The purpose of this report is to examine the developing regional architecture—the growing trade, financial, and political arrangements among countries of East Asia—and what that implies for U.S. interests and policy. The types of arrangements include bilateral free trade agreements (FTAs), regional trade pacts, currency and monetary arrangements, and political and security arrangements. The East Asian regional architecture is supported by two distinct legs. The economic leg is strong and growing more intense. A web of free trade and regional monetary agreements is developing rapidly. As U.S. policy toward economic and security arrangements in East Asia evolves, it is turning on matters of job creation, intensity, inclusiveness, and final structure. Singapore, Chile, Brunei, and New Zealand are the original members of the pact. The United States, Australia, Peru, and Vietnam are seeking to join. The TPP could become the basis for a Free Trade Area of the Asia-Pacific over the long term. The political and security leg of the East Asian regional architecture remains relatively underdeveloped. The most progress has been made with ASEAN playing the role of convener and has taken the form of the East Asia Summit established in 2005 (involving all the members of ASEAN plus China, Japan, and South Korea, together with India, Australia and New Zealand), the ASEAN Security Community and ASEAN Regional Forum (ARF). In Northeast Asia, the six-party talks aimed at resolving the North Korean nuclear program have been operating in fits and starts on an ad hoc basis. By relying primarily on bilateral FTAs with Asian nations while still emphasizing trans-Pacific arrangements, such as the Trans-Pacific Partnership, the United States seems to be hedging its bets—not trying to block attempts to create exclusive East Asian FTAs but pursuing deals to keep from being cut out from their benefits. U.S. security interests in East Asia are so great that in issues related to Asian security the United States has sought a seat at the table and often leads in attempts to resolve contentious issues. The United States has joined with Tokyo and Seoul in calling for a Northeast Asia Regional Forum that would include the United States, China, Russia, Japan, and South Korea. At the core of U.S. concern over the developing regional architecture in East Asia is the growing influence of China. The danger exists that if China comes to dominate regional institutions in East Asia, it could steer them down a path inimical to U.S. interests, much as Beijing has already done with the Shanghai Cooperation Organization. The final question for the policy deliberations on trade and security arrangements in East Asia is what form the architecture will take. What Are Regional Trade Agreements? The security related organizations in East Asia are discussed below. U.S. As the London Economist stated, "China ... is more assertive and less tolerant of being thwarted.... From its perceived position of growing economic strength, China has been throwing its weight around...." 
Given China's conclusion of free-trade agreements with its Southeast Asian neighbors and free-trade discussions with Japan and South Korea, it is possible that, in the future, the industrial world could be divided into three large quasi-blocs for trade: North America, Europe, and East Asia. This appears to be a major rationale for the negotiations to join the Trans-Pacific Partnership. The creation of an Asia Pacific FTA encompassing the 21 APEC nations (including the United States) seems distant. This is one trade arrangement that includes countries on both sides of the Pacific. How would a potential East Asian FTA affect the United States?
The global financial crisis, the end of the Cold War, the rise of China, globalization, free trade agreements, the war on terror, and an institutional approach to keeping the peace are causing dramatic shifts in relationships among countries in East Asia. A new regional architecture in the form of trade, financial, and political arrangements among countries of East Asia is developing that has significant implications for U.S. interests and policy. This report examines this regional architecture with a focus on China, South Korea, Japan, and Southeast Asia. The types of arrangements include bilateral free trade agreements (FTAs), regional trade pacts, currency and monetary arrangements, and political and security arrangements.
The East Asian regional architecture is supported by two distinct legs. The economic leg is strong and growing more intense. A web of bilateral and regional FTAs is developing. An East Asian Economic Community (with 13 nations), an East Asian FTA (with 16 nations), and an Asia Pacific FTA (with 21 nations) are being discussed. In contrast, the political and security leg remains relatively underdeveloped. The most progress has been made with the Association of South East Asian Nations playing the role of convener and has taken the form of the ASEAN Security Community (10 Southeast Asian nations) and ASEAN Regional Forum (25 nations, including the United States). In Northeast Asia, the six-party talks aimed at resolving the North Korean nuclear program are ongoing.
As U.S. policy toward economic and security arrangements in East Asia evolves, it is turning on matters of intensity, inclusiveness, and final structure. Should the United States intensify its efforts to either hinder or support the architecture? Who should be included in the arrangements? Should the groupings be exclusively Asian? On the economic side, current U.S. policy appears to be to hedge by not trying to block attempts to create exclusive Asian FTAs but doing deals to keep from being cut out from their benefits. On the security side, U.S. interest in stability, counter-terrorism, and nonproliferation in East Asia is so great that the United States has sought a seat at the table when Asians meet to address security issues. Some also have called for the United States to join the East Asia Summit or to create a Northeast Asia Regional Forum that would include the United States, China, Russia, Japan, and South Korea.
At the core of U.S. concern over the developing regional architecture in East Asia is the growing influence of China. A danger exists that if China comes to dominate regional institutions in East Asia, it could steer them down a path inimical to U.S. interests. Some Asian nations, however, are wary of excessive Chinese influence and are hedging and maneuvering against possible Chinese dominance.
On March 15, 2010, the United States began negotiating to join a regional, Asia-Pacific trade agreement, known as the Trans-Pacific Partnership (TPP) Agreement. The United States, Australia, Peru, and Vietnam are seeking to join with the four existing members of the pact: Singapore, Chile, Brunei, and New Zealand. The TPP could become the basis for a Free Trade Area of the Asia-Pacific over the long term.
The final question for the policy deliberations on trade and security arrangements in East Asia is what form the architecture will take. The industrialized world seems to be evolving into three distinct blocs, North America, Europe, and East Asia, but a trans-Pacific trade and security arrangement that includes countries both of Asia and the Americas also is possible. This report will be updated periodically.