Introduction

On 27–28 January 1992, Heads of State of the Association of Southeast Asian Nations (ASEAN) met in Singapore for the Fourth ASEAN Summit and agreed to the creation of an ASEAN Free Trade Area (AFTA) in 15 years. After more than 20 years of slow progress in ASEAN economic co-operation, the commitment to create AFTA is a tremendous step forward. The ASEAN Preferential Trading Arrangements (PTA), which has thus far been the main vehicle for its trade co-operation efforts, has contributed little to the promotion of intra-ASEAN exports. Likewise, its industrial co-operation programmes have had limited success.

Yet, the gradual process of moving toward substantial economic co-operation can be seen as a blessing in disguise. The slow pace of ASEAN economic co-operation in the past was necessary because of the large divergences in the trade policy regimes and levels of economic development of the member countries. ASEAN was wise to have methodically and gradually built up the integration environment, institutions, and channels of communication upon which future co-operation can flourish. A more rapid attempt at integration may have led ASEAN to the fate of most other Less Developed Countries' (LDCs) efforts: abandonment. For example, the Latin American Free Trade Area (LAFTA) abandoned their grandiose scheme of economic integration in favour of a slower pace similar to the early years of ASEAN co-operation. Market reforms and trade liberalization in the more inward-looking countries have reduced the disparities and allowed ASEAN to move forward more rapidly. To a large degree, the present commitment by ASEAN governments to form an ASEAN free trade area is now possible with the unilateral tariff reductions in the ASEAN countries, especially Indonesia and Thailand.

Although AFTA represents a clear determination to transcend past forms of economic co-operation, the lack of success of previous ASEAN economic agreements has led to scepticism about AFTA and doubts as to whether the vision can be turned into reality.