SHORT REPORT ON



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Report on Wilton Park Conference 719

in association with the United Nations University

Japan and East Asia in a Globalising World

Monday 29 September – Thursday 2 October 2003

Introduction and Overview

1. East Asia is experiencing dynamic social and economic change. The processes of globalization – in particular the free flow of information, trade, services, capital and labour – are transforming the region. The benefits of this are apparent across a range of indicators in most countries. Aggregate economic growth rates, income levels and welfare standards are improving in almost all countries in the region. In terms of the driving forces of globalization – trade, investment, technological innovation and human ingenuity – East Asia provides a huge impetus to development and progress in other regions around the world.

2. Simultaneously, however, the forces and processes of globalization are not being embraced without friction or opposition. There are tensions between bilateral, regional and global trade and financial regimes. Domestic vested interests resist the opening up of economies to global standards of free trade and competition. Moreover, the benefits of globalization are not being evenly distributed, and the remarkable development that the region has experienced has not come without an environmental cost. Social and cultural changes have had an impact on ways of life that has not been unanimously welcomed in the region. In addition, the same processes that allow the growth and responsiveness of markets and the free movement of goods, people and capital also allow distinctively negative types of

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The conference was also supported by:

Foreign and Commonwealth Office, London; British Airways

And with additional support from: The British Embassy, Tokyo; Ministry of Foreign Affairs, Tokyo; Centre for East Asian Studies, Monterey Institute of International Studies, Monterey, California; Ford Foundation, Beijing; Asian Development Bank Institute, Tokyo; Canadian Department of Foreign Affairs and International Trade

interconnectedness. Epidemiological threats – such as HIV/AIDS and SARS – amongst other ‘non-traditional’ security threats, pose a significant challenge to the region. Organized crime groups exploit the dark side of globalization by trafficking in humans, narcotics and weapons.

3. In terms of traditional security, East Asia represents a complex range of challenges. The proliferation of weapons of mass destruction, the huge build-up of conventional weapons, and the possibility of potentially destabilizing technological innovations including missile defence are the manifestations of deeper political and security anxieties. The security predicament on the Korean peninsula and the worst case scenario of ‘spiralling proliferation’ in weapons of mass destruction present the most pressing security challenges. In addition, the relationship between Japan and China, and the peripheral but connected issue of Taiwan are issues of concern. Questions about the long-term US military presence in the region will need to be addressed in the longer term. In Southeast Asia, especially, terrorism presents a clear and present threat to both traditional and human security.

4. The response of the region to these opportunities and challenges has had varied results. Strong bilateral ties exist but the region is peculiarly weak in terms of durable multilateral institutions, whether in the economic, political or security realms. Sometimes regional responses are in tension with alliances formed between regional states and external actors. Occasionally external influences undermine regional initiatives. And even though there are clearly great opportunities for greater cooperation and integration, regional initiatives are in turn undermined by historical sensitivities, misunderstandings, and ongoing disputes.

5. In focusing on East Asia’s economic and security outlook in an era of globalization, a number of questions arise. How can multilateralism be enhanced in East Asia, to respond both to negative challenges and positive opportunities? What ‘core values’ exist upon which regional cooperation can be strengthened? How can functional challenges – such as the environment and energy issues – be tackled transnationally in such as way that leads to broader political understanding, confidence building and stability? How can regional actors develop cooperative arrangements and institutions that build upon a sense of regional identity whilst also maintaining global ties and responsibilities? In particular, how can regional free trade arrangements be reconciled with the global trade regime? The mutual benefits that could be attained by resolving political and security tensions are enormous; but how can this be achieved? In a region beset by traditional security challenges, what are the prospects for collectively addressing non-traditional security challenges, including organized crime and terrorism? What is the region’s contribution to global peace, security and prosperity, and how can this be strengthened?

6. Rapid development and the prioritization of economic growth, and relatively weak institutionalized regional arrangements, have resulted in the emergence of vulnerabilities. Globalization has brought many benefits and opportunities to the region. Yet the structural and technological changes that allow these processes to flourish also allow malignant forces to exploit the same opportunities and to pose serious challenges to democracy, development, and security. Addressing these threats, whilst maintaining the individual and economic freedoms essential to modern democratic societies, is a major challenge for the region.

Traditional Security Challenges

A militarized strategic environment

7. Traditionally, international security is defined in terms of defending national territory against ‘external’ military threats, generally under state control. Whilst the security discourse has evolved in fundamental ways, both in academia and in policy circles, the traditional model of security retains a great deal of relevance for the East Asian region. A number of perennial points of tension have continued since the Cold War and mark the region as a complex security predicament.

8. The region is highly militarized and a number of countries – principally China and Japan – are undergoing major military enhancement programmes. In the year 2002, according to the Stockholm International Peace Research Institute (SIPRI), the four main military actors in the region were the first, second, fifth and twelfth largest global military spenders (respectively the US, with an annual military budget of US$335.7 billion; Japan, $46.7 billion; China, $31.1 billion; and Russia, $11.4 billion). A latent, although not acute, mutual wariness exists amongst the three main regional actors – Japan, China and Russia – which is fuelled by ongoing territorial disputes and political and historical sensitivities. The key external regional actor, the US, provides a stabilizing influence in the region, chiefly through its security guarantees to Japan and the Republic of Korea. This precludes the necessity of Japan to become a military power in the conventional sense, and also provides a counterweight to China. The issue of Taiwan, whilst generally stable, continues to present a possible threat to both Southeast and Northeast Asia, given the dangers of US entanglement in the event of a conflict, and by extension Japan through the positioning of US forces in Japan. Australia is also a significant military power and has strengthened its commitment to regional security norms and institutions.

9. Whilst the relationships amongst the main states in East Asia are reasonably stable, a number of delicate questions remain. These concern the future of the US military presence (generally seen, even by the Chinese, as a stabilizing force), the military capacity of Japan, the future of the Korean peninsula, and the possible introduction of theatre missile defence in the region. The threat of weapons of mass destruction is an over-arching concern. These hard security issues are exacerbated by lingering historical sensitivities, such as minor territorial disputes and differences amongst the main actors to issues which do not represent direct disagreements but which could bring them into direct conflict in the worst case: such as conflict over Taiwan or North Korea.

10. In terms of nuclear weapons, the challenges are multifold. Non-proliferation is clearly a pressing and overriding objective. In addition, the obligation that existing nuclear weapons states have towards disarmament under the Non-Proliferation Treaty - and the compact between them and non-nuclear weapons states not to go nuclear - is an important component of this non-proliferation regime. It is not enough, however, to demand that other states do not have nuclear weapons when the existing nuclear states – and most particularly the permanent members of the UN Security Council – clearly perceive that their own nuclear armaments enhance their own security. It appears that the nuclear states wish to have non-proliferation but not disarmament; and they apply the norm of non-proliferation most rigorously to states that do not share good relations with them.

The Democratic People’s Republic of Korea

11. Most alarmingly, the situation in the Korea peninsula presents an array of real (although occasionally exaggerated) security concerns. Since the end of the Cold War – and the reduction of Russian and Chinese support – the Democratic People’s Republic of Korea has experienced a series of economic and social crises. The country has become increasingly isolated and, for a variety of reasons, increasingly confrontational. In October 1994 the ‘Agreed Framework Between the United States of America and the Democratic People's Republic of Korea’ was brokered between Washington and Pyongyang to end the nuclear stand-off. As part of the deal, North Korea agreed to freeze its nuclear ‘research’ programme and eventually dismantle its proliferation-sensitive graphite nuclear reactors in return for interim deliveries of heavy fuel oil and the eventual construction of two light water nuclear reactors whose nuclear fuel is less susceptible to diversion for weapons purposes. The Agreed Framework was to be implemented by the multilateral Korean Peninsula Energy Development Organization (KEDO). KEDO achieved some success in its two primary objectives: arranging for fuel oil deliveries and arranging for the construction of the LWRs. It also provided a meaningful way for South Korea to be directly involved in the Agreed Framework process and thus transformed the bilateral US-DPRK Agreed Framework process into a multilateral dialogue in which South Korea plays a leading role. KEDO also brought Japan, the European Union and other states into the Agreed Framework process.

12. In late 2002 tensions mounted over North Korea's nuclear programme and a spiraling series of alarming events occurred. The US stated that North Korea admitted to having a secret nuclear weapons programme and announced a halt in oil shipments to Pyongyang; North Korea began to reactivate its Yongbyon nuclear reactor, throwing out international inspectors; and in January 2003 North Korea declared its intention to withdraw from the Nuclear Non-Proliferation Treaty (NPT). In July 2003 Pyongyang claimed that it had produced enough plutonium to start making nuclear bombs. The ‘nuclear card’ is North Korea’s only bargaining chip, and most observers treat such declarations as a crude negotiation ploy. Yet in the context of North Korea’s other actions the situation took on crisis proportions.

13. The climax of this has paradoxically shown the importance of some form of multilateral forum to address security concerns, including all of the concerned parties. In August 2003 the ‘six party talks’ on weapons of mass destruction were hosted, in Beijing, by the government of China. Whilst little concrete progress was made at the meeting, participants reportedly agreed to meet again. At the same time, in October Pyongyang claimed that it had finished reprocessing 8,000 nuclear fuel rods, obtaining enough material to make up to six nuclear bombs, and asserted that it did not want Japan to play any further part in talks on its nuclear programme. The implications of this for the proliferation of weapons of mass destruction and missile technology in the region are alarming. It represents not only the ‘threat’ of North Korea itself but a host of likely destabilizing knock-on effects, such as the acceleration of Japanese missile defence or even Japanese nuclearization.

14. However, the ‘six party talks’ are a promising development. They are a channel of communication (in the absence of formal diplomatic relations between North Korea and Japan and the US); they provide a modicum of confidence-building; and they give North Korea some sense of assurance that its concerns are being heard. However, the posture of North Korea at these talks – employing its usual threats and brinkmanship – could be seen as going too far. It is important to understand the reasons behind North Korea’s aggressive posturing (its perceived struggle for survival, and its desperate economic situation) and the record that North Korea has had in attaining concessions from such an approach in the past. North Korea’s rhetoric should be seen within this context.

15. Whilst it is easy to see North Korea as the solely recalcitrant actor, it is not impossible to consider that its own perceptions of the situation may be different. The pressures that have been placed upon the country – including the halting of oil shipments, the labeling of North Korea as a part of an ‘axis of evil’ by the US, and references to North Korea as a possible target for ‘regime change’ – have clearly brought out the worst in the regime.

16. Nevertheless, given that the ‘six party talks’ are the current best hope for progress, a number of steps should be followed to avoid jeopardizing this opportunity: needlessly provocative statements and actions should be avoided, on all sides; the current six party format should be strengthened beyond the ad hoc nature to a more solid multilateral basis; and whilst this issue might not best be addressed by the UN, a multilateral regional solution could be endorsed by the UN Security Council to enhance confidence and legitimacy. If such a multilateral solution is to be sustainable, broader issues will have to be addressed. A formal cessation of hostilities needs to be achieved between North and South Korea, and between North Korea and the US; and formal diplomatic relationships should be considered amongst those countries who do not currently share them. A Korean peninsula free of all weapons of mass destruction must serve as the overriding priority. In return for assurances of not to develop any weapons of mass destruction, North Korea might be given some form of assurances guaranteeing its sovereignty and integrity. Moreover, in line with the 1992 Basic Agreement, reduction in conventional forces must be achieved. And whilst formal security pacts may be difficult to achieve, some form of security assurances should be feasible.

17. The North Korea security challenge is complicated and due efforts must be taken to minimize differences in the approaches of interested parties, especially when they threaten to undermine the political processes. Firstly, the South Korean ‘sunshine’ policy has been in tension with the more forthright approach of the US. South Korea has achieved a certain amount of success – albeit often wavering – in attempting to accommodate North Korea’s anxieties, provide humanitarian assistance to the North, and achieve a basis for diplomatic negotiations. The US approach displays less willingness to accommodate North Korea’s abrasive approach and less willingness to offer concessions or ‘reward bad behaviour’.

18. In this regard, it may be worthwhile to consider that there are more progressive conciliatory elements in North Korea and seek to bolster them, rather than simply threatening the country, which is more likely to strengthen the hand of the combative reactionary elements. According to such an approach, it would be fruitful to support the South Korean ‘sunshine’ policy as a balance to – or in addition to – more coercive approaches. Whilst North Korea’s behaviour seems aggressive and unreasonable, it may be worth considering that it does itself feel that its survival is at stake, as a result both of external military threats and economic collapse.

19. In terms of Japan, the issue of citizens abducted by North Korea is a complicating factor: a very sensitive domestic issue, the government of Japan has felt compelled to raise the issue at every opportunity it gets, including the ‘six party talks’ and the opening of the UN General Assembly in September 2003. Whatever the merits of this issue, North Korea has been antagonized by Japan’s tendency to link it to multilateral talks on nuclear proliferation and security in the region. It is possible, also, that other parties to the security discussions prefer that it is dealt with separately. However, the Japanese government has observed that, whilst it would be happy to pursue them in another forum, no other opportunity arises, and so it must pursue the issue whenever possible. Certainly, given domestic public pressure, the Japanese government is in a difficult situation. In light of this, it seems feasible and logical to seek a comprehensive solution to all outstanding security and political issues, but in such a way that different objectives and approaches are not in tension with each other. A security solution which also incorporated broader objectives – such as humanitarian assistance, cooperation on energy, and the establishment or restoration of diplomatic relations – could allow for this, but certain issues would have to addressed as a priority. Other issues may have to be left until the foundation to resolving the most pressing challenges can be built.

Contributing to international peace and security

20. Whilst the solution to security problems can only come through political negotiation and compromise, it is necessary for like-minded responsible states to be willing and able to respond decisively, if necessary, to regional security threats. Moreover, the existing non-proliferation mechanisms may no longer provide a sufficiently tight assurance of security. An important development in this regard is the Proliferation Security Initiative. This initiative, a coalition of eleven countries, is designed to respond to the threats of proliferation of weapons of mass destruction (it is not directed specifically at any particular country). The joint mechanism made up of the armed forces of member countries will have the power to interdict the flow of sensitive material. The successful first exercise of the PSI, hosted by Australia, was held in September 2003 and was a good demonstration of countries working together effectively. The PSI may be a model for future cooperation, pursued in accordance with international law and with due effort to avoid any misunderstanding that might be harboured towards the initiative by states such as China.

21. In recent years Japan has been making a notable contribution to international peace and security. This has included enacting peacekeeping legislation and contributing to UN peacekeeping missions since the early 1990s, sending maritime self-defence force supply ships to the Indian Ocean in support of international security operations, cooperating on missile defence research, and enacting the historic emergency response legislation which will allow a more responsive contribution to international responses to terrorism. Japan has had a fruitful input into conflict resolution efforts in Sri Lanka and Aceh/Indonesia, and has also expressed willingness to contribute to the stabilization of Iraq. However, it is important to understand that limitations to Japan’s contribution to international peace and security do exist in the context of the country’s social and political culture, its history, and its constitution. In acclimatizing the elites of all countries to the changing political and security environment across East Asia, as well as building cooperation and confidence, ‘track two’ discussions such as the Council for Security Cooperation in the Asia Pacific (CSCAP) are to be encouraged.

Terrorism

22. Terrorism falls at the intersection of traditional and non-traditional security. The events of September 11th 2001 and the ‘war on terrorism’ have demonstrated the complexity of the security agenda. The causes and methods of terrorism – and the responses to it – have triggered a debate that many are describing as a turning point. Did the world change on September 11th 2001? In some ways it did: the vulnerability of the undisputed global hegemon was brutally exposed. Borders are violable and prove no defence against an unconventional enemy. And security cannot be achieved through superior firepower alone. At the same time, terrorism is nothing new for thousands of people around the world in various trouble spots; it is a daily reality. The Bali bombing and the Marriot hotel bombing demonstrated that terrorism is a clear and present threat to East Asia. It is difficult to judge whether East Asia has itself actually changed as a result of the terrorist attacks of September 11 and the war on terror, or whether it is the changed US perception of, and response to, diverse security challenges including terrorism that has in turn changed the security outlook in East Asia in fundamental ways.

23. In North and especially Southeast Asia terrorism and insurgency have become more pressing in recent months. It is increasingly evident that certain societies – such as the Philippines, Indonesia and Singapore – have been infiltrated by fundamentalist groups that may have links to the Al Qaeda terrorist network. Addressing this possible risk is sensitive. Pursuing fundamentalist – especially Islamicist – terrorist threats is delicate, especially when relying upon the assistance of US force. A number of states in Southeast Asia must balance a number of challenges: terrorist threats must be addressed, but not in such a manner that incites additional societal instability and challenges to the state. Moreover, basic human rights must also be respected. Southeast Asia – which contains the largest concentration of Muslims in the world – has a tradition of religious moderation, but extremism can be exacerbated in times of crisis. In response to indications that the Al Qaeda terrorist network is deeply entrenched in Southeast Asia, the US has deployed troops in the Philippines, supported Singapore and Malaysia for their rigorous pursuit of ‘suspects’. It is also pushing Indonesia to follow suit.

24. However, it is unwise and unreasonable to expect the US to be responsible for security in East Asia. East Asian states must take the lead themselves in developing regional responses. At their summit meeting in November 2001, ASEAN's leaders declared war on terrorism and agreed to take joint actions to counter it. On 7 May 2002, Malaysia, Indonesia and the Philippines signed an agreement on implementing tougher measures to fight terrorism. The main aim is to improve the exchange of information among armed forces and law enforcement agencies. The authorities will share information on airline passenger lists and databases of fingerprints, among other useful leads. The agreement is open to accession by other ASEAN countries.

25. An even bigger breakthrough was the adoption of an action plan to combat terrorism, at a special ASEAN ministerial meeting on transnational crime in March 2002. The objective is to deepen cooperation among ASEAN frontline law enforcement agencies in combating terrorism; enhance intelligence exchange to hasten the flow of information on terrorists' movement and funding; call for the early signing and ratification of accession to all anti-terrorism conventions, including the International Convention for the Suppression of the Financing of Terrorism; and review and strengthen ASEAN national mechanisms to combat terrorism. The Proliferation Security Initiative may well have relevance in the fight against terrorism, especially in keeping weapons of mass destruction out of the hands of terrorist organizations. In this and other initiatives, Australia is playing an important role.

26. However, there are clearly difficulties. These are related to the inherent sensitivities of tackling terrorist threats in potentially volatile societies where religious and ethnic balances are already delicate; and also the political tradition of ASEAN which is characterized by sensitivities related to state sovereignty and non-interference. There have also been criticisms that the approach currently taken in the region to terrorism – essentially a combative approach – is misguided, incendiary, and could even do more harm than good. Indeed, there is a real risk of radicalizing disaffected groups and playing into the hands of terrorists and insurgents. In balancing security and freedom, to what extent should governments be legitimately entitled to suspend or limit human rights in the suppression of 'terrorist' threats at home and throughout the region? What are the particular sensitivities of pursuing terrorism in Southeast and Northeast Asia? Whilst terrorism is a threat, this threat must not be exaggerated or exploited for politics ends. Moreover, it is essential to address the root causes – including social deprivation, inequality and oppression – that can form a breeding ground for extremism.

Non-traditional security challenges

27. Even in East Asia, which seems almost the last bastion of realist power politics, the nature of security is evolving. Security is no longer solely conceived of as defence of national territory against ‘external’ military threats. The institutions and policies in which we invest our security must be reassessed in a globalizing and interdependent world. Globalizing forces in economics, information and culture, and various fragmentary forces, are modifying – in some cases challenging – the state from above and below. New opportunities exist for non-state actors to exert influence above and below the state and to have an impact upon the lives of us all, both positive and negative. The nature of security threats – whether to individuals, communities, or states – is both constant and in flux.

28. The human and non-traditional security agenda is both broad and deep. Amongst these are chronic poverty and hunger, environmental degradation, small arms proliferation, civil conflict, vulnerability to natural disasters, resource insecurity, severe abuses of human rights, ill-health, human displacement through war, and the threat of illegal narcotics and organized crime. These issues are often neglected by traditional security thinking, but they degrade the quality of life of millions and have repercussions beyond their immediate impact that are only now beginning to be understood.

HIV/AIDS and SARS

29. The same processes that allow the growth and responsiveness of markets and the free movement of goods, people and capital also allow distinctively negative types of interconnectedness. Epidemiological threats such as HIV/AIDS and SARS are a very real challenge to security in a variety of ways. In terms of human security, the threat is obvious: HIV/AIDS devastates individual life prospects, quality of life, opportunities, social relationships and longevity. It places individuals in a precarious situation: not only in terms of their personal health, but secondarily, through ostracism or even persecution. In terms of societal security, HIV/AIDS can represent a huge burden upon public services, undermine economic productivity, result in unstable and transitory communities, and deter investment. HIV/AIDS decimates human resources, the most vital resource of any country. HIV/AIDS generates an unemployed, aggrieved sub-strata of society that can be a significant source of crime and disorder. Thus individual, economic, societal and political security are all gravely threatened by HIV/AIDS.

30. Southeast and East Asia have not (until recently) been considered to have particularly serious rates of HIV/AIDS, compared to other regions and especially sub-Saharan Africa. However, Asia is now facing a critical challenge that must be met to avoid catastrophe in the future. A number of features of the HIV/AIDS situation in South East and East Asia demand attention: the potential for exponential increases in HIV/AIDS rates in the regions; and the diversification of sources of contagion through intravenous drug use, contagion through improper blood transfusion and in medical institutions, and connected with trafficking in persons for sexual purposes.

31. The SARS epidemic more starkly showed how an epidemic can have a devastating impact upon tourism, trade and human interaction in the region and beyond. The lessons of this point to the need for greater awareness and greater responsiveness on the part of national authorities, and stronger transnational coping-mechanisms.

Human flows

32. The growing trans-border migration in Southeast and Northeast Asia is creating challenges to the national, provincial and local authorities, as well as local communities in each country of the region. This flow of humans is having an impact upon politics, economics, culture, identity, and security. In terms of push factors, poverty drives people from the Philippines, China, Indonesia, and others to move to higher income societies in East Asia (Japan, South Korea, Singapore, Hong Kong, and Taiwan). Conversely, some receiving societies need additional cheap labour. However, the seeming match between supply and demand has not resulted in a smooth flow of humans.

33. Globalization, migration and human security have become inter-twined and need to be considered in an integrated manner to understand the implications of these human flows, to maximize their benefits, and also to respond to their challenges. Some of the challenges relate directly to security concerns, in both the traditional and the non-traditional sense. Among the real and potential problem areas are the presence of an estimated 250,000 Chinese in the Russian Far East and the nationalist response of some local Russians; the presence of an estimated 230,000 or more North Koreans “hiding” in China and their future status in China or in a third country to which they may seek safe passage; the differential legal and social treatment of foreign residents in South Korea between those of Korean ethnicity, including those from North Korea, China, and Russia, and other foreigners; the discriminatory employment practices of Japanese enterprises toward Chinese workers and trainees in Japan; and the alleged criminal activities of a growing number of Russian residents or visitors in Japanese provinces. These issues have a real potential of becoming “securitized” in a bilateral or multilateral context in Northeast Asia.

34. Northeast Asia is characterized by the absence of collective problem-solving experience, institutionalized mechanisms for dealing with migration and other cross-border issues, and a common vision of a shared future. Nationalism and xenophobia are powerful forces that can be (and have been) exploited by local leaders to pursue their own political agenda. A number of practical steps can be considered. In particular, East Asian countries should endeavour to improve coordination in terms of visa rules, minimum wages, and basic rights for migrant laborers crossing national boundaries within the region. Visas which might be exploited by human traffickers or the sex industry – such as entertainment visas – should be more tightly controlled in order to reduce abuse.

Trafficking in humans

35. Trafficking in humans refers to the recruitment, by deception, and transportation of humans for exploitation and coercion. Persons may be trafficked for the purpose of prostitution, other sexual exploitation or forced labour. The selling of desperate and vulnerable young women into sexual bondage has become one of the fastest growing criminal enterprises in the global economy, and Southeast and Northeast Asia are key regions in this as both source and destination countries. It represents a major threat to human rights and a challenge to police enforcement authorities. Rather than being protected and assisted as victims, women in this situation can find themselves in trouble as illegal immigrants or prostitutes. The US Department of State has estimated that at least 700,000 persons, especially women and children, are trafficked each year across international borders.

36. There are often no specific national laws that prohibit trafficking in persons as a crime that encapsulates deception, transportation, coercion and exploitation as a broad process. Trafficking issues have been and often are approached as an issue of illegal immigration and prostitution rather than illegal detention or coercion. Thus, indictments for ‘trafficking offences’ have been low. In some countries, there is evidence that some law enforcement units have been reluctant to investigate reports of trafficking and that governments have not been aggressive in arresting and prosecuting suspected traffickers. Victims are often treated as criminals (prostitutes or illegal aliens) by the legal system because the Government does not consider people who willingly enter for illegal work to be trafficking victims.

37. It is important to deepen understanding of the social, economic, gender, and political contexts of human trafficking. In this era of globalization, neoliberal economic forces have resulted in an erosion of state capacity and a weakening of the provision of public goods. Thus, trafficking may be seen as a symptom of deprivation, as poverty is an important factor leading to vulnerability. Disparities in economic and social conditions provide a clear explanation for the direction and flow of trafficking. Socio-economic factors are clearly key explanatory variables in trafficking. Profit drives every aspect of the trafficking industry from the standpoint of the perpetrators of this crime. Trafficking, generally, occurs from poorer to more prosperous countries and regions. At the same time, modern forms of transportation and communication have aided the movement of people and at the same time enabled transnational organized crime groups and trafficking rings to exploit vulnerable women and children for profit.

38. Policy responses must therefore address both the ‘supply’ and ‘demand’ dynamics of the illegal trafficking trade. Addressing the social problems that make people, and especially young women, vulnerable to deception and exploitation by human traffickers is fundamentally important. However, it is also a difficult and long-term goal. What may be more feasible is improving the standards of professionalism in the immigration and police services of states – especially in Southeast Asia – from where people are primarily trafficked in the region. Treating victims of human trafficking as victims, and not as perpetrators of crimes, as so often happens in this region, would also be a step in the right direction. Highlighting the issue of trafficking – perhaps by establishing a ‘UN year on Combating Human Trafficking’ – would help to mainstream these and other challenges.

Transnational organized crime

39. Transnational illegal activity is a burgeoning threat to governance and the security of individuals, communities and states. In many ways it ties together a number of non-traditional security challenges. Transnational organized crime is a significant force in the organization of illegal drug trafficking, in trafficking in humans, in the movement of small arms, and in illegally diverting resources through corruption. It may also be a factor in the funding and equipping of terrorism and insurgency. Transnational organized crime is a complex and diverse phenomenon. Transnational organized criminal groups can take a variety of forms and sizes. Their relationship to the state can take different forms. Yet it is clear that organized crime does not fall within the jurisdiction of single states. States do not have the capacity to control and regulate the activities of organized crime unilaterally and possibly even multilaterally. Organized crime can represent a threat to the authority of states – through corruption, through supporting illegal activities such as drug trafficking that threaten social cohesion, or even through the incitement of insurgency. It can represent a threat to human security – through weakening government ability to provide services, through the dangers of illegal drugs and human traffickers. There is also increasing concern that there may be a growing relationship – a nexus – between organized crime groups, and especially illegal arms traffickers, and terrorist and insurgency groups. Illegal trafficking in weapons, money laundering, the generation of revenue through the sale drugs, extortion and bank robbery are all means through which terrorist groups and insurgencies are supported. They are also the forte of organized crime.

Environment

40. Environmental degradation can represent a direct threat to individuals – through the effects of pollution, ill health and vulnerability to natural disasters, for instance. It can represent a threat to the coherence and stability of communities – by undermining their capacity to operate as productive communities, or their capacity for the provision of public services. It can also potentially lead to conflict between communities and states, as a result of the spill-over effects of pollution and competition over resource scarcity. The overriding impression of most analysts is that many countries in East Asia prioritized economic growth and industrialized above environmental conservation, and in some countries this has been exacerbated by population growth and urbanization.

41. Whilst most countries in the region have participated in the activities of Agenda 21 that resulted from the Rio Earth Summit of 1992, progress towards sustainable development has been limited. A host of environmental problems afflict the region, and many have a transnational impact: soil erosion, desertification and deforestation in China; unsustainable urbanization and related air pollution; acid rain and water management problems; and ‘yellow dust’ resulting from desertification. In terms of atmospheric pollution, carbon dioxide and ozone depleting chemical are a particular concern which have transnational impacts and which directly result from industrialization and energy use. There is an urgent need for regional states to switch energy sources and/or increase energy efficiency and conservation. Progress in these areas has been achieved; renewable energies are being developed, and energy efficiency improved.

42. Nevertheless, greater regional cooperation is needed in areas such as the management of the north Pacific river and ocean waters, especially the Sea of Japan, the Yellow Sea, the East China Sea and the South China Sea, which are all significantly polluted. Either at the regional multilateral level or at the national level, some form of regulation is required to create both incentives and disincentives.

Trade, Investment and finance: regionalism and globalism

43. Globally, international trade and investment are characterized to a large degree by regional processes and dynamics. This is underpinned by the proliferating number of regional trade agreements (RTAs) around the world. In addition to the creation of new RTAs, this process has involved the expansion of existing agreements, and the linking of existing RTA with other regions. In the global context, East Asia has been relatively slow to develop institutionalized regionalism including regional free trade arrangements, the notable case being the ASEAN Free Trade Agreement (AFTA) of ASEAN since 1992. Nevertheless, the region displays a growing level of economic interdependence, driven to a large degree by Japanese foreign investment and the economic rise of China. The lack of formal institutional trade arrangements can be explained partly through the post-War reliance many countries had upon the US market. Moreover, the US itself did not encourage Asia trade blocs to emerge. Indeed, some analysts have even stated that the US has actively sought to keep Asian states divided, and not only in the area of economics/trade.

44. The Asian financial crisis and the rise of China provided the momentum to challenge this thinking. The ASEAN+3 (China, Japan and Korea) summits in recent years have been dominated by the subject of regional integration in a number of economic/trade areas. The Joint Statement on East Asian Cooperation 1999 pointed the way to greater integration and a number of sub-regional free trade agreements have been under negotiation. Japan has implemented a FTA with Singapore and the Japan-Korea FTA may shortly be moving to the negotiation stage. The AFTA-China and AFTA-Japan FTAs are possibilities in coming years.

45. However, the process towards free trade and integration cannot be expected to be speedy or smooth. Areas such as agriculture are politically sensitive, and large gaps exist in economic performance across the region. Moreover, the unstable security environment creates a hindrance to the regional integration processes. Challenges remain: in addition to focusing on bilateral free trade agreements, policy discussion should focus on ensuring that the benefits of free trade are sustainable and contribute to societies broadly. In addition, discussions should ensure that global free trade commitments are honoured. Discussions should seek to demonstrate the economic benefits that can be achieved from resolving security problems, and progress on narrowing the social and economic gaps that exist amongst countries in East Asia is necessary for regional progress in free trade.

46. The processes of globalization are having an impact upon social systems and cultures in the region. The forces of internationalism, communalism and nationalism interact with various results. Internationalism is overcoming insularity, but nationalism appears to be rising in some societies. Moreover, as pressures to conform to ‘global’ standards of governance emerge, there can be tensions with more communal societies such as China. Rapid economic change is having an impact upon communities. As China develops – a process that will not necessarily benefit everyone in the short-term – and loosens its political control it may experience social and political instability. Economic liberalization may be difficult to achieve in the absence of greater political liberalization. Similarly, Japan will be confronted with the need to overcome its insularity and supplement its workforce with foreign labour to make up the shortfall that will result from its aging population.

Conclusion: Regional Institutions and multilateralism

47. Multilateralism refers to the collective management, whether institutionalized or informal, of common issues and problems. East Asia is notable for relatively weak formalized regional institutions. Yet even the informal consultative arrangements have helped to keep the peace and promote prosperity across East Asia for many decades. Historical sensitivities remain both from the Cold War and even the Second World War, and a number of rivalries and concerns remain between the major regional actors. The high level of militarization and absence of formalized confidence-building or discussion mechanisms perpetuates an atmosphere of tension and insecurity. In turn, this sense of latent suspicions – and outright tension, in the case of North Korea – obstructs progress in developing solid multilateral arrangements. In the security and economic fields, a history of alliances and bilateral arrangements involving external actors, particularly the US, has underpinned progress in the region. However, it has also hindered the development of regional multilateral institutions.

48. The recent past has shown how the absence of institutionalized regional arrangements to deal with trade, finance and investment can seriously undermine how the region responds to economic crises. The SARS crisis, also, demonstrated that it is essential to cooperate more closely in dealing with transnational problems. There are significant benefits to strengthening the multilateral response to a number of problems and opportunities – relating to security, non-traditional security challenges, and trade. A number of developments have been positive in this regard, but they remain very ad hoc and issue-specific in nature.

49. In the area of security, the Four Party Talks brought together North Korea, South Korea, China and the US to discuss their vital regional interests, and particularly to transform the Korean armistice into a permanent peace. The ‘six party talks’ bring together North Korea, South Korea, Japan, Russia, China and the US specifically to deal with the issue of weapons for mass destruction in East Asia. The Korean Peninsula Energy Development Organization (KEDO), where work has currently come to a halt, was also an example of a multilateral approach to a regional security challenge. ASEAN has gradually been prepared to broaden its scope to address issues relating to terrorism and non-traditional security, even though ASEAN’s development has been hindered by internal differences and diversity that have emerged as a result of its expansion.

50. ASEAN has also entered into interlinkages beyond Southeast Asia. Indeed, ASEAN has established relationships with North East Asian states, most clearly in the ASEAN+3 forum. The ASEAN Regional Forum similarly includes North East Asian states in a confidence building forum that could, over time, become a more meaningful and broader arrangement to enhance the peace and prosperity of the region. In addition, a number of regional states are involved in multilateral arrangements that tie the region to other regions – such as the Shanghai Cooperation Organization, which brings together Russia, China, Tajikistan, Kyrgyzstan, Kazakhstan and Uzbekistan to build confidence and security in the region. No doubt the threat of fundamentalism within these countries is on the agenda of the members in addition to transnational cooperation. Cooperation to tackle the three main concerns of the region – terrorism, extremism, 'splitism' – would also help to strengthen economic development and resource exploitation in the region.

51. The Asia-Europe Meeting (ASEM) is a further example of East Asian states building ties with other regions to develop mutually beneficial positions on common issues. Bringing together leaders from two continents, representing 25 countries and the European Commission, gives it the potential for significant political and economic cooperation.

52. In the area of environment, UNEP programmes have dealt with East Asian problems and sought to coordinate national positions. A number of states also cooperate in the Tumen River Area Development Program. In the area of free trade, most formal agreements are on a bilateral basis, although the discussions between Japan, South Korea and China are developing to a possible trilateral free trade agreement in the future.

53. Multilateralism is not an end in itself but rather a means to an end. Nevertheless, it deserves to be the focus of serious policy debate given the central role it has in accomplishing all of the key policy challenges in the area:

- building confidence and friendly relations amongst all sates in the region;

- developing a regime to prevent the spread of weapons of mass destruction;

- promoting free trade and economic stability;

- responding to non-traditional security threats such as terrorism, trafficking in narcotics and humans; and

- developing mechanisms to deal with transnational environmental problems.

54. In considering the development of multilateralism in the region it is worthwhile to rethink the values and institutions of multilateralism in the context of contemporary challenges. The values and institutions of multilateralism are an historical product; there is little reason to believe that they could or should remain static in form and nature. There is evidence that many states believe that ad hoc multilateralism is more flexible and effective than institutionalized multilateralism. The structural changes in power since the end of the Cold War have brought implications for international order and multilateralism, which must be acknowledged. The US-led military action against Iraq, undertaken without explicit UN Security Council authorization, brought this issue to a head. Clearly, given sensitivities in the region, the more delicate problems – such as Korean stability and weapons of mass destruction – may not be appropriately addressed within open multilateral arenas at present. Results are often still most effective through concertation rather than established multilateral bodies such as ASEAN. Nevertheless, security challenges should be approached on a formalized multilateral basis in the longer-term. Further policy areas which should be considered in a multilateral basis in the future include tourism, transportation and health issues – particularly epidemics such as HIV/AIDS and SARS. With this broad agenda in mind, perhaps a multifaceted multilateral forum – an Organization for Security and Cooperation in East Asia, perhaps – could be a long-term goal.

55. Successful East Asian cooperation – especially in the area of economics and trade – also requires addressing and sometimes confronting domestic actors inside regional states that have a vested interest in maintaining the status quo. Civil society and political leadership is important in bringing countries closer and opening up economic systems. In addition, such leadership is important to moving towards a broader notion of identity and beyond the absolute notion of sovereignty.

56. Finally, a less tangible issue that is relevant to building stronger regional cohesion concerns regional identity. Research has shown that, at present, the sense of regional identity of citizens in East Asia is relatively low – compared to West Europe, for example – whilst the sense of national identity is high. Perhaps it is time for the region to build a stronger sense of regional identity. There is a sense that the US influence dominates thinking and policies towards a wide range of issues in East Asia. In a broader sense, it is often felt that East Asian regional norms and institutions are measured against the ‘benchmark’ of West European or North American standards. Whilst interaction with the outside world is fundamentally important to East Asia’s success, it is important that East Asia moves towards the position of being a norm maker and institution builder, not just a norm taker. The development and consolidation of core values which can bring societies in the region together, whilst also promoting diversity, will be fundamentally important to this endeavour.

Dr Edward Newman

Academic Officer, Peace and Governance Programme, United Nations University, Tokyo

October 2003

Wilton Park Reports are brief summaries of the main points and conclusions of conferences. The report reflects the rapporteurs' personal interpretations of the proceedings; as such it does not constitute any institutional policy of Wilton Park or the United Nations University, nor of those organisations associated with the conference, and nor do they necessarily represent the views of rapporteur.

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