Trilateral Economic Union in E. Asia Despite Territory Disputes?

I found some remarks made by Ambassador Shin Bong-kil, Secretary-General of the Trilateral Cooperation Secretariat, regarding signs of growing unity and shared responsibility in East Asia despite increasing tensions between China, South Korea, and Japan. In the remarks, which were made during a roundtable discussion at the Center for Strategic and International Studies in early September, the Ambassador claimed that the “deepening economic ties and booming people-to-people exchanges are driving the three countries towards a greater integration than ever before.” Specifically, he pointed to a recent agreement between the three countries to discuss the “Trilateral Free Trade Agreement (FTA)” which he equated to an East Asian version of NAFTA as evidence of this dynamic. In addition, he cited the overwhelming amount of aid from China and South Korea to Japan in the wake of the 3/11 earthquake as evidence of deepening ties.

However, these remarks were made well before the anti-Japanese riots in China and the ROC, as well as the increase of Chinese maritime presence in the Senkaku/Diaoyu Islands. While the Ambassador did mention the dispute between China and Japan (as they stood at the time) in the remarks, it was only in a passing reference and he provided little to no explanation as to why this serious disagreement would not impede any progress on such an economic union.

While the economic ties between Japan and China in particular have become a huge source of revenue for both countries–China is Japan’s biggest trading partner, Japan is China’s third–that trend has shown signs of decline recently. According to recently released economic data (cited in the New York Times), Japanese trade has decreased by 1.4% in the past 8 months after an increase of 14.3% last year. According the the NYT article, Japanese officials blamed both the global economy but also “concerns over political issues.” Officials added that growth of investment from Japan to China has slowed to 16% growth in the most recent 8 months, with the same period last year showing a 50% growth. This news comes despite Japan’s “near-total reliance” upon China for rare earth minerals, as “Japanese companies seek out countries with even cheaper work forces and less-touchy diplomatic relations.”

Despite the incredible volume of trade and dependence China and Japan share with one another, it does not appear to be enough to smooth over these “concerns over political issues,” nor is it a situations that many Chinese citizens support, as protests in China have exposed a segment of the population that does not appreciate the amount of trade done with Japan. Still, both countries seem to need the other for the near future, as both economies are very fragile, still weathering a tenuous global recovery.


1 thought on “Trilateral Economic Union in E. Asia Despite Territory Disputes?

  1. the prof
    Economic integration in Northeast Asia has been a topic for at least a couple decades, and is one component of the founding of APEC (Asia Pacific Economic Cooperation). However, to what extent do you need political ties and not just “natural” economic ones? China is [perhaps with the except of last month!] Japan’s largest trading partner, surpassing the United States in terms of both imports and exports. [The US was Japan’s largest trading partner from 1945-2008 or so.] How can we define “integration” and what can enhance / detract from the gains from trade implicit in that?
    We’ll read the IMF reports on Japan towards the end of the term to help us think more about such issues.

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