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Posted : 2012-05-23 17:09
Updated : 2012-05-23 17:09

Northeast Asia ― a region without regionalism

By Leonid Petrov

The last week once again demonstrated to the world the sad truth about the inability of Northeast Asian nations to establish good working relations in political and economic spheres. The ambitious plan to build a free trade zone across China, Korea and Japan was pompously declared, only to stumble over the old unresolved issues and prejudices. The legacies of colonialism, international wars and civil conflicts persist, thwarting any attempts to rebuild trust and achieve multilateral cooperation.

The first and most important step in ending the Cold War in Northeast Asia would be diplomatic cross-recognition by former ideological foes. After the collapse of the Communist Bloc 20 years ago, Beijing and Moscow did establish diplomatic and extensive economic relations with South Korea. However, Washington and Tokyo reneged on their promise regarding recognizing North Korea. This continues to create numerous tensions in the region and postpones any prospects for reconciliation between Koreans themselves.

The creation of a network of free trade agreements (FTA) between the neighboring states would be the second major step toward the regional integration of East Asia. Japan and China, who established diplomatic relations 40 years ago, have yet to enter talks for a bilateral trade pact. South Korea and Japan suspended negotiations for a bilateral FTA in 2004 and have made little progress in resuming the efforts. This year Seoul has agreed with Beijing to start negotiations for a bilateral FTA, and the first session took place in Beijing on May 14.

The trade ministers from South Korea, Japan and China for the first time agreed to launch negotiations for a three-way FTA by the end of this year. South Korean President Lee Myung-Bak met in Beijing with Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda for annual summit talks, where they discussed the future of tripartite economic cooperation. The three leaders shared the view that a trilateral deal would boost trade and investment among the three countries and provide the framework for comprehensive and structural cooperation.

They also discussed the continuing North Korean provocations, but the absence of North Korea in these negotiations was conspicuous.

The result of a successful regional FTA would mean all products produced in this country could be freely sold in South Korea and Japan, helping its flagging economy. Similarly, the lack of consumer goods in North Korea could be rectified by the influx of quality products from South Korea and Japan, but for ideological reasons this opportunity remains closed.

Interestingly, despite the continuing political confrontation between the People’s Republic of China and Republic of China in Taiwan these two competing states managed to sign a bilateral FTA in 2010 that signified improved relations and willingness to build trust through economic cooperation.

It is hardly a coincidence that just days prior to the trilateral summit in Beijing, the president of the Presidium of the Supreme People's Assembly of North Korea, Kim Yong-nam, went on his first foreign trip since the death of Kim Jong-il. The ceremonial head of the North Korean state headed not to China but to Southeast Asia where he met with President of Singapore Tony Tan and the city-state’s parliamentary leader Michael Palmer. On this visit Kim Yong-nam was accompanied by Ri Kwang-gun, who heads the Joint Venture and Investment Commission, and An Jong-su, the minister of light industry. Obviously, North Korea was trying to attract foreign investment by offering itself to manufacturers interested in cheap labor, as well as to boost exports of its own consumer products and minerals. In Singapore, the leaders discussed a variety of issues, including the situation on the Korean Peninsula and bilateral relations, but President Tan and Mr. Palmer stressed that while Singapore was open to advancing bilateral relations with North Korea, they were constrained by the fact that the nation remains subject to United Nations Security Council (UNSC) sanctions.

The following day, North Korea’s second-highest ranking official flew to Jakarta, the capital of Indonesia, where he also drummed up support for foreign investment. Most Western multinational companies avoid direct business with the North because of the existing U.S. trade embargo. Washington has warned financial institutions in Singapore and other countries of Southeast Asia that they should not do business with North Korea. Banks in Macao and Singapore stopped doing business with it several years ago. What is the reaction of Indonesia to such pressure?

Indonesian President Susilo Bambang Yudhoyono called for dialogue to resolve problems on the Korean Peninsula, while Foreign Minister Marty Natalegawa suggested that isolating the North further was not a constructive solution. When discussing the issue of the controversial rocket-satellite launch, Yudhoyono underlined that misunderstandings should be avoided through dialogue and communication. Kim Yong-nam was assured that there are areas where cooperation is possible. For example, the two leaders resolved to raise political relations between the two countries by promoting visits by officials, ministers, managers and media professionals of the nations. The media swap deal between North Korea and Indonesia will allow networks in both countries to share content and participate in journalist exchanges.

Pyongyang is clearly trying to curb its excessive reliance on China by reaching out to other countries in Asia. But how many countries can or will help the North integrate successfully? Why should North Korea look for partnerships away from its own region? Would not it be more logical to improve relations with its immediate neighbors, namely South Korea and Japan? Is the United States or Russia willing to see the three countries building a genuine free trade platform in the region? The combined populations of the three major Asian powers is around 1.5 billion people, with an aggregate GDP of some $15 trillion or 20 percent of the world's total. The establishment of a multilateral FTA would definitely help lay a foundation not only for a strong economic partnership, but also for trust, reconciliation and reliable peace in the region.

Meanwhile, euphoria about the prospects of a trilateral FTA did not last long. At the press conference after the summit, President Lee looked less enthusiastic than his Chinese and Japanese counterparts. Lee said the trilateral FTA would be meaningful to the countries' future, but avoided answers regarding the possibility of concluding the negotiations within two years. Also, Chinese President Hu Jintao refused to meet with Noda without explaining the reason. Was this cancelation caused by the heated debate which unfolded on May 13 between Wen and Noda over the sovereignty of the disputed Tiaoyutai/Senkaku Islands? Or was it retaliation by China for Japan's granting of a visa to Uighur leader Rebiya Kadeer to run the World Uyghur Congress in Tokyo on the same day?

Whatever the reason, the developments of the last week showed once again that domestic affairs appear to have more weight for the leaders than regional projects. The disputes of the 20th century continue to affect the hearts and minds of politicians in the two Koreas, China and Japan. And it may take longer than expected before regionalism in Northeast Asia will prevail over political mistrust and economic protectionism.

Leonid A. Petrov is a lecturer in Korean studies at the University of Sydney, Australia. He can be contacted at leonid.petrov@sydney.edu.au.

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