Their economies enmeshed as never before, leaders from China, Japan and South Korea said over the weekend that they would explore the idea of a free-trade pact, inching toward deeper regional integration.

Prime Minister Wen Jiabao of China and the leaders of Japan and South Korea declared that they were “committed to the development of an East Asian community,” and agreed to expand cooperation across a wide range of issues, including climate change and sustainable growth. (New York Times)

Kind of an old story at this point, but the spectre of an East Asian trading bloc gets thrown around every couple of years, I think mostly to scare the crap out of the U.S. government and force all the guys at the State Department and the USTR to work overtime preparing memos on the topic.

While there has been a lot of work done, particularly with the ASEAN+3 group (the three being Korea, PRC, and Japan), it’s mostly a lot of talk. Some limited progress has been made on the trade front, but to go so far as a real FTA or Customs Union* with EU-ish structures — hard to see that happening for a very long time. More likely we will see greater regional cooperation on specific issues (the environment was mentioned in the Times article).

* FTA, Customs Union — Lapsed into WTO-speak (or is it GATTese?). A FTA is a free trade area. Both are recognized under the GATT/WTO as permitted exceptions to the Most-favored Nation principle. The EU sort of fits under applicable GATT provisions, although some folks argue that it is actually GATT-inconsistent. Too late for any real challenge, though, so since the EU was formed, any new FTAs sort of get a free pass. Funny, that.

Anyway, the only effect of all this news on an East Asian community, or FTA, or Customs Union, is that China bashers will have more evidence that the PRC is trying to kick the US out of Asia and topple the dollar. Additionally, Fred Bergsten at the IIE will probably write yet another article about why the US should revive APEC. You know, the usual.

Boring. Nothing to see here. Move along.

This entry was posted on Wednesday, October 14th, 2009 at 11:45 pm and is filed under International Trade. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.