Scandinavian Working Papers in Economics

EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

No 153: THE DEVASTATING CRISIS, SINGAPORE’S EXTRA-ASEAN FREE TRADE AGREEMENTS AND THEIR IMPLICATIONS FOR ASEAN

Jose L. Tongzon ()
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Jose L. Tongzon: National University of Singapore, Postal: Department of Economics, National University of Singapore, 1 Arts Link, Singapore,

Abstract: This paper aims to assess the implications of the Asian economic crisis of 1997/98 and Singapore’s current initiatives to forge extra-ASEAN free trade agreements for the future of ASEAN economic integration. Have the recent crisis and the resulting economic difficulties undermined ASEAN’s resolve to deepen their level of economic integration? Would Singapore’s current initiatives at forging free trade deals with countries outside the region undermine the region’s economic integration? The perception by some members in ASEAN that these bilateral free trade deals can be used as a “backdoor” entry into the ASEAN markets is particularly a matter of serious concern, which could threaten the very existence of ASEAN as a regional economic grouping. It is argued that the recent crisis has instead galvanised ASEAN countries’ determination to move forward in economic integration and on the basis of the most recent trends, there is strong indication that the political resolve is likely to be translated into concrete measures. However, there remain other more challenging tasks before the vision of a regional free trade can be realised. Further, the fear that Singapore’s FTAs with other countries will undermine AFTA has not been based on concrete grounds. However, Singapore needs to assure other ASEAN members that Singapore is not abandoning ASEAN but remains committed to the success of AFTA with greater awareness of the political sensitivities of the other members.

Keywords: AFTA; bilateral free trade agreements; ASEAN; Asian crisis; implications

JEL-codes: F10; F15

15 pages, September 1, 2002

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