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Different Paths to Economic Integration in Europe and Asia

ADB 2020.01.10
Europe and Asia followed very different paths to economic integration after 1945. By 2000, an economic union with free movement of goods and factors of production and a common currency linked much of Europe. Meanwhile, effective economic integration agreements were absent from Asia, although countries in East and Southeast Asia were becoming linked in global value chains (GVCs). Since 2000, Asian governments have been more active in negotiating deep trade agreements, of which the distinctive feature is open regionalism. Although the political difference between the European Union and the Asian system of nation states will remain, the EU’s external trade policy and many Asian countries’ policies are converging toward a model of liberal trade regimes plus collaboration in establishing common norms in other areas that are important to GVC operation (so-called WTO+ issues). The outcome will be greater economic integration in Europe and Asia of countries seeking to benefit from globalization, and, while Asia and Europe will lead the process, it will be open to any willing partners.

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