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Unformatted text preview: Lecture 31: AFTA (ASEAN Free Trade Area). Origins. Southeast Asia consists of 11 nations, five on the Asian mainland—Burma, Cambodia, Laos, Thailand and Vietnam—and six on the offshore islands—Malaysia, Singapore, Indonesia, East Timor, the Philippines and Brunei. With the exception of Thailand, all these countries were colonies of European countries, or, in the case of the Philippines, originally of Spain and then of the United States between 1898 and 1946. World War II gave a fatal blow to European colonialism, and within fifteen years of the war’s end all the countries of Southeast Asia were politically independent. But, with the exception of the trading port and city-state of Singapore, all shared the same economic problem. They all emerged from the colonial era as mainly primary producers, agricultural products like rice and sugar, non-food organic products like timber and rubber, and mineral products like oil and tin. This was a problem because, over the course of time, the ratio between the prices and manufactured goods tends to change so as to make manufactured goods more expensive and primary products less expensive. So if the countries of Southeast Asia had remained primary producers, they would have become poorer, at least relative to the industrialized countries, over the course of time. What with this shared history of colonialism, the same shared economic problems and a certain degree of cultural similarity as well, the countries of Southeast Asia began to consider various forms of regional cooperation. After a couple of early tries proved abortive, six nations, Malaysia, Thailand, the Philippines, Brunei, Indonesia and Singapore, formed ASEAN in 1967. Burma, then as now a military dictatorship and Laos, Cambodia and Vietnam, then in the midst of the Indochina war, were not members. The stated purpose of ASEAN was enhanced economic and political cooperation among its members. Limited economic role. But for the next two decades, although ASEAN did unite politically to oppose Vietnam’s invasion of Cambodia in 1978, it played almost no economic role at all. The reason is something I’ve already hinted at. With the exception of Singapore, these countries were all producing the same sorts of products. If Thailand is producing rubber and sugar and Malaysia is producing rubber and sugar, what is there that they can trade? As a result, intraregional trade levels were very low, less than 20 percent of the total trade of the members. Almost all of that twenty percent was between Singapore, the only industrialized ASEAN country...
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This note was uploaded on 07/08/2008 for the course GEOG 20 taught by Professor Acker during the Spring '08 term at Berkeley.
- Spring '08