This collection of papers by prominent economists from the United States and East Asia is a gold mine of insights into Asia-Pacific economic regionalism and its likely impact on the global trading system. The papers are concise, punchy, and meaty. Paul Krugman identifies the central issue: should regional trading agreements be welcomed as a step toward global free trade, condemned as institutions that undermine the multilateral system, or grudgingly accepted as the best we are likely to get and preferable to a breakdown of the multilateral system? He comes to a modest conclusion: states' ability to support cooperative solutions at a multilateral level are declining, while such cooperation remains strong at the regional level. Lawrence Summers is more emphatic in arguing that regionalism is desirable and that "plausible" regional arrangements will have trade-creating effects. Summers also advances several arguments for supporting regional economic arrangements, including one that is not sufficiently recognized. Regional arrangements help lock in good domestic policies. If Mexico flourishes under domestic reform and in NAFTA, the rest of Latin America may follow suit. The same argument is valid in East Asia. The success of China's economic reform has been followed in Vietnam.
The two editors of this important book, Peter Drysdale and Ross Garnaut, are prominent Australian economists who have long been associated with the idea of establishing a trans-Pacific economic grouping. They offer insightful introductions and contributions that stress the differences between East Asia's market-driven "open regionalism" and the government-driven regional arrangements in Europe and North America.
In sum, this is an indispensable volume not only for economists but for all those with an interest in East Asian international relations.