Australia, Japan float rival plans for EU-style Asian bloc

Regional partners to a Southeast Asian trade bloc have outlined rival proposals for a European-style economic community in Asia, home to the world's most dynamic economies.

At a weekend summit in southern Thailand, Japanese Prime Minister Yukio Hatoyama talked up the concept of an "East Asian community" with a common currency that would "lead the world." Australia's Prime Minister Kevin Rudd separately proposed an Asia/Pacific economic bloc that includes the US and cooperates on security issues.

But political obstacles to economic integration, such as questions over a US place in any economic grouping and rivalry between major Asian powers like China and Japan, may thwart a rapid rollout of either plan.

Tensions also exist over who would guide any transition to an open market for goods and services. The Association of Southeast Asia Nations (ASEAN), the regional grouping that hosted the 16-nation summit, fears being upstaged by larger economies and reduced to a junior role.

In theory, ASEAN is supposed to establish a common market of over 500 million people in ten member-countries by 2015. But that deadline is widely seen as overly ambitious given the political and economic disparities between members, as well as niggling bilateral rifts on display at the summit.

Stronger Japanese diplomacy?

Mr. Hatoyama recently took office promising to put a stronger spin on Japanese diplomacy in Asia. His proposal for East Asian economic unity appears to be the first fruit, says Michael Montesano, a visiting fellow at the Institute of Southeast Asian Studies in Singapore.

"It's a reminder to ASEAN that the pace of ASEAN-centered integration has been slow. ... The real issue is whether [Japan's proposal] is controlled and managed by ASEAN or not. That's a real source of anxiety," he says.

Mr. Rudd's plan for a broader economic alliance is even less palatable as it may eventually impose political standards on members, says Mr. Montesano. By contrast, ASEAN watered down commitments to human rights and democracy in its charter adopted this year in deference to members like military-ruled Burma and communist Vietnam.

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