The "New East Asian Regionalism": A "Political Domino" Effect?

The proliferation of regional economic agreements involving East Asian economies in the years since the financial crises is usually explained in the political economy literature by reference to economic factors. These agreements have been viewed either as a response to the costs of increasing interdependence and/or to the demand by domestic exporters to level the playing field when their rivals benefit from preferential trade agreements. A detailed examination of economic data finds no support, however, for the argument that intra-regional economic interdependence in East Asia has increased significantly since the financial crises. Case studies suggest that business has not played a major role in either promoting or opposing the agreements—not surprisingly in that the agreements are unlikely to have a major economic impact, and are not being widely used by business. Rather than there being an “economic domino” effect at work, the new East Asian regionalism is best understood as being driven by a “political domino” effect.