Globalisation, Domestic Politics and Regionalism: The ASEAN Free Trade Area (Routledge Warwick Studies in Globalisation, 5)

230 Pages·2003·1.21 MB·English

by  Helen Nesadurai

Globalisation, Domestic Politics and Regionalism
Globalisation, Domestic Politics and Regionalism analyses the relationship between
globalisation and regionalism through a detailed examination of the ASEAN Free Trade
Area (AFTA) project.
The book argues that AFTA encompasses the features of both open and developmental
regionalism due to the political significance of foreign and domestic capital, illustrating
the more general point that the domestic political economy, which mediates between
globalisation and regionalism, can be used to explain the evolution of AFTA between
1991 and 2002. Despite being triggered by the pressures of globalisation, it was the tussle
between the imperatives of growth and domestic distribution that shaped the way AFTA
unfolded.
Nesadurai’s concept of developmental regionalism breaks new ground, supplementing
existing models of the globalisation-regionalism relationship. She also offers an account
of how universal structural pressures arising from global capitalism are played out in
different regional and country settings. It should appeal to all those interested in the
manner in which the global and the local interact in processes of regionalism, particularly
in settings outside North America and Western Europe.
Helen E.S.Nesadurai is Assistant Professor at the Institute of Defence and Strategic
Studies, Nanyang Technological University, Singapore.
Routledge/Warwick Studies in Globalisation
Edited by Richard Higgott and published in association with the Centre for the Study
of Globalisation and Regionalisation, University of Warwick.
What is globalisation and does it matter? How can we measure it? What are its policy
implications? The Centre for the Study of Globalisation and Regionalisation at the
University of Warwick is an international site for the study of key questions such as those
in the theory and practice of globalisation and regionalisation. Its agenda is avowedly
interdisciplinary. The work of the Centre will be showcased in this new series.
This series comprises two strands:
Warwick Studies in Globalisationaddresses the needs of students and teachers, and the
titles will be published in hardback and paperback. Titles include:
Globalisation and the Asia-Pacific
Contested territories
Edited by Kris Olds, Peter Dicken, Philip F.Kelly,
Lily Kong and Henry Wai-chung Yeung
Regulating the Global Information Society
Edited by Christopher Marsden
Banking on Knowledge
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Historical Materialism and Globalisation
Edited by Hazel Smith and Mark Rupert
Civil Society and Global Finance
Edited by Jan Aart Scholte with Albrecht Schnabel
Towards a Global Polity
Edited by Morten Ougaard and Richard Higgott
New Regionalisms in the Global Political Economy Theories and Cases
Edited by Shaun Breslin, Christopher W.Hughes, Nicola Phillips and Ben Rosamond
Routledge/Warwick Studies in Globalisation is a forum for innovative new research
intended for a high-level specialist readership, and the titles will be available in hardback
only. Titles include:
1 Non-State Actors and Authority in the Global System
Edited by Richard Higgott, Geoffrey Underbill and Andreas Bieler
2 Globalisation and Enlargement of the European Union
Austrian and Swedish social forces in the struggle over membership
Andreas Bieler
3 Rethinking Empowerment
Gender and development in a global/local world
Edited by Jane L.Parpart, Shirin M.Rai and Kathleen Staudt
4 Globalising Intellectual Property Rights
The TRIPs Agreement
Duncan Matthews
5 Globalisation, Domestic Politics and Regionalism
The ASEAN Free Trade Area
Helen E.S.Nesadurai
For my parents, Esther and Victor Nesadurai
Globalisation, Domestic Politics
and Regionalism
The ASEAN Free Trade Area
Helen E.S.Nesadurai

LONDON AND NEW YORK
First published 2003
by Routledge
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge
29 West 35th Street, New York, NY 10001
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2005.
“To purchase your own copy of this or any of Taylor & Francis or
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© 2003 Helen E.S.Nesadurai
All rights reserved. No part of this book may be reprinted or
reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter
invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in
writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the
British Library
Library of Congress Cataloging in Publication Data
Nesadurai, Helen Sharmini.
Globalisation, domestic politics and regionalism: the ASEAN
Free Trade Area/by Helen E.S.Nesadurai.
p. cm.
Includes bibliographical references and index.
1. Free trade—Asia, Southeastern. 2. Asia, Southeastern—
Commercial policy. 3. Regionalism—Asia, Southeastern.
4. Globalization—Economic aspects—Asia, Southeastern.
5. Globalization—Political aspects—Asia, Southeastern. 6. Asia,
Southeastern—Economic integration. 7. Asia, Southeastern—
Foreign economic relations. 8. ASEAN Free Trade Area.
I. Title.
HF2330.8.Z7 N47 2003
337.1′5–dc21
2002153797
ISBN 0-203-13088-X Master e-book ISBN
ISBN 0-203-33968-1 (Adobe e-Reader Format)
ISBN 0-415-30800-3 (Print Edition)
Contents

List of illustrations viii
Acknowledgements ix
List of abbreviations xi

Introduction 1
1 Globalisation and economic regionalism 21
2 The unfolding of a regional economic cooperation project: AFTA, 1991– 44

2002
3 Foreign capital and open regionalism 70
4 Domestic capital and developmental regionalism 89
5 Re-negotiating AFTA commitments 114
6 Implementation as a political process 134
Conclusion 152

Notes 166
References 185
Index 200
Illustrations
Figure

1.1 The role of growth and distribution in elite governance political systems 39
Tables

1.1 Four models of the globalisation-regionalism relationship 41
2.1 Three phases of the AFTA project, 1991–2002 45
2.2 Implementation details (1992) of the CEPT scheme 49
2.3 AFTA tariff reduction start dates (adopted December 1992) 50
2.4 Most prevalent non-tariff barriers in ASEAN 51
2.5 Revised (1994/95) implementation details of the CEPT scheme 52
2.6 Short-term investment incentives offered in December 1998 56
2.7 CEPT implementation package for 2001 (submitted in 2000) 58
2.8 Number of tariff lines at 0 per cent by 2003 (based on 2001 CEPT package) 58
2.9 Average CEPT tariff rates (per cent) 60
2.10 Number of tariff lines with rates of 0–5 per cent at 2001 60
2.11 MFN-CEPT tariff differentials, 2001 61
2.12 Status of unprocessed agricultural products in AFTA, 1994 63
2.13 Temporary Exclusion List and Sensitive List, manufacturing sector 67
3.1 Flows of FDI to host region/economy, 1983–98 (US$ million) 72
6.1 A framework of institutionalisation 141
6.2 Nature of the constitutional documents 145
Acknowledgements
Many people and institutions have made possible the completion of this book, which is
based on my doctoral dissertation completed in 2001 at the Department of Politics and
International Studies at the University of Warwick, UK. I am deeply grateful to my
dissertation supervisor, Richard Higgott for his encouragement, support and guidance
throughout the PhD. I especially appreciate his understanding and patience in allowing
me the intellectual space to explore varied lines of research, and for wisely guiding me
back whenever I strayed too far. To him I owe my most sincere thanks.
My research also benefited enormously from my affiliation as ASEM/ Chevening
Fellow at the Warwick/ESRC Centre for the Study of Globalisation and Regionalisation
(CSGR). The Centre offered a stimulating intellectual environment in which to work, and
a friendly and lively atmosphere as well that made writing the dissertation that much
more enjoyable. Additionally, I wish to express my gratitude to the UK Foreign and
Commonwealth Office, which, through its Chevening Award provided full funding for
my three years of PhD research. I would also like to record my appreciation to the
Institute of Strategic and International Studies (ISIS) in Malaysia for granting me leave
from work to read for the PhD. The final draft of this book was completed at the Institute
of Defence and Strategic Studies (IDSS), Nanyang Technological University, Singapore
where I am currently based. For his support and encouragement to complete the book
manuscript, I would like to thank Barry Desker, Director of IDSS.
A number of research institutes in Southeast Asia also greatly facilitated my field
research in the region. ISIS Malaysia in Kuala Lumpur and the Centre for Strategic and
International Studies (CSIS) in Jakarta kindly hosted my research visits to Malaysia and
Indonesia respectively during July-September 2000. My thanks, too, to the Library of the
Institute of Southeast Asian Studies (ISEAS) in Singapore for its welcome and the help
extended to me. I am also indebted to Mushahid Ali, then with the Ministry of Foreign
Affairs, Singapore and currently my colleague at IDSS, for his help in securing
appointments with Singapore government officials.
To the more than 30 people who graciously consented to be interviewed for this
project, I would like to extend my gratitude. Their patient and candid responses to my
myriad questions helped me considerably in interpreting the dynamics of AFTA,
although they may not fully agree with the views expressed in this book, which are, of
course, entirely my own.
Shaun Breslin and David Camroux, my dissertation examiners, offered valuable
suggestions on converting the dissertation into a book, for which I am grateful, as I am to
the two anonymous reviewers for their constructive feedback on the book proposal. At
Warwick, I benefited from the discussions with Chris Hughes, while Diane Stone helped
me gain better insights into my own research by inviting me to collaborate with her in
writing on Southeast Asian think tanks and regional cooperation. Participants at the May
2000 Graduate Students’ Workshop at the University of California, San Diego provided