March 1, 2006｜Korean Peninsula
Chang Jae Lee
Director, Center for Northeast Asian Cooperation, Korea Institute for International Economic Policy
In terms of trade and investment, economic cooperation in Northeast Asia has made remarkable progress over the last ten years or so. However, in contrast to rapid functional economic integration, the institutionalization of trade and investment is still inadequate. At the same time, although various dialogues and discussions have been proposed in the fields of energy, railways and the environment, on which initial interest in economic cooperation in Northeast Asia focused, the actual outcomes have fallen short of expectations. Among the international political problems within Northeast Asia we can see another characteristic of economic cooperation in Northeast Asia. Although countries around the world are breaking free of the Cold War and nationalism, these still persist in Northeast Asia and this is a serious constraint on the institutionalization of economic cooperation in Northeast Asia.
For a long time, the concept of a Northeast Asian Economic Community was employed in the vision for economic cooperation in Northeast Asia, and there are probably no objections to such a community being the ultimate focus of economic cooperation in this region. The problem is that the reality of Northeast Asia is far removed from European integration, with which the term economic community is associated, so the vision for a Northeast Asian Economic Community is not acting as a centripetal force promoting increased economic cooperation in Northeast Asia.
Consequently, this author believes that, at this point in time, the focus of discussions concerning Northeast Asian economic cooperation should be a more practical long-term target, rather than the ultimate vision of a Northeast Asian Economic Community. Moreover, I would like to propose the concept of a Northeast Asian Economic Cooperation Body as a concrete scheme to this end.
An economic community usually signifies the formation of a supranational executive mechanism, but as it will be difficult to achieve this in Northeast Asia in the near future, this suggestion focuses on the target of creating an intergovernmental consultative body in the form of a Northeast Asian Economic Cooperation Body.
The Northeast Asian Economic Cooperation Body would notionally consist of two major pillars. One would be the organization of consultative bodies for such individual sectors as energy, transport and the environment, which are the main fields of economic cooperation in Northeast Asia, followed by the formation of a Northeast Asian Economic Caucus that would bring these individual consultative bodies together. Rather than focusing solely on cooperation in specific sectors, it could also act as a consultative body dealing with various matters, such as discussions about various concerns, and the promotion and evaluation of joint projects. The other pillar would be a Northeast Asian FTA with an element of institutional economic integration. Unlike in Europe, it would be difficult to pursue a customs union or a common market, but it is hoped that, by means of a legally binding Northeast Asian FTA, a Northeast Asian Economic Cooperation Body could be positioned as a regional cooperative entity, rather than just a consultative body involving the countries of the region.