Asia’s Next Axis

Last month, the leaders of China, Japan, and South Korea agreed to begin negotiations later this year on a trilateral free-trade agreement. If the talks succeed, the global trade map will need to be redrawn.

SEOUL – Last month, the leaders of China, Japan, and South Korea agreed to begin negotiations later this year on a trilateral free-trade agreement. If the talks succeed, the global trade map will need to be redrawn. An FTA that encompasses, respectively, the world’s second, third, and 12th biggest economies (in purchasing power parity terms in 2011), with a population of 1.5 billion, would dwarf the European Union and the North American Free Trade Agreement, comprising the United States, Canada, and Mexico.

Indeed, Northeast Asia would become the third major axis of regional economic integration, following the EU and NAFTA. Until now, the region has been unable to institutionalize economic cooperation as vigorously as Europe and North America have. But if the proposals discussed in Beijing last month are realized, the resulting FTA could surpass NAFTA in its degree of integration and importance to the world economy.

In addition, the formation of a China-Japan-South Korea FTA would most likely trigger a chain-reaction. For example, the momentum could expand southward and stimulate ASEAN, which has bilateral FTAs with all three countries, to join the group. Such a turn of events would be equivalent to establishing the East Asia Free Trade Area, which the ASEAN+3 envisioned about a decade ago. If that happened, other countries – Australia, New Zealand, and, most importantly, India – might seek to jump on the bandwagon.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

required

By proceeding, you agree to our Terms of Service and Privacy Policy, which describes the personal data we collect and how we use it.

Log in

http://prosyn.org/DgSFQ0s;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.