5 - Regional Economic Cooperation in Northeast Asia: Issues and Prospects

Summary

Development of East Asian countries such as China, Japan, and the Republic of Korea (ROK) depends to a large degree on their multilateral economic cooperation in NorthEast Asia (NEA). Lately, especially in the second half of the 1990s, commercial, investment and technological exchanges between them grew up significantly both on the bilateral and multilateral levels. At the beginning of the first decade of the twenty-first century regional economic cooperation in NEA entered its new stage of development. New economic situation in China, Japan, and the ROK, latest trends in their foreign economic policies as well as a growing involvement of Japanese, Chinese, and South Korean companies in international business activities typical for the era of globalization were among most important factors influencing regional cooperation. Under these conditions economic relations between the three countries in fact deeply influenced the whole architecture of regional economic framework.

The emergence of NEA regional cooperation depended on several key factors. Thus, active consultations between Japan, China, and the ROK on many important regional issues came as a result of their reduced confidence in international economic organizations since the latter proved to be unable either to prevent the 1997–98 East Asian economic crisis or to minimize its consequences. Also constant disputes among WTO members paralysed the WTO modernization. According to the NEA countries the failure of negotiations in Cancun (Mexico) was bad news symbolizing the slow down of reforming international trade and of cooperation at the global level. As a result many countries decided to upgrade their economic structures as well as their foreign economic relations by improving regional economic cooperation. Japan, China, and the ROK were among them.

APEC IN CRISIS

There was growing skepticism among APEC members, including the NEA countries, regarding efficiency of APEC as an international economic organization. In fact APEC failed to initiate an anti-crisis policy in the second half of the 1990s and also failed to offer any assistance to the countries in need during the crisis.