Serious discussions and possibility for regional trade arrangement in Northeast Asia has increase dramatic in recent times. While Korea has been negotiating with Chile for the launch of a FTA between the two countries, the possibility of a Korea-Japan FTA is also being reviewed. In the midst of on-going discussions, following changes in the international economic landscape, a growing opinion that Korea needs to redirect her interest towards a Korea-China FTA or a Korea-China-Japan FTA is now becoming popular. Japan, on the other hand, after successful negotiation for a Economic Partnership Agreement with Singapore, is now seriously pushing for a FTA with Korea. Japan, it would appear, wants to use the Korea-Japan FTA as a stepping stone towards creating a FTA with China and other Northeast Asian nations. In a separate move at the ASEAN+3 summit meeting last year, China proposed a FTA with ASEAN nations.

The suddenly increased interest on regional trade agreements in this part of the world seems to follow the surge in regional trading blocks since the 1990s. Interestingly, the Northeast Asian region is the only region that does not have a regional trading arrangement which gives preferential treatment among member nations as yet, and as such are in a relatively disadvantageous position. Despite the recent surge in the pursuit of a regional FTA, progress is at best only superficial. The stakes for regional economic integration seems to be huge and, fearing a situation whereby the benefits of integration may not fall into their territory, Northeast Asian nations, particularly Korea, China, and Japan are competing almost relentlessly with each other to take the initiative in regional agreements. Carefully calculated steps toward Northeast Asian economic cooperation are therefore important and critical at this stage, such that the benefits of economic integration may be shared without any unfairness.

In this book, a three-stage approach for the Northeast Asian Economic Integration is proposed. While an East Asian Free Trade Agreement or an East Asian Common Market can be viewed as an ultimate goal for economic integration in this region, it is necessary to deal with cooperative regional industrial restructuring as a first step. This book comprehensively addresses this first step looking at ways to enlarge regional trade volume and promote collaborative industrial restructuring among business corporations. By analyzing HS 6 digits OECD trade statistics, the various bottlenecks in trade among Korea, China, and Japan are identified. A comparison of the competitiveness of each product group is carried out, and suggestions are made that may promote business cooperation. This book also contains detailed studies for the possible business cooperation in the telecommunication, petrochemical, and energy and environmental conservation sectors. Finally, the economic effects of the removal of trading impediments among the three countries is studied, once again emphasizing the modification of trade and industrial structure as a pre-step for the regional economic integration.