The Institutional Analysis And Approach Choice In Establishing The Free Trade Area Between China, Japan And South Korea

While the argument over the doubt is still going on whether the regional economic integration will block or promote the development of economy, it has been a fact that a number of integrated regional economic organizations are being set up and developed continuously under the promotion of new regionalism since the 1980s. At present, three economic areas have come into being in the world. With the European Union's eastward expansion, a lager area of integrated regional organization is coming into being in Europe. North American Free Trade Area is becoming stronger, and once the Whole American Free Trade Area is built, the competition between the EU and AFTA will be even more severe. However, the progress of the regional economic integration in the East Asia is much slower, and the regional integration is developing under the mechanism of "ten plus three", the systematization is still weak. Moreover the Northeast Asia is still a blank of the regional cooperation, and a proper system hasn't been introduced between China, Japan and South Korea, which doesn't match the economic power of these three countries. Therefore it is necessary to make regional arrangement and systematize it between the three countries. Based on the relative theory of regional integration, by means of the quantitative and qualitative method and the frame of institutional economics. This paper mainly focuses on the cooperation between China, Japan and South Korea.It points out that the free trade area between China, Japan and South Korea(CJKFTA) should be the leading pattern of regional cooperation in the East Asia. This paper contains four parts. Firstly, it studies the evolution of the theory of regional economic integration and the practice of the integration in the East Asia and its sub-region. Secondly, it analyses the economic relationship between the three countries on the aspects of trade, investment, finance and industrial division. Then, using the benefit-cost method of institutional economics, it analyses in details the difficulties and the possible benefits of building the CJKFTA. At last, the paper discusses the pattern and the timetable of building the free trade area, and brings forward some advice on CJKFTA.