view, these statements have
had no observable impact on the intergovernmental policy practices
of the ASEAN members, they have failed to transform their trade and
investment patterns. The ASEAN states are less interested in regional
community building, it is said, than in the pursuit of their own na-
tional interests.
Nevertheless, a serious (neo)realist attempt to theorize the re-
gional integration process has been made by Joseph Grieco (1996;
1997). Grieco explains the variation in the degree of integration in
three regions - Europe, Latin America, and East Asia - in terms of a
shift in relative capability. He contends that the relative stability of ca-
pabilities among states in the region leads to the deepening of formal
regional institutions, whereas a shift of capabilities disturbs deep in-
stitutionalization because secondary members fear that liberalization
of interstate economic relations will further undermine their political
power relative to that of stronger members. He asserts that "when the
relative disparities in capabilities are shifting over time, disadvan-
taged states will become less attracted to integration, which is there-
fore less likely to occur" (Grieco 1997).
If Grieco 's relative capability shift thesis were correct, we should
expect that if a powerful state accumulates resources that further its
capabilities, secondary states in the region would be increasingly re-
luctant to integrate more closely with it. However, the empirical evi-
dence seems to demonstrate the opposite of Grieco's thesis. In
Europe, integration has advanced despite German unification; in Asia,
the rise of China has made other East Asian states (e.g., South Korea,
Singapore, and Taiwan) more rather than less willing to integrate eco-
nomically with it (Webber 2003, 132). In addition, in the case of
ASEAN, the relative stability of capabilities among its members over
the past four decades has not resulted in the substantial deepening of
integration in Southeast Asia.
Unlike realism, liberalism (in particular, neoliberal institutional-
ism) emphasizes the role of international institutions in facilitating
cooperation among states. By reducing transaction costs and provid-
ing information and enforcement mechanisms, institutions mitigate
the negative consequences of anarchy and allow states to forgo short-
Min-hyung Kim 413
term gains for better future gains (Keohane 1984). Particularly when
assisted by good leadership, these institutions work more effectively
since leaders anticipate problems and induce collaboration among di-
verse stakeholders via effective strategy development and imple-
mentation (Young 1991).
This insight was captured by Walter Mattli, who emphasizes,
among other factors, undisputed regional leadership in deepening the
regional integration process. According to Mattli, successful integra-
tion requires not just demand from market actors but also supply from
political actors - the existence of an undisputed leader among the
group of states seeking closer ties. "Such a state serves as a focal point
in the coordination of rules, regulations, and policies; it may also help
to ease distributional tensions by acting as regional paymaster" (Mat-
tli 1999, 13-14). Germany has played this leadership role for Euro-
pean integration. Mattli contends that the absence of a regional leader
in ASEAN is the main reason for the protracted progress of ASEAN
integration. For the same reason, he is pessimistic about further deep-
ening of integration in Southeast Asia.
Although insightful, Mattli's thesis has several shortcomings.
First, Mattli underscores the preconditions for integration in different
regions. This is problematic because he simply assumes that further
integration will automatically follow if some necessary conditions are
fulfilled. However, this is not the case even in European integration.
Regional integration typically involves redistributional politics and
thus creates winners and losers both domestically and internationally.
Therefore, what is also important is the political will of states to move
integration forward. Second, Mattli measures the success of integration
efforts in terms of the accomplishment of stated goals. However, this
analysis does not provide an explanation of interregional variations in
the scope of these stated goals due to the lack of attention to the pref-
erences of states in different regions. Third, although Mattli empha-
sizes the existence of a regional leader as a supply condition for deeper
integration, he offers no explanation of striking differences between
potential and actual regional leadership (Webber 2003, 129). For ex-
ample, despite its potential to be a regional leader in East Asian inte-
gration, Japan has not played a leadership role. Indonesia under
Suharto was a major player in ASEAN integration, but its role was not
comparable to Germany's in European integration.
Contrary to the rationalist accounts mentioned above, social con-

structivism stresses the role of culture, norms, and identity in ex-
plaining state behavior in international society (Katzenstein 1996;
Wendt 1999; Acharya 2004). As for ASEAN integration, many con-
structivists assert that unlike European integration in which formal
rules and regulations have played an important role, ASEAN inte-
gration has been driven by informal ASEAN norms - musjowarah
(consultation) and mufakat (consensus) - and principles - noninter-
ference in domestic affairs, respect for national sovereignty and in-
dependence, and the avoidance of controversial issues (Acharya 1997;
Busse 1999). Simply put, this so-called ASEAN Way thesis high-
lights the role of norms, practices, and a common collective identity
(i.e., ASEAN identity) in explaining the ASEAN integration process.
There is no question that the constructivist scholarship has made
a significant contribution to the understanding of institutional devel-
opment as well as international relations in Southeast Asia. Never-
theless, the explanatory power of the ASEAN Way thesis for ASEAN
integration is limited for several reasons. First, by highlighting the
ASEAN Way as a manifestation of cultural dispositions toward in-
terstate cooperation in the region, and by paying little attention to the
domestic politics of ASEAN members and the structure of global po-
litical economy, the thesis has a hard time explaining the change in the
ASEAN integration process. For instance, it does not convincingly
account for ASEAN states' recent initiatives to move integration for-
ward. Despite the persistence of ASEAN norms and principles,
ASEAN members recently agreed to launch AFTA and AEC. Second,
if the constructivists' claim (e.g., Acharya 2000) were correct that an
ASEAN identity has come into being through consistent interactions
among ASEAN members over the past four decades, we should be
able to witness much faster and deeper integration in Southeast Asia.
Indeed, research on European integration (see, for example, Hooghe
and Marks 2004; Mayer and Palmowski 2004; Caporaso and Kim
2009) suggests that the existence of a common collective identity (we-
feeling) works as a catalyst for expediting the integration process. In
contrast, what we witnessed from the Asian economic crisis of 1997-
1998 is not an emerging ASEAN identity but the vulnerability of
ASEAN's collective identity, if ever it existed, in the face of regional
crises (Ruland 2000, 438-439).
Min-hyung Kim 415
Finally, more recent accounts that stress the regional economic

structure (e.g., Lincoln 2004; Ravenhill 2008; Plummer 2009) provide
an insightful economic analysis of ASEAN integration but tend to un-
derestimate the role of political forces that push forward or hold back
the integration. On the other hand, several domestic politics-minded
accounts (e.g., Stubbs 2000; Bowles and MacLean 1996; Nesadurai
2003) pay close attention to some domestic factors (e.g., the shift in
the domestic balance of power from economic nationalists to liberal
reformers in core ASEAN states, the increasing role of reform-minded
domestic businesses, or the tussle between growth and redistribution in
elite governance systems) in explaining a regional economic coopera-
tion case such as the evolution of AFTA. But these studies do not sys-
temically analyze how domestic factors are affected by systemic forces
in the context of the ASEAN integration process as a whole.
Strategic-Preference Theory and ASEAN Integration
The Primacy of Economic Interdependence

and Domestic Politics
Given the shortcomings of extant accounts for ASEAN integration, I

present an alternative theory that stresses ASEAN members' strategic
preferences. Building on a strategic-choice approach (Lake and Pow-
ell 1999), strategic preferences here are defined as states' primary
goals in determining possible outcomes. Strategic preferences drive
state behavior in ways that are contingent on the strategic environ-
ment. Strategic -preference theory (SPT) posits that ASEAN mem-
bers' strategic preferences concerning regional integration are largely
shaped by two factors: their economic interdependence and their do-
mestic politics.
Economic interdependence (a systemic and economic variable)
is measured here by the degree of /fraregional trade and investment.
If the level of intraregional trade and investment is high, ASEAN
members will favor deeper integration, since it requires common rules
and policy harmonization to regulate huge cross-border economic
transactions. The higher the degree of intraregional trade and in-
vestment, the stronger the political will for deeper integration among
ASEAN members. What is important to emphasize here is that the

term "strategic" in SPT implies that ASEAN members' preferences on
regional integration are not fixed ( exogenous ) but change over time
(endogenous). They respond relatively quickly not just to the degree
of economic interdependence among themselves but also to external
shocks, such as a global or regional economic crisis or a sudden shift
in the structure of global political economy that threatens their eco-
nomic growth and political stability, that is, regime security. As
Frieden (1999, 62) notes, "If theories about preferences are accurate,
they explain variation over time as well as across units."
The major domestic factors (i.e., domestic and political variables)
that shape ASEAN members' strategic preferences on regional inte-
gration are ruling elites' concerns about national sovereignty and their
own regime security. First, it is important to emphasize that most
ASEAN members (except for Thailand) were colonies of Western pow-
ers and became independent only after World War H. Hence, deep con-
cerns about the "sovereignty costs" generated from a shared history of
colonialism are embedded in the domestic politics of ASEAN mem-
bers (Kahler 2000, 561). Second, it is worth noting that most ASEAN
states are not liberal democracies but authoritarian regimes, although
some of them are at early stages of the democratic transition process.
Unsurprisingly, ASEAN leaders are less willing to accept the compro-
mise of their power and authority by an external entity. This means that
ASEAN members are likely to favor deeper integration only when it is
perceived as enhancing their sovereignty and regime security. Put dif-
ferently, they are unlikely to pool and delegate policy autonomy to a
supranational institution if it is perceived as a threat to their sovereignty
and regime security. Thus, the more regional integration is perceived as
enhancing sovereignty and domestic regime security, the stronger the
political will for deeper integration among ASEAN members.
Taking both domestic politics and economic interdependence se-
riously, SPT posits that ASEAN states are careful to choose a regional
integration scheme (which best suits their goal of securing sover-
eignty and domestic regime survival) and try to increase their lever-
age by controlling both the scope/depth and the speed of integration.
These strategic preferences change over time in response to changing
domestic and international circumstances and bring about major shifts
in the course of regional integration.
Min-hyung Kim 417
SPT here shares several main assumptions with liberal intergov-

ernmentalism (Moravcsik 1998), which combines key insights of in-
tergovernmentalism with liberal theory regarding state preference
formation in explaining European integration. First, both theories take
member states' preferences as the main explanatory variable for inte-
gration outcomes. Second, integration in both cases is defined as a
process in which states identify a series of underlying preferences first,
bargain on substantive agreements next, and finally choose appropri-
ate international institutions in which those agreements are embedded.
Nevertheless, SPT departs significantly from liberal intergovern-
mentalism. Above all, liberal intergovernmentalism is basically a the-
ory of European integration that "exemplifies a distinctly modern
form of power politics, peacefully pursued by democratic states for
largely economic reasons through the exploitation of asymmetrical
interdependence and the manipulation of institutional commitments"
(Moravcsik 1998, 5, emphasis added). In contrast, SPT contends that
for developing countries where democracy does not take a firm root,
strategic preferences concerning regional integration count more on
sovereignty costs and their effects on political stability and economic
growth, both of which are central to regime security.4
Moreover, SPT does not confirm Moravcsik's assertion that eco-
nomic interests are almost always the fundamental sources of national
preferences on regional integration. Keen attention to the domestic
politics of ASEAN members leads SPT to put more emphasis on po-
litical interests (but without underestimating economic interests) in
the formation of strategic preferences. Hence, SPT points out that re-
gional integration schemes such as ASEAN, the Organization of
African Unity, and the Arab League are attractive for the states in
those organizations not simply because such schemes expand their
economic interests but also because they enhance the sovereignty of
their members, maximize the values of independence, and avoid the
problems inherent in both nationalist isolation and ambitious unifi-
cation (Nye 1971, 21-22). Indeed, in the case of ASEAN, which is
composed of small, weak, and authoritarian states, political interests
(e.g., preserving sovereignty, national cohesion, and identity; secur-
ing domestic regime survival) quite often trump economic interests in
forming its members' strategic preferences and determining the
course of regional integration.
The Role of Economic Interdependence
When it comes to economic interdependence, despite their geo-

graphical proximity, ASEAN members (contrary to the members of
the North American Free Trade Agreement [NAFTA] and the EU) do
not have a long history of heavy intraregional trade (Lincoln 2004,
168). Instead, they have traditionally had strong trade and investment
ties with developed countries in the Western world. Hence, by the
early 1990s, intra-ASEAN trade was no more than 19 percent of
ASEAN's total trade (see ASEAN Statistics). In fact, excluding Sin-
gapore's trade with Indonesia and Malaysia, intra-ASEAN trade was
only 4 percent of ASEAN's total trade (Stubbs 2000, 300-301).
The direction of trade did not change significantly even after the
signing of AFTA. For instance, ASEAN-6 extraregional exports and
imports from 1993 to 2004 exceeded ASEAN-6 intraregional ex-
ports and imports by about four times (see ASEAN Statistical Year-
book, 2005). 5 Similarly, Table 2 provides recent data on the share of
intra- and extra- ASEAN trade to each member's trade total. It shows
that extra- ASEAN trade still exceeds intra-ASEAN trade by three
times.
In addition, Table 3 shows that in December 2006 the share of
Table 2 Intra- and Extra-ASEAN Trade, 2006 (percentage of country total)
Exports Imports Total Trade

Intra- Extra- Intra- Extra- Intra- Extra-
Country ASEAN ASEAN ASEAN ASEAN ASEAN ASEAN
Brunei 24X) 76X) 49J 509 28 TL2
Cambodia 4.7 95.3 36.4 63.6 19.8 80.2
Indonesia 18.5 81.5 30.0 70.0 23.1 76.9
Laos 84.8 15.2 54.6 48.4 58.2 41.8
Malaysia 26.1 73.9 25.5 74.5 25.8 74.2
Myanmar 49.9 50.1 54.9 45.1 51.6 48.4
Philippines 17.3 82.7 18.7 81.3 18.1 81.9
Singapore 31.3 68.7 26.1 73.9 28.9 71.1
Thailand 21.8 78.2 18.3 81.7 20.0 80.0
Vietnam 17.6 82.4 27.4 72.6 22.8 77.2
ASEAN 25.3 74.7 24.5 75.5 24.9 75.1
Source: ASEAN Statistics, www.aseansec.org/1
Min-hyung Kim 419
total ASEAN trade of the top five external ASEAN trade partners
(United States, Japan, European Union, China, and South Korea) was
49.9 percent, which was about twice that of intra- ASEAN trade (24.9
percent).
Thus, it is not surprising that contrary to NAFTA, which led to an
increase of 71.5 percent in intra-NAFTA trade between 1995 and
2000, the bold steps toward AFTA increased intra- ASEAN trade only
by 23.08 percent in the same period. In fact, a more recent study
shows that the total amount of ASEAN trade or welfare gains will in-
crease three times greater under an MFN (most favored nation) lib-
eralization of ASEAN trade with the world than under the AFTA plan
(Tan 2004, 947-948). Hence, Narine (2002, 5) asserts that "the trade
of most ASEAN states remains oriented toward the global market,
and this is unlikely to change soon." After all, the real objective of the
formation of FTA was not to stimulate intra- ASEAN trade per se
but to increase their competitiveness and integration with the world
economy.
The AFTA agreement has not led to a significant increase in intra-
Table 3 Top Ten ASEAN Trade Partners, December 2006

(share in percentage)
Trade Partner Exports Imports Total Trade

ASEAN 25.3 24.5 24.9
United States 14.3 10.6 12.6
Japan 11.2 14.1 12.6
European Union (25) 12.5 10.3 11.5
China 8.1 10.6 9.3
Republic of Korea 3.8 4.1 3.9
Australia 3.0 2.0 2.6
India 2.3 1.4 1.9
Taiwan 1.3 2.0 1.6
Hong Kong 2.1 1.0 1.6
Total top ten trade
partner countries 83.9 80.5 82.3
Others 16.1 19.5 17.7
Total trade partner

countries 100.0 100.0 100.0
Source: ASEAN Statistics, www
ASEAN foreign direct investment (FDI) either. For example, extra-

ASEAN FDI inflows far exceeded intra-ASEAN FDI inflows be-
tween 1995 and 2004 due to the major ASEAN members' strong
external ties with the industrialized countries of the Organization for
Economic Cooperation and Development (OECD), as Figure 1
demonstrates.
Figure 2 presents FDI inflows to ASEAN by source country for
the period between 1995 and 2004. It reveals that non- ASEAN mem-
bers were indeed major contributors to ASEAN FDI inflows. In par-
ticular, the figure illustrates that the share of FDI inflow to ASEAN
from the EU- 15, the United States, and Japan far exceeds that of intra-
ASEAN FDI inflows (60.3 percent and 13.0 percent, respectively).
Thus, quite understandably, ASEAN member states have upheld
the principle of "open regionalism" instead of creating a "fortress
ASEAN" similar to the EU. They have sought to enhance ASEAN's
competitive edge as a production base for the world market by facil-
itating the flow of FDI into the region. As Nesadurai (2003, 177) ar-
gues, open regionalism for ASEAN states is a means to influence the
worldwide allocation of FDI and redirect it to the ASEAN region.
Figure 1 Extra- and Intra-ASEAN FDI Inflows, 1995-2004
Source: ASEAN Statistical Yearbook, 2005 (Jakarta: ASEAN Secretariat).
Min-hyung Kim 421
Figure 2 FDI Inflows to ASEAN by Source Country, 1995-2004
Source: ASEAN Statistical Yearbook, 2005 (Jakarta: ASEAN Secretariat).
While critical, however, these economic (and systemic) variables

alone are incomplete in explaining ASEAN members' strategic pref-
erences (i.e., an absence or a very low level of political will) for re-
gional integration. Domestic political variables should also be taken
into account to fully understand ASEAN members' strategic prefer-
ences on regional integration. In many cases, these political interests
play a more significant role than economic interests in shaping
ASEAN members' strategic preferences and consequently driving the
integration process.
Domestic Political Variables
First, it is crucial to note that because of a shared colonial experience,

most ASEAN states are extremely sensitive to the issue of sover-
eignty. Indeed, from the outset ASEAN has displayed a deep com-
mitment to preserving sovereignty; its members have been unwilling
to surrender their sovereignty to any regional institution of a supra-

national type. In Soesastro's view, "ASEAN's survival has been partly
due to the reluctance to transform the organization into a suprana-
tional body" (Soesastro 2001b, 278). Hence, securing sovereignty
through regional cooperation and effective nation building has almost
always been ASEAN members' top priority in their strategic prefer-
ence formation on regional integration. In practice, this means that
even when ASEAN members expect great national benefits through
closer economic cooperation, they often sacrifice them if it is per-
ceived to threaten their sovereignty.
The sensitivity of ASEAN members to sovereignty preservation
has been demonstrated in several ways in recent years. First, they
have made no recourse whatsoever to a 1996 protocol on dispute set-
tlement. Second, under Article 20 of the new ASEAN Charter, they
have granted only limited support for the Enhanced Dispute Settle-
ment Mechanism adopted in 2004, which emphasizes the traditional
state-centric approach. Third, they have been unwilling to provide the
ASEAN secretariat with the resources necessary for carrying out its
responsibility (Ravenhill 2008, 478^480). And fourth, the members
have reaffirmed the "ASEAN Way" principles (in particular, respect
for national sovereignty and noninterference in domestic affairs) even
in the ASEAN Charter and the Declaration of Bali Concord II, where
ASEAN members agreed to form social and cultural, security, and
economic communities (the ASCC, ASC, and AEC, respectively),
groupings that go far beyond regional economic integration.
All these actions illustrate that ASEAN states are unwilling to
compromise their sovereignty for economic interests through regional
integration, unless they are critical for regime survival. This is be-
cause for them, paradoxically, regional integration is a means to se-
curing (as opposed to pooling) national sovereignty by becoming
economically more competitive and politically more powerful in the
increasingly interdependent world.
It is also worth emphasizing that ASEAN members' reluctance
to deepen integration has much to do with their concerns about do-
mestic regime security. Although ASEAN leaders share, to some ex-
tent, the perception that deeper integration could revitalize ASEAN's
economy by maximizing the complementarities among ASEAN
members and by increasing the level of intraregional trade and in-
Min-hyung Kim 423
vestment, their political will for it cannot be strong if it is perceived

to threaten their regime survival. Indeed, ASEAN leaders are very
much aware of the costs that deeper integration may generate for
regime security. For instance, deeper integration through the creation
of a single market can threaten the survival of authoritarian ASEAN
regimes by locking them into radically liberal economic reforms that
incumbent ruling elites (whose clientelist regime-support networks
prefer only incremental and selective liberalization and privatization)
cannot afford. This has been demonstrated by the reluctance of Cam-
bodia, Laos, Myanmar, and Vietnam (the CLMV countries) in im-
plementing AFTA's Common Effective Preferential Tariff (CEPT)
scheme, which will not only make them lose substantial amount of
customs revenue from ASEAN imports but will also generate huge
social costs for structural adjustments (Tongzon and Khan 2005).
In addition, a number of studies (for instance, Narine 2002; Yoshi-
matsu 2006; Nesadurai 2009) reveal that most ruling elites of ASEAN
regard the delegation of policy autonomy to an independent suprana-
tional institution as harmful. Despite the fact that deeper integration
may improve regional security by raising the opportunity costs of war
through tighter economic interdependence, these elites believe that a
supranational institution might endanger national cohesion and po-
litical stability. ASEAN members' concerns about domestic regime
security are such that when it comes to pursuing regional integration,
leaders ought to balance the goals not just between regional economic
integration and global economic integration but also between regional
security and domestic regime survival.
Other Explanatory Factors
There are some other economic (and domestic) variables that deserve
credit in explaining the protracted ASEAN integration process. To
varying degrees, however, these are also linked (directly or indirectly)
to the issues of sovereignty and domestic regime security. First, it is
worth noting that there is a significant variation among ASEAN mem-
bers in the level of external tariffs against nonmembers, ranging from
0.1 percent for Singapore to 43.2 percent for Thailand. This implies
that Singapore's strategic preferences on common external tariffs for
a common market are hard for other members to match. For instance,
contrary to Singapore, Indonesia's ruling elites have feared that lower

(or no) tariffs through AFTA and AEC could result in a flood of
cheaper regional products into the country, generating electoral pres-
sures and hurting its competitiveness both regionally and globally
(Smith 1999, 238-243). Likewise, the CLMV countries, which are
characterized by weak infrastructure, a need to protect their infant do-
mestic industries for economic development, less open political sys-
tems, low levels of economic development, and little experience in
participating in regional institutions, have been very reluctant to open
up their domestic markets (Wesley 1999, 69). The significant varia-
tion among ASEAN members in the level of external tariffs explains
ASEAN's reluctance to move from AFTA to a true customs union,
which would entail a surrender of some degree of national sovereignty
that most ASEAN leaders cannot afford at the moment (Tan 2004,
946). As Cambodia's situation suggests - it derives about 70 percent
of its government income from import-related taxes - tariffs are a
major source of government revenues for most ASEAN members.
It is also important to point out that at least before the imple-
mentation of AFTA agreements, domestic demands for regional inte-
gration were weak, whereas pressures from state-owned firms and
private businesses intimately connected to political elites for protec-
tion against regional competition were very strong (Jayasuriya 2004).
Examples are Indonesia's military-linked businesses and a small inner
circle of ethnic Chinese konglomert, Malaysia's clientelisi business
networks and a group of Malay entrepreneurs, and Thai business ty-
coons backed by bureaucrats and the military. Given the critical role
of these groups' support for regime survival, authoritarian ASEAN
leaders had vigorously pursued economic policies that protected and
maximized these groups' interests. Moreover, in several ASEAN
states there is a fear that politically important industries (e.g., agri-
culture in Thailand and Indonesia, automobiles in Malaysia, petro-
chemicals in the Philippines and Thailand, textiles in Cambodia and
the Philippines) will not be able to withstand regional competition.
They also fear that other member states might not fulfill their com-
mitments to a single market due to the absence of an effective en-
forcement mechanism and a credible dispute settlement institution
(Severino 2003, 479). This fear was exemplified by Indonesia's and
Malaysia's recent backtracking on their trade liberalization commit-
Min-hyung Kim 425
ment in politically important sectors such as automobiles, petro-

chemicals, and agriculture (Nesadurai 2006, 5).
The analysis so far has focused on explaining the major causes of
the protracted process of ASEAN integration as a whole. In the fol-
lowing section, I account for the shift in ASEAN members' strategic
preferences on regional integration. That is, given the low degree of
intraregional trade and investment as well as deep concerns about
regime security and sovereignty costs among ASEAN members, how
do we explain ASEAN 's initiatives to move integration forward with
AFTA and AEC in the first place? What explains their strategic pref-
erence shift?
Strategic Preference Shift and the

Deepening of ASEAN Integration
As described earlier, SPT posits that strategic preferences shift in the

process of regional integration in response to changing international
and domestic circumstances - in particular when these changes are
perceived as threatening economic growth and political stability.
Below I address the major changes at both the international and do-
mestic levels that have affected the shift in ASEAN members' strate-
gic preferences on regional integration. The shift led to agreements on
the creation of AFTA and AEC.
At the international level, the end of the Cold War forced ASEAN
to find a new rationale for its own existence. Above all, ASEAN states
were worried that Western capitalist countries might diminish trade
and investment ties with them (Ariff 2001, 45). Given the devastat-
ing consequences of reduced economic ties with Western capitalists
for the ASEAN states' economic development and growth, closer eco-
nomic cooperation among them became crucial. While the existence
of the Cold War structure was a pivotal spur to European integration,
its collapse removed one of the most important obstacles to regional
integration in Southeast Asia (Beeson 2005, 981). The need for closer
economic cooperation among ASEAN members was reinforced by a
new wave of regionalism in this period, demonstrated by the US-
Canada Free Trade Area agreement (the predecessor of NAFTA),
Asia-Pacific Economic Cooperation (APEC), Mercosur (Southern
Common Market) in Latin America, and the European Union. Along

with increasing dissatisfaction with the various ASEAN economic co-
operation schemes by the early 1990s, the fear of being left behind in
the global trend of regionalism provoked the shift in ASEAN mem-
bers' strategic preferences on regional integration, since the new trend
was perceived as enhanced protectionism that was likely to threaten
the region's sustained economic growth.
The rise of China as a main alternative location for global FDI
also provided ASEAN members with a strong incentive to form a uni-
fied market in Southeast Asia (Bowles 1997, 224). Fear of investment
diversion rather than trade creation was the basis of this incentive:
China's rise was seen as a primary cause of ASEAN's substantial re-
duction in FDI inflow since the early 1990s (UN Conference on Trade
and Development 2006). A larger unified market through the free
movement of resources, goods, and services was believed to make it
easier for the small economies of ASEAN to attract more FDI and
signal a credible commitment to extraregional investors (Soligen
1999, 35). Given the pivotal role of FDI in ASEAN members' eco-
nomic growth and ultimately their political stability since the mid-
1970s, China's rapid ascent (and the rise of India more recently) as an
FDI competitor presented a huge challenge and contributed to a shift
in their strategic preferences on regional integration.
The Asian financial crisis of 1997-1998 - from which major
ASEAN members such as Thailand, Indonesia, Malaysia, and to a
lesser extent the Philippines, seriously suffered - also affected
ASEAN members' strategic preferences. Most notably, one of the
world's most durable authoritarian regimes (Suharto's New Order in
Indonesia) collapsed due to the crisis. The Chavalit government in
Thailand also fell, although Malaysia's Mahathir regime managed to
survive (see Pepinsky 2009). After the crisis, many ASEAN leaders
came to see the formation of an economic community as a way to
avoid a similar future crisis (Breslin and Higgott 2003, 170-171) that
would threaten regime survival. Thus, contrary to the popular per-
ception that the financial crisis would derail AFTA's implementation
process, ASEAN members advanced the AFTA deadline by one year
from 2003 to 2002 in the middle of the crisis.
In addition to these international forces, several domestic forces
also provoked ASEAN members' strategic preference shift regard-
Min-hyung Kim 4 27
ing regional integration. Most important among them was the per-
ception of ASEAN leaders that AFTA and AEC could not only en-
hance their bargaining position in trade negotiations with the major
powers, it could also contribute to sustaining economic growth by at-
tracting more FDI into the region. Given that many authoritarian
leaders in ASEAN still maintain regime legitimacy through output
effects such as economic growth, political stability, and containment
of ethnic or minority tensions (Ferguson 2004, 400-401), 6 positive
expectations about the national benefits of regional integration (Kim
2010, 325) encouraged ASEAN members to agree to move integra-
tion forward.
In addition, ASEAN states' need to expand domestic (as opposed
to foreign) capital through regionalization had a significant impact
on their strategic preference shift. Domestic capital plays a critical
role both as a source of economic growth and as a key mediator in
elite business relations in core ASEAN states (Nesadurai 2003, 1 16-
124). ASEAN's decision to privilege ASEAN investors in the ASEAN
Investment Area (AIA), which was proposed by Malaysia and sup-
ported by Indonesia; Singapore's Regionalization 2000 policy; and
Thailand's firm commitment to AFTA all were intended to nurture
emerging domestic capital and make it globally competitive through
regionalization rather than through globalization.
Finally, pressure from the ASEAN business community as well as
from liberal reformers in core ASEAN states (i.e., Indonesia,
Malaysia, Thailand, and the Philippines) to hasten the process of re-
gional economic cooperation in recent years also affected the shift in
ASEAN's strategic preferences on regional integration. Despite its
marginal effect on the increase of intraregional trade (e.g., from about
20 percent to 25 percent between 1992 and 2002), AFTA has indeed
influenced corporate decisionmaking, business operations, and firms'
regional production strategies in Southeast Asia. Recognizing that dif-
ferences in business regulations, varying product standards, and
weaknesses in customs clearance prevent regional businesses from
taking advantage of AFTA tariff preferences, domestic businesses in
regionally integrated, export manufacturing sectors - e.g., electrical,
electronics, telecommunications equipment, and food manufacturing
- have increasingly pushed for a seamless integrated regional market
(Stubbs 2000, 308-312; Nesadurai 2006, 23-24). ASEAN ruling
elites in most countries took the interests of these domestic businesses

seriously because by the 1990s business support became crucial to
maintaining their political power base (Nesadurai 2003, 44; Stubbs
2000, 308).
In sum, ASEAN members' expectations about the national bene-
fits of further integration as well as internal and external forces that
threatened domestic regime security since the late 1980s brought
about their strategic preference shift regarding regional integration
and ultimately led to the agreements on AFTA and AEC.
Conclusion
This study has sought to theorize ASEAN integration not just in its
own regional context but by locating it within a larger context of the
global political economy. In the absence of a theory of ASEAN inte-
gration in the literature, it has called for a theoretical framework that
takes into account both the structure of economic interdependence
and the domestic politics of ASEAN members. However, it is impor-
tant to emphasize that what has been attempted here is only a begin-
ning of theorizing ASEAN integration in an international political
economy perspective. Further research will have to be conducted to
fully examine the specific process by which domestic politics shapes
the strategic preferences of individual ASEAN states. Greater atten-
tion also needs to be paid to the mechanisms by which external shocks
or changes in the structure of global and regional political economy
generate pressures for a shift in ASEAN members' strategic prefer-
ences on regional integration. I conclude below with SPT's predic-
tions about the future of ASEAN integration as well as the theory and
policy implications of research findings.
It is still unclear whether ASEAN is ready to take the necessary
operational steps for deeper integration. In fact, the increasingly in-
dependent recourse by ASEAN members (in particular, Singapore
and Thailand) to bilateral trade arrangements with external states (e.g.,
Japan, Australia, South Korea, and the United States) in recent years
seems to illustrate their weak political will for, as well as discontent
with, the progress of ASEAN integration. In addition, the ASEAN+3
mechanism whereby ASEAN sought to expand regional economic
Min-hyung Kim 429
cooperation with the major Northeast Asian states (China, Japan, and
South Korea) has actually slowed ASEAN integration by skewing re-
gional trade and investment away from Southeast Asia and especially
toward China.7
Nevertheless, ASEAN states have shared the need for further in-
tegration at least in principle and in framework agreements. More-
over, they have recently delineated clearer goals for a unified market
and agreed to delegate some degree of policy authority to a regional
institution by adopting more rules-based systems as well as strength-
ening enforcement mechanisms to ensure the implementation of
agreements (Yoshimatsu 2006, 127; Ong 2008).
It should be stressed, however, that ASEAN members are unlikely
to surrender national sovereignty for a "fortress Southeast Asia" in
the near future. ASEAN's upholding of the ASEAN Way of decision-
making and a minimum level of institutionalization at the moment in-
dicate that a strong political will to move beyond a free trade area is
still missing in Southeast Asia. Hence, unless there are remarkable
developments in factors that affect the underlying preferences of
ASEAN members (e.g., a significant increase in intra-ASEAN trade
and investment, a much stronger pressure from domestic businesses
for deeper integration, external shocks that threaten the region's eco-
nomic growth, or a domestic leadership change that allows liberal
coalitions to aggressively pursue integration agendas), ASEAN inte-
gration will not progress as rapidly and substantially as many ASEAN
leaders claim.
What are some policy implications of the research findings here?

The European integration model cannot simply be copied in South-
east Asia, due to their different systemic (regional as well as global)
and domestic circumstances. Indeed, inasmuch as the EU model is
based on intraregional trade and investment among wealthy indus-
trialized democracies with highly developed market structures, it
seems even less applicable in Southeast Asia where states have
strong extraregional trade and investment ties with underdeveloped
market structures (Sbragia 2008, 43). Nevertheless, it is important
to note that the member states of both the EU and ASEAN face sim-
ilar challenges and opportunities in an increasingly interdependent
world, such as maintaining regional stability and peace, and en-
hancing regional economic competitiveness (Higgott 1998, 42).
Therefore, if ASEAN states are serious about realizing their goal of

creating a Southeast Asian community via ASEAN integration, they
could draw some lessons from the experience of European integra-
tion since the EU, as the world's most advanced regional integration
scheme, has undergone several ups and downs of integration over
the past five decades.
Above all, ASEAN members may have to reexamine ASEAN 's
negotiating principles and recognize the obstacles their minimalist
and reactive approach (Ferguson 2004, 399) presents for deeper inte-
gration and institution building. While there is no doubt that ASEAN's
habit of dialogue and consensus-based decisionmaking have proved
useful in compromising differences, harmonizing divergent interests,
and managing conflicts among its members (Ariff 2001, 65; Soesas-
tro 2001b, 281), they seem to be a poor guide in coping with a num-
ber of challenges that require quick, organized responses to sudden
major developments such as the Asian financial crisis. Nevertheless,
the SPT presented here predicts that ASEAN leaders will not abandon
ASEAN's negotiating principles anytime soon, because those princi-
ples actually help ASEAN states protect their sovereignty and regime
security by effectively controlling the scope, depth, and speed of in-
tegration in the region.
Another important lesson that can be drawn from European inte-
gration is that an independent and strong supranational institution is
necessary to facilitate the effective handling of the complex processes
of regional integration. Indeed, the development trajectory of Euro-
pean integration illustrates that deeper integration is almost impossi-
ble without some transfer of national sovereignty to a supranational
institution. In the ASEAN context, this primarily means greater in-
stitutional development through establishing an effective dispute set-
tlement mechanism. That specifically means shifting away from the
ASEAN Way of decisionmaking - based on the principles of con-
sensus and consultation, which require near-unanimity - toward a
qualified majority voting (i.e., pooling sovereignty) on key integration
issues. As illustrated earlier in the discussion about the ASEAN Char-
ter and the Declaration of Bali Concord E, however, SPT here predicts
that a change in decisionmaking principles will not be the top policy
priority of ASEAN states in the near future. A weak regional institu-
tion and flexibility in the implementation process of AFTA and AEC
Min-hyung Kim 43 1
have been the keys to keeping these projects alive by safeguarding

the interests of politically influential domestic businesses while sus-
taining economic growth, which is critical to regime survival.
In sum, the protracted process of ASEAN integration is neither
simply an indication of a Southeast Asian cultural antipathy toward
strong supranational institutions nor the consequence of weak re-
gional leadership or a shift in relative capabilities among its mem-
bers. Rather, it reflects the fact that ASEAN states currently do not
share a strategic preference to sacrifice their sovereignty to an inde-
pendent supranational body.
Notes
Min-hyung Kim is assistant professor in the Department of Political Science at

Illinois Wesleyan University. His research interests include international rela-
tions theory, international political economy, Asian regionalism, and European
integration. His articles have appeared in the International Political Science Re-
view and the Journal of European Public Policy. He was a Jean Monnet Fellow
(2009-2010) of the Robert Schuman Centre for Advanced Studies at the Euro-
pean University Institute, San Domenico, Italy. He can be reached at
mkim2@ iwu.edu.
1 . The membership has been expanded, and ASEAN now has ten members,
including: Brunei, which became a member in 1986; Vietnam (1995); Laos and
Myanmar (1997); and Cambodia (1999).
2. Along with the AbC, which aims to be a single market and production
base with a free movement of goods, services, investments, technologies, and
skilled labor, the Bali Concord II created two other pillars - the ASEAN Secu-
rity Community (ASC) and the ASEAN Socio-Cultural Community (ASCC) -
as the components of the ASEAN Community.
3. Also challenging the idea of an ASEAN security community, Khoo
(2004) contends that a form of realist institutionalism most accurately explains
ASEAN 's history.
4. Of course, this is not to suggest that economic growth and political sta-
bility are unimportant for industrialized democracies. My point is that for many
authoritarian leaders in Southeast Asia these are more critical factors than in Eu-
rope for regime survival.
5. Put differently, intra- ASE AN trade as a percentage of total ASEAN trade
since the launch of AFTA increased very modestly - from 18.9 percent in 1990
to 25 percent in 2005 (ASEAN Statistics).
6. This is the so-called performance legitimacy. See Alagappa (1995, 330)
and Nesadurai (2003, 44).
7. For a quick analysis of increasing trade and investment ties between
ASEAN and China, see Kang (2008, 132).
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Theorizing ASEAN Integration: Strategic Preferences and the Slow Path of Regional Cooperation

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Theorizing ASEAN Integration

Author(s): Min-hyung Kim

Theorizing ASEAN Integration

This article proposes a theory that the strategic preferences of the

The Association of Southeast Asian Nations (ASEAN) was estab-

While the discussion about ASEAN integration has grown both in

regarding regional integration. The final section discusses the impli-

An Overview of the ASEAN Integration Process

ASEAN's main purpose, stated in the Bangkok Declaration (found-

giving it a legal personality and providing the institutional framework

Table 1 Major Steps Toward ASEAN Regional Integration

Year Key Agreements and Decisions Event

Accounting for ASEAN Integration

Several theses have been developed in recent years to explain the

159-165) argue that the proliferation of declarations and protocols

Contrary to the rationalist accounts mentioned above, social con-

Finally, more recent accounts that stress the regional economic

Strategic-Preference Theory and ASEAN Integration

The Primacy of Economic Interdependence

Given the shortcomings of extant accounts for ASEAN integration, I

ASEAN members. What is important to emphasize here is that the

SPT here shares several main assumptions with liberal intergov-

The Role of Economic Interdependence

When it comes to economic interdependence, despite their geo-

Table 2 Intra- and Extra-ASEAN Trade, 2006 (percentage of country total)

Exports Imports Total Trade

Source: ASEAN Statistics, www.aseansec.org/1

Table 3 Top Ten ASEAN Trade Partners, December 2006

Trade Partner Exports Imports Total Trade

Total trade partner

Source: ASEAN Statistics, www

ASEAN foreign direct investment (FDI) either. For example, extra-

Figure 1 Extra- and Intra-ASEAN FDI Inflows, 1995-2004

Source: ASEAN Statistical Yearbook, 2005 (Jakarta: ASEAN Secretariat).

Figure 2 FDI Inflows to ASEAN by Source Country, 1995-2004

Source: ASEAN Statistical Yearbook, 2005 (Jakarta: ASEAN Secretariat).

While critical, however, these economic (and systemic) variables

Domestic Political Variables

First, it is crucial to note that because of a shared colonial experience,

to surrender their sovereignty to any regional institution of a supra-

vestment, their political will for it cannot be strong if it is perceived

Other Explanatory Factors

contrary to Singapore, Indonesia's ruling elites have feared that lower

ment in politically important sectors such as automobiles, petro-

Strategic Preference Shift and the

As described earlier, SPT posits that strategic preferences shift in the

Common Market) in Latin America, and the European Union. Along

elites in most countries took the interests of these domestic businesses

What are some policy implications of the research findings here?

Therefore, if ASEAN states are serious about realizing their goal of

have been the keys to keeping these projects alive by safeguarding

Min-hyung Kim is assistant professor in the Department of Political Science at

Oxford, UK: Oxford University Press.

and Institutional Change in Asian Regionalism.

In Bertrand Fort and Douglas Webber, eds., Reg

Politics, vol. 59, no. 4, pp. 629-652.

Case of the ASEAN Free Trade Area." Review of

Regional Development." Contemporary Southeast Asia, vol. 26, no. 3, pp.

West Europe, East Asia, and the Americas." In Edw

Lincoln, Edward J. 2004. East Asian Economic Regionalism. Washington, DC:

in Economics and Finance." Berkeley APEC Study C

Regional Order to Regional Community." Pacif

5, no. 4, pp. 443-445.