“The Northeast Asian Exception” by Malcolm Cook

2018/85, 24 August 2018

It has long been an article of conventional wisdom that the lack of strategic trust between China, Japan and South Korea undermines economic cooperation between the three Northeast Asian trading powers and undercuts their ability to set regional and global rules and standards.

There is much evidence to support this claim when it comes to formal regional trade agreements. The idea of China-Japan-Korea (CJK) free trade agreement first mooted in 2002 remains just that, an idea. Strategic and political tensions between China and Japan and Japan and South Korea have repeatedly paralysed these talks. The ongoing Regional Comprehensive Economic Partnership (RCEP) negotiations do include China, Japan and South Korea among the 16 negotiating parties but these talks are led by ASEAN and are moving, albeit slowly. The Japan-led Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement signed in March currently does not include China or South Korea with little sign of Chinese interest in joining.

Yet, a Nikkei Asian Review story this week shows that important Northeast Asian cooperation setting trade facilitating standards and practices is occurring. China, Japan and South Korea are looking to expand the number of their ports involved in their trilateral container-tracking system. Not only that, the three countries are calling on ports in Southeast Asia and the European Union to join. With 14 of the world’s 30 busiest container ports in China (11), Japan (2), and South Korea (1), these three Northeast Asian countries, led by China, certainly have the market power to promote their shared system regionally and even globally.

Southeast Asian participation in this Northeast Asian tracking system would facilitate trade between the two regions and contribute significantly to the adoption of this tracking system as a global standard. Southeast Asia, led by Singapore, hosts a further six of the world’s 30 busiest container ports.

Looking below the level of formal regional trade negotiations with all of their strategic and diplomatic overtones shows that Northeast Asian trade facilitation cooperation is happening and Southeast Asian states would benefit from joining in.

Dr Malcolm Cook is Senior Fellow at ISEAS – Yusof Ishak Institute.
The facts and views expressed are solely that of the author/authors and do not necessarily reflect that of ISEAS – Yusof Ishak Institute.  No part of this publication may be reproduced in any form without permission.