Asia stands divided against dollar and euro

[Dover]

Commentary: Asia stands divided against dollar and euro

By William Pesek Jr. Bloomberg News
Friday, December 3, 2004

Size matters, something that Southeast Asian economies have come to understand as they try to compete globally. It explains why they now invite Japan, China and South Korea to their regional meetings.
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If Asia is going to wield real economic influence, the logic goes, it needs to get bigger. While the 10-member scope of the Association of Southeast Asian Nations, or Asean, is fine, bringing Asia's three biggest economies into the fold makes it more relevant.
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It's hard to get excited about Asia's sudden rush to create free-trade zones. The trend is a good one, of course. Asean nations and China this week agreed to cut tariffs on $100 billion of goods, paving the way in five years for a free-trade arena that could raise living standards for a third of the world's population.
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Trouble is, such agreements are more symbolic than substantive. Asean's pact with China, for example, excludes sensitive goods like steel, iron, automobiles and sugar. It also steers clear of the service sector and nontariff barriers to trade. And you can bet Japan will doggedly protect its farmers when it begins free-trade negotiations with Asean in April.
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What the region needs is a euro-zone model of economic integration and even a single currency. Sadly, this week's Asean meeting all but ignored these important issues.
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"In an increasingly globalizing world, there is likely to be a greater synchronization of business cycles," says the Asian Development Bank president, Tadao Chino. "Hence, the benefits of having fewer currencies to conduct cross-border business, especially at the regional level, are likely to increase."
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A regional currency could eliminate exchange-rate gyrations that hold back growth and scare investors. It could lead to greater convergence, bringing borrowing costs, fiscal policies and inflation trends into alignment. And bond yields might move lower across Asia.
...cont'd

http://www.iht.com/articles/2004/12/02/bloomberg/sxpesek.html

[Zenlitened]

1. Hmmmm... the world map morphing into three huge countries...

In this case, the U.S. and its protectorates... Europe + Turkey... and Asia.

Now where have we heard that sort of scenario before?

[aneerkoinos]

2. More than three

Besides EU(+Euro-Med FTA), ASEA and NAFTA, Mercosur and Andean Community are joining to form South American FTA or even union following the example of EU. LA is no more US protectorate. There are plans in Africa, plans for Arab FTA, Russia will stay important even by it's own, etc. The trend is rather slowly integrating complex network (something we Euro's have good understanding of because of lot's of practice in EU integration process) than new regional nationalistic superpowers in bloody rivalry.

Problem for Bushistas and many other Americans is that they still believe in the nationalistic superpowers model, and act accordingly (ie like a brat and loutish bully). That is why they are going to get shafted by those who are starting to act together more and more like mature grownups. If US don't grow up and start to behave, very few are going to want to play with them.