The paper by Akrasanee and Stifel is an extremely timely contribution to the growing literature on AFTA. It deals with issues that tend to be swept under the carpet because they are usually considered “sensitive”. I have no basic disagreement with the tenor of the paper, especially on the evolution of ASEAN from the inception to the Fourth ASEAN Summit in Singapore in January 1992.

One should not lament the fact that there had been little substance in ASEAN economic co-operation until recently. Without a doubt, ASEAN is the most successful regional grouping in the Third World. Regional groupings in Latin America, Africa, the Middle East, the Caribbean and South Asia pale in comparison with ASEAN. Hindsight tells us that it was wise of ASEAN to have spent its early years just laying the political foundations as a prelude to regional economic co-operation. Evidently, ASEAN countries have benefited much from such political cooperation because it helped defuse tensions and conflicts in the region so that member states could successfully concentrate on their economic pursuits. ASEAN has thus contributed significantly, albeit indirectly, to the prosperity of its members.

The low and declining proportion of intra-ASEAN trade in the total trade of ASEAN need not be viewed negatively. Indeed, the success of regional economic co-operation cannot be accurately measured by the share of intra-regional trade because it fails to capture many positive elements that are not easily quantifiable. The share of intraregional trade is essentially a function of the nature, character and structure of the regional economy. Undeniably, ASEAN economies owe their prosperity largely to their extra-regional trade and investment linkages. It is not in the interest of ASEAN countries to re-orientate their economies. It is unlikely that intraregional trade will have a high profile even under AFTA, although it will grow in absolute terms. Clearly, ASEAN's most lucrative markets lie outside the region.