The order of the world economy has both the aspects of multilateralism in an idealistic view and regionalism in a realistic view. Represented by the WTO, multilateralism has groped for long-term integration of the world economy. Regionalism, represent...
The order of the world economy has both the aspects of multilateralism in an idealistic view and regionalism in a realistic view. Represented by the WTO, multilateralism has groped for long-term integration of the world economy. Regionalism, represented by the FTA, aims for the unification of local economies to protect the benefits of its member countries by combining multiple countries and forming a single market.FTA among Korea, China and Japan will offer economic benefits to the three countries and also contribute to increasing the political power and international influence of the Northeast Asian region. According to the mutual research made by Korea, China and Japan in 2003, FTA among the three countries will offer economic benefits to all three countries in the long term. It will also provide a foundation, allowing Northeast Asia to lead the global economy by playing an important role, along with America and the EU. FTA among Korea, China and Japan can either be promoted independently or extensively by first entering a separate agreement with ASEAN, and then using the connection with ASEAN to enter FTA with each country. Recent discussions concerning integration within Northeast Asia are becoming more active due to the rise of China. In this situation, it is expected that Korea-US FTA will accelerate the promotion of FTA among the three countries that had been stalemated due to political and diplomatic issues such as history and territory, and provide an opportunity for Korea to take a leading role in the processing. There are some reasons in it as the following.The first, FTA between Korea and US mitigated the negative views of the US toward the economic integration of the East Asian region as the US had incorporated into East Asia economy through Korea-US FTA. Therefore, discussions on economic integration in this region are expected to continue more actively. The second, China would promote a bilateral FTA with Korea, because China should reduce the trade diversion effects generated from Korea-US FTA and needs a countermeasure for expending influencing power of US in Northeast Asia. The third, Japan would accelerate the discussion about the bilateral FTA with Korea in case Korea promotes FTA with China, because Japan needs to maintain their economical initiative in Asia and needs to countermove China's economical influencing power in Asian regions in the situation of competing with China to take leadership in Asia.However, there are still many issues that need to be solved among the three countries, such as restructuring industry, removing the non-tariff barrier, and reinforcing competitiveness of the service industry. To resolve these issues and proceed to the next level of economic integration, cooperation of the three countries is vital in the early stage by gradually removing the tariff and non-tariff barriers for trade and unifying different economic systems in each country, and moreover they shall first prepare a systematic structure before entering the stage of integration to ensure the cooperation and mutual assistance on current issues and debates among each other. On the other hand, the FTA among the three countries should be promoted in advance, even though it will cover only a narrow range. Once narrow-range agreement is achieved among the countries, the range can be further expanded to promote more extensive integration in stages.Using FTA with the US as a momentum, Korea shall especially focus on reinforcing industrial competitiveness and raising specialized industries to prepare for the industrial restructuring and international labor division to be discussed among Korea, China and Japan during the promotion of FTA. As FTA with the US has given Korea an advantageous diplomatic position in the East Asian region, therefore, Korea shall first promote FTA with China in order to strategically attract the involvement of Japan, and then actively lure Japan toward an FTA, as well as focus on specialized industries with high value-added properties to accelerate industrial restructuring and reinforce competitiveness.