Northeast Asian economic community
By Ahn Choong-yong
Since the eruption of the Asian financial crisis in 1997/98, many political leaders and scholars in East Asia have proposed a variety of concepts for an East Asian economic community, emulating the European integration process as well as the North American Free Trade Agreement (NAFTA). As a result, substantial progress has been made within ASEAN plus China, Japan, Korea framework in the areas of financial cooperation first and then moving toward trade liberalization. Despite the geographical proximity, East Asian economies recognize that their intra-regional trade linkages have remained far lower than those of EU and NAFTA although the region’s economic growth was branded as the East Asian miracle. It is a great irony that East Asian economies have exhibited one of highest savings rates in the world but still depend on financial mobilization from western financial institutions due to the region’s financial backwardness. These harsh realities have awakened in East Asians the notion of an “East Asian Identity.”
Whether the externally motivated East Asian Identity evolves into a meaningful integration entity, everything boils down to what stance the big three countries in East Asia, namely China, Japan, and Korea would take and how they view the emerging East Asian economic landscape. China, Japan, and Korea, which share roughly 90 percent of the ASEAN + 3 GDP, should sit in the driver’s seat to move the Asian Economic Community movement forward. The big question is who is driving. Is one country driving all the way or alternating?
Against this backdrop, it is encouraging that China, Japan, and Korea in May 2010 agreed to establish a secretariat’s office in Seoul to address both top-down and bottom-up regional cooperation issues. Furthermore, they also formalized trilateral investment treaties in May 2012 to facilitate intra-regional cross-border investment. Most importantly, the leaders of the three economies agreed to launch official negotiations for tri-lateral FTAs within this year. Numerous ministerial meetings and academic exchanges have also taken place to discuss diverse regional collaborations. Dynamic benefits have also been recognized by generating common standards for production technology, distribution, and logistic cross-border connectivity.
Given these promising developments in Northeast Asia, it is extremely unfortunate and worrisome to see recent nationalistic confrontations by political leaders and even public sentiment on the ocean territorial disputes and long-standing historical legacies. Should we let the recent nationalistic animosities explode into an unmanageable collapse of on-going economic collaborations we have built up over nearly the past two decades? The answer is definitely no. After seeing the most destructive typhoon in years passing through the Northeast Asia a few days ago, devastating earthquakes and seriously deteriorating environmental conditions in the region, it is imperative that the three countries work together to avoid natural and manmade disasters simply because they are immediate neighbors.
People in China, Japan, and Korea share common cultural heritage throughout our long history while cultivating rice for a living, which requires community efforts to irrigate the land and weed on time for good harvests. More importantly, even common people perceive education as the most valuable human deed. They have developed fundamental human consciousness and virtues saying that it is a great pleasure for man to learn something new and to receive friends from a distance.
Human consciousness tells us that history speaks for itself and cannot be distorted for any country’s nationalistic objectives. It is time for political leaders in Northeast Asia to commit more deeply than ever to carry on with an agreed economic agenda towards open viable economic integration. We should envision a human-technological utopia in which human dignity, consciousness, freedom, and creativity are mutually respected and a sustainable growth mechanism is also secured. China, Japan, and Korea must work harder so that cross-border value chains, intra-regional demand creation for economic recovery, job creation, and green growth can flourish by cross-promotion of trade, direct investment, tourism and academic exchanges. Perhaps, this is a viable way of calming down political leaders’ rhetoric. Northeast Asia must be viewed as a natural economic territory not as a region of disputes.
The author (cyahn@cau.ac.kr) is also currently the Foreign Investment Ombudsman of Korea Trade-Investment Promotion Agency.