East Asia's new economic integration strategy: Moving beyond the FTA

After the Asian currency crisis, a number of cooperative efforts within an ASEAN?+?3 (APT) framework and Free Trade Agreement (FTA) negotiations between the countries were implemented side-by-side in East Asia.1 1. ASEAN?+?3 meetings were started in 1997 at the ASEAN 30^th anniversary meeting, to which Japan, Korea, and China were invited. Naturally, the motivation for regional cooperation was heightened in the face of the crisis. View all notes An East Asia Summit is scheduled for the end of 2005. If a summit were held, Japan, China, and Korea would be able to participate in regional cooperation along with ASEAN, as equal partners rather than guests, and the discussion about forming a community, the East Asia Community, would reach a new stage.2 2. The exact definition of “East Asian Community” is not necessarily clear, but at the ASEAN business investment summit in October 2004, Prime Minister Koizumi said in his speech that strengthening FTAs and other economic cooperation, implementing joint economic reforms, and closing the development gap were some of the issues that needed to be addressed when building a community. However, there has not been any discussion about the organization of the East Asian Community, such as establishment of treaties or an office. View all notes However, compared to the largely unobjectionable strengthening of “cooperation,” free trade under an official FTA might require adjusting various economic interests, and there is no guarantee that the merits of free trade will outweigh the costs of these adjustments.3 3. It is well known that WTO Article 24 is essentially an FTA agreement, requiring that “substantially all” trade restrictions be lifted within 10 years, but developing countries are exempt from this particular requirement through an enabling clause. The definition of “substantially all” is itself vague, and because of the enabling clause, the majority of FTAs between developing countries are limited to low-level FTAs. The FTA between China and ASEAN is also subject to an enabling clause. View all notes If for a number of reasons the FTA never goes beyond an APEC-style “voluntarism,” the East Asian economic integration on which the community will be built will be a long time coming. For integration to move steadily forward, a new approach is needed that is different from that of the West and that reflects the political and economic structure of East Asia. This paper addresses the issues and dilemmas that have emerged from the complex FTA negotiations in recent years, and proposes a new integrated approach that reflects the structure of East Asia.