A China-Japan-South Korea Trade Pact Could Change The Politics of Korea

Amidst all the discussion between Prime Minister Wen Jiabao, South Korean President Lee Myung Bak and Japanese Prime Minister Yukio Hatoyama at their tripartite summit this weekend about how to deal with North Korea, was some significant progress on creating a free trade agreement between the three countries. To the emerging generation of China’s leaders born after the Korean War — and particularly to the next generation of leaders of the Party’s International Department, which is a more important determinant of policy towards North Korea than the Foreign Ministry — that may be of more lasting significance than propping up the ally on whose side China fought against South Korea and the U.S. more than half a century ago.

Lee’s spokesman said the president had “stressed the need to enhance economic cooperation between the three countries and work toward integrating their economies.” The three countries agreed to set up a permanent liaison office in South Korea next year and to pursue a free-trade agreement. This is not a new idea, of course. A lot of work has been done on it at a semi-official level over the past several years and China, Japan and South Korea are already tied closely by trade and investment as well as geographical proximity. The same three leaders discussed a free trade agreement when they met for their summit last year. This year, the language being used to describe their latest discussions seems more purposeful.

There have been some grandiose thoughts about creating an Asian equivalent of the European Union. That is a long way off,  perhaps impossibly far off, but the three countries are the region’s three largest economies, collectively accounting for 16% of world GDP, so would be a formidable bloc just by dint of their economic size. Japan and South Korea are already China’s largest trade partners after the U.S. and the E.U., and delivering economic growth is a policy priority for the Party for all the well-rehearsed reasons of self-preservation. That is one reason that Beijing is doing what it can to ease tensions on the peninsula, to preserve stability in the region. Changing the economics of East Asia, and thus the interests of the free-trade participants, could change the politics of the peninsula more rapidly than the diplomats can.

1 Comment

Filed under China-Japan, China-Koreas, Economy

One response to “A China-Japan-South Korea Trade Pact Could Change The Politics of Korea

  1. Pingback: New Japanese Prime Minister Unlikely To Reverse Course On China Policy « China Bystander

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