Asia-style regionalism works well

DESPITE its current problems, the European Union (EU) is often considered to be the gold standard for countries working together for peace and prosperity. While there are many types of regionalism in the world - North America has Nafta, South America has Mercosur, Australia and New Zealand have Closer Economic Relations - Asia is seen as a latecomer.

This is actually the time for a perfect role reversal: Today's Europe needs to embrace Asia's original private-sector orientation, while Asia now has Europe's starting point of using trade to overcome difficult history.

What is unique about Asian regionalism in a global context is that it has been substantially market-driven. This move started in 1985, following the Plaza Agreement to revalue the yen, when many Japanese companies began offshoring labour-intensive manufacturing activities to lower-cost destinations, such as the Asean countries of South-east Asia and China.