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0 Interconnectivity
0 Endowment
0 Low trade barriers
0 Transport and communication links
.
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0 Production network integration
0 Open global system of trade &
investment
/
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0 Consolidating FTAs
0 Cross border infrastructure

  
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0 Improvements in financial markets
.
( 
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0 Monitor financial markets
0 Harmonization of financial
regulations
0 Minimum standards
0 ABMI & ABF
0 Regional infrastructure
0 Efficient financial systems
  #  %  

Improvement in the
regionǯs financial system

Greater New
investment products
Virtuous cycle in regional and
market services

Deeper financial
integration

  
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0 Improvements in financial markets
.
( 
!
0 Monitor financial markets
0 Harmonization of financial
regulations
0 Minimum standards
0 ABMI & ABF
0 Regional infrastructure
0 Efficient financial systems
/
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0Expand ABMI & ABF
0 New institution
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!
0 ?table microeconomics
.
( 
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0 Global payments imbalances
- Exchange rate adjustments
- Chiang Mai Initiatives
0 Monitor global and regional
developments
/
+ 
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0 Asian ?ecretariat for Economic
Cooperation
0 Economic Review & Policy Dialogue
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0  ci v rty
0 sti c ic r t
0 r - r lici s
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0C ct t r
0 ?cial rt cti syst s
0 Labr i rati s rvisi
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0 C r ial ffrt
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A?EAN
0 Offer capabilities in addressing issues
0 Framework for regional cooperation
0 Match challenges and diversity
0 Creates healthy competition

A?EAN+3 & East Asian ?ummit


0 Remain flexible
0 Physical connectivity

?ingle Market
0 Unification of regulations and currency
0 orkers mobility
0 Long term and pragmatic initiatives
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Rapid growth of Asia Demand for sustainable Regional


Economy, Population, economic growth,
Output, Play a larger role in global
economic
Economic growth rates economic leadership cooperation

DzIntegrating Asiadz
0 M economies including A?EAN, China, Hong Kong, India,
Japan, Korea and Taipei
0 87% of the regionǯs population
0 9 % of its output
0 More than half of its trade
   1  % 2 %  .334
   5     
Main characteristics
Ò Dynamic
Ò Open
Ò Pragmatic
Ò Diverse
Ò Outward-looking
Ò Vibrant

Asian economies
Ò Connected through market
Ò Focused on finding new and flexible forms of cooperation
Ò Complement global relationships
Ò Build bridge that connect Asian economies and the world
   5     
Benefit of Asian regionalism
Not just to Asia, but to the world
Ò ?ustainable growth of the region
Ò ?tability
Ò Equality
Ò Immense intellectual and economic resources
Ò Power and stabilize the global economy by boosting
productivity, raising living standards and reducing poverty

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6    % # 
0 Link competitive strengths of its diverse economies
0 Connect the regionǯs capital markets
0 Cooperate in setting exchange rate and macroeconomic policies
0 Pool the regionǯs foreign exchange reserves
0 Exercise leadership in global decision making
0 Build connected infrastructure
0 Create regional mechanisms

* ë  
 
       
*          
    
6    % # (6 2
Incentives and the leverage to play a bigger role
0 Generate productivity gains, new ideas and competition
0 Contribute to the stability of global financial markets
0 Diversify sources of global demand
0 Provide leadership to help sustain open global trade and financial
systems
0 Create regional mechanism to manage health, safety and
environmental issues

* @

   
*(% %#    
History of the economics of regionalism


Preferential   ,
  of
Discriminatory currency international trade and post-war global
blocs in M930s financial flows economic system
(nondiscrimination)

0   


      
0      
*(% %#    
        

0 Provide public goods


0 Manage the spillover effects of economic activity
0 Coordinate regional policy approaches to projects
0 Liberalize trade and investment
0 Add value to national policy making

  


 




   



*(%( #%+  

Ò Trade and Investment

Ò Financial integration

Ò Macroeconomic policy

Ò ?ocial and environmental policy


*(%( #%+  7 8
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Ò The loss of cooperation
 National sovereignty &narrow policy option
 Ex) Unable to issue own currency
Ò Cooperation is likely to evolve gradually
 Using frameworks and forum
Ò Characteristics of Asian Regionalism
 Pragmatic & cautious
Ò The public appears to have positive expectations
to regionalism
, %+ #% %
 2+% 

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Ò Advantages of European Union


-?imilar economic status
-Christianity
-Roman Alphabet
-Open minded
-Closer cooperation in policy making
-Euro currency
*(%( #%+  7 

Ò Global demand & financial stability


 Falling dollar, rising energy, food and other
commodity
Ò Environmental Damage
 ?ocial instability
Ò The unexpected factor
 Asian Financial crisis
Ò Regional cooperation is a form of insurance