Pacific Affairs: An International Review of Asia and the Pacific

Volume 74, No. 1

 

Is a Free Trade Zone Emerging in Northeast Asia in the Wake of the Asian Financial Crisis?
By Kevin Cai

 

Abstract

Largely due to the existing political constraints, the autonomous and market-driven process of regional economic integration in Northeast Asia since the mid-1980s is short of a formal regional grouping. However, the recent Asian financial crisis has provided a catalyst for the initial moves toward a possible free trade zone in Northeast Asia. After tracing this recent development, the article then provides a preliminary assessment of the prospect for a free trade zone in the region and speculates on the possible implications of this development for the political economy of Northeast Asia and beyond. It is the author's argument that, while the regional political conditions remain basically unchanged, regional leaders seem to be adopting a more pragmatic approach to the issue of forming a formal regional economic grouping in the context of the Asian crisis. The formation of such an economic grouping in Northeast Asia would, in turn, inevitably bring significant implications for both economics and politics in the region and even beyond.