The EU and ASEAN: Real integration and lessons in financial cooperation

Economic cooperation between the members of the Association of Southeast Asian Nations (ASEAN)1 started very slowly in the mid-1970s with several (highly-limited) trade and industrial cooperation programmes. Modest though they were, initial economic cooperation agreements in ASEAN were important in establishing a strong base on which to build deeper ASEAN economic integration. The most visible sign of closer integration between ASEAN countries is the ASEAN Free-Trade Area (AFTA), created in January 1992 at the Fourth ASEAN Summit. AFTA should be fully implemented by 2003. Since the Fourth Summit, ASEAN economic integration has progressed on a number of fronts, including initiatives characteristic of the most highly-developed regional integration accords. The Asian Crisis temporarily inhibited progress in these new areas, but economic recovery appears to have allowed ASEAN to move forward once again. Moreover, the memory of the Crisis has underscored the need for greater attention to economic cooperation in other areas, particularly financial and monetary affairs. The EU experience in Economic and Monetary Union (EMU) is already having an influential effect on emerging ASEAN proposals.