Trade bloc is distant goal for Korea, Japan, China
Joong Ang Daily | September 11, 2009
Trade bloc is distant goal for Korea, Japan, China
More vigorous regional trade would also cushion the countries’ economies against a global crisis.
As Europe works through the issues of regional economic integration, many look at Korea, Japan and China, with their close geographical, linguistic, historical and cultural relationships, and wonder if perhaps they might one day form some sort of Northeast Asian union.
But according to the Korean Finance Ministry yesterday, that remains a distant dream.
A report from the ministry showed that three-way trade among Korea, Japan and China is still far lower than trade within the European Union or even the North American Free Trade Agreement. As of 2007, imports and exports between the three Asian countries accounted for only 22 percent of their total trade, the ministry wrote. In contrast, 68 percent of trade by EU countries was with other EU members. The corresponding figure for Nafta was 51 percent.
Shipments between the Asian partners also focused on intermediary rather than consumer goods, with the former accounting for 56.4 percent of all trade in the second quarter, compared with 31.0 and 33.8 percent for the EU and Nafta, respectively.
“Given their economic relationships, trade among the three countries could be much higher than it is now,” said an official of the ministry who declined to be named.
Trade among Korea, China and Japan also needs to increase to shield against another global crisis, the ministry said, since an expanded market within Northeast Asia would cushion it against falls in global trade.
The countries have been working to reduce trade barriers. Negotiations on a three-way free investment pact started in January 2007, with the seventh roundtable held in July.
“Through a Korea-China-Japan investment pact, we can provide a stable and predictable institutional frame for three-way trade,” the ministry said in its report.
