Southeast Asia

Southeast Asia—and Asia more generally—has lagged behind other parts of the world in pursuing economic integration through formalized trade and investment agreements. In practice, though, the countries of Southeast Asia are becoming increasingly interlinked through regionally integrated supply chains. Broadly speaking, the less developed countries in the region provide the resources and land while the economically more advanced countries process the raw materials into inputs for further processing, notably in China, and final products for domestic use and export.

While the U.S., EU and Japan have traditionally been the region's main trading partners, they are increasingly being rivalled by China as a key market, supplier and investor for Southeast Asia. The 1997 financial crisis provided new impetus for Southeast and East Asian countries to move towards anchoring this de facto economic interconnectedness in bilateral and regional trade and investment agreements. Among other initiatives, recent efforts have focused on accelerating implementation of the Association of Southeast Asian Nations (ASEAN) Free Trade and Investment Areas and strengthening economic ties between ASEAN and its so-called 'dialogue partners,' including China, Japan, South Korea and others outside the region.



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