(This article appeared in Far Eastern Economic Review, 23 December 1999)

Anyone who has taken even a cursory interest in the Association of Southeast Asian Nations, better known as ASEAN, won't fail to have sensed that something important happened at its summit meetings in Manila at the end of last month. The problem, they face, however, is that they can't seem to put a finger on what that was.

Was it the meeting of ASEAN's leaders with the prime ministers of China and Japan and the president of South Korea? But the joint statement that they put out seems so broad and general. Was it the formation of an ASEAN ministerial "troika" to deal with peace-and-stability issues? But nobody knows how such a "troika" will operate. Was it the decision to advance the target date for the abolition of all tariffs on goods traded in ASEAN? But it only advanced the date by just a few years and even then the new target date seems so far away.

Events in East Asia evolve gradually and subtly, rather than in a series of dramatic breakthroughs. Thus, in our region events have to be viewed as part of an evolutionary trend, as steps in a process.

The meeting of ASEAN's leaders with those of China, Japan and South Korea wasn't their first. It was the third such meeting in three years. What this says is that these events have become relatively frequent, even regular. In Manila, the leaders set forth explicitly, although necessarily in broad terms, the areas in which they are to cooperate. One should look beyond the literal meaning of the joint statement and view the summit as part of a general convergence of purpose in East Asia, a process that has been building up. Before the summit, the finance ministers and officials of the 13 countries had held an unprecedented series of meetings. Their foreign ministers had been meeting annually since 1994.

If one views the "ASEAN+3" summit in Manila as part of a historical trend, one can sense that something important may be happening here. This developing forum may serve to diffuse any potential rivalries among the stronger countries of East Asia. Growing synergies in the economies of Northeast and Southeast Asia may strengthen the economic muscle of the region. Closer financial cooperation among them could give the region a greater voice in international financial decisions that is not possible for ASEAN alone.

The importance of an ASEAN "troika" may not be readily apparent to some people. But because of its small size and the very flexibility of its composition, it can deal with rapidly developing situations much more efficiently and quickly than ASEAN acting as a whole. In the troika, the world may see a greater ASEAN capability to respond to critical events in the region.

The significance of the decision to advance the target date for zero tariffs in ASEAN from 2015 to 2010 has been generally missed. If the decision is viewed in isolation, it doesn't seem such a big deal. But it has to be looked at as part of the acceleration of the ASEAN Free Trade Area and the larger process of expanding free trade not only in goods but in services as well.

One has to consider that, by the beginning of 2000 -indeed, just a few weeks from now- almost 90% of goods traded within ASEAN will be subject to tariffs of less than 5 % and some to no tariffs at all. This is the result of a series of decisions to integrate the ASEAN economy. The decision in Manila re-affirms ASEAN's commitment to a progressively integrated market, which is important not only for expanding trade within ASEAN but also for attracting investments into the region.

Finally, the question is asked: Are regional formations, whether in ASEAN or East Asia, relevant in a globalized economy? The point to remember is that the international economy isn't an either-or affair. Some initiatives can be taken only globally. Others are best left to individual nations. Some are best undertaken by smaller groups, others by larger ones.

Thus, ASEAN is moving forward to an integrated Southeast Asian economy. But it's also working on free trade with Australia and New Zealand. And it's increasingly engaged with its Northeast Asian neighbours. East Asia, in turn, is involved in economic discussions with the European Union and, together with Australia and New Zealand, with Latin America. Most of ASEAN remains deeply involved in APEC. All these arrangements and processes are building blocks in the global economy, each responsive to what is possible for and in the interest of the countries involved.

The failure of the World Trade Organization ministers in Seattle to agree on a new round of multilateral trade negotiations shows that some governments aren't yet ready for a trade liberalization that takes into account and balances the interests of all. The reform of the international financial system is proceeding much too slowly. in the meantime, regional arrangements can contribute to the greater efficiency of the international economy, as well as to regional peace and stability and the well-being of people. This is, ultimately, the significance of the recent ASEAN summit and of ASEAN+3.