PUBLICATIONS & REPORTS

Contents Introduction

This paper reviews the status of economic integration in Northeast Asia and discusses future prospects for economic integration in the region. It also discusses the backgrounds of the rise of Northeast Asia economic integration, regional trade and investment relations, financial cooperation, environmental cooperation, science and technology cooperation and industrial cooperation. Future prospects for Northeast Asian economic integration will be given, followed by a discussion on issues related to a proposed China-Japan-Korea (CJK) FTA.

Due to the political and economic characteristics of the region, Northeast Asian economic integration is being achieved sporadically, focusing on areas where cooperation is in dire need for public interest rather than focusing on systematic integration. That is, economic integration in the region was first advanced in areas where mutual interests could be fully realized, rather than an institutional integration. There remain issues to be solved such as cooperation overlap and inefficiency problem because bilateral cooperation such as Japan-Korea, China-Korea and China-Japan, as well as and China-Japan-Korea trilateral cooperation are intertwined.

Northeast Asian economic integration is expected to press forward. It is highly possible that China is anticipated to become more actively involved in economic integration in Northeast Asia in near future. Korea, which is aiming to become a Northeast Asia economic hub, must set up conditions for the free movement of goods and resources in Northeast Asia as well as improve the internal business environment. As for improving external conditions, the China-Japan-Korea FTA could be an effective method of doing so. Considering China and Japan’s rivalry relationship, Korea’s role as mediator is crucial in the Northeast Asian economic integration.