A Research On The China-Japan-Korea Free Trade Area

The fast development of economic globalization accelerates the trend toregional integrated economic. But, the development of regional integratedeconomic is not balanceable in the world. Compared with the area ofWest-Europe and North-America, the regional integrated economic in EastAsia, especially for three countries of China, Japan and Korea which occupy90 percent of economical gross of East Asian countries, goes slowly. It is notaccordant with the economical level and position of three countries in theworld. After the frame agreement on building Free Trade Area (FTA) betweenChina and Association of Southeast Asian Nations (ASEAN) was subscribedat 2004, the cooperative perspective among China, Japan and Korea becamenoticeable. Based on above presentation, the conceptions ofChina-Japan-Korea FTA are taken as the object to discuss the background,economical effects, existing problems, future and suggestions of establishingthe China-Japan-Korea FTA in this thesis.In this thesis, based on the definitions of FTA, the current situation ofFTA development and related backgrounds of building China-Japan-KoreaFTA are described detail. The strategy and realistic importance of establishingChina-Japan-Korea FTA are explained through the era development, economicmatch and reasonable political air. Then, the effects resulted from FTA and theworks needed to do for building FTA are analyzed. And the conclusion of "theforming of China-Japan-Korea FTA can optimize the economical structures ofthree countries, enhance the competition of products of the three countries andbecome more important in the platform of world economic" is draw. At last,the material suggestions for how to build China-Japan-Korea FTA areproposed. These suggestions include mainly forming multi-level andmultifarious talking and cooperative mechanism, developing preferentially thecooperation in companies and industries and striving for political trustactively.The FTA is an important embodiment of regional integrated economic.The definition, effects and development of Free Trade Agreement areintroduced in the first chapter. The author thinks that the free trade agreementmeans that the law files set-up in two or more custom areas. The free tradearea is the region formed by two or more custom areas based on the free tradeagreement. The custom and other limit measures on trade are cancelledpractically. The building of FTA will reduce the custom, promote the trade andproduce the static effects including positive trade creation effect and negativetrade transfer effect among countries in the region. The building of FTA alsoproduce more extensive and long-term dynamic effects, increase thepossibility of realizing scale economy of industries, stimulate the competitionof market, optimize the arrangement of resources and improve the investmentenvironment.The related background and necessity of establishing the FTA in China,Japan and Korea are described in the second chapter based on thedevelopment situation of East Asia FTA. The strategies of China, Korea andJapan are analyzed. The era development, strong match among the economic,industrial structure and resources of China, Japan and Korea, and reasonablepolitical air all clarify the necessity of promoting the economical collaborationand building regional integrated economic. The author thinks that the formingof the China-Japan-Korea FTA has strong strategy and realistic importancebased on the fast development of regional integrated economic in the world,the practical development of East Asia economical cooperation and starting toplan individual FTA strategy in the three countries.The economical effects resulted from China-Japan-Korea FTA areanalyzed in the third chapter. For China, the forming of FTA will improve theenvironment for foreign trade, push the development of foreign trade, increasethe quantity and quality investment and elevate the international competitionof Chinese enterprises. But, at the same time, FTA will make Chinesecompanies and markets to face stronger competition and risk from economicalcooperation. For Japan, the forming of FTA will increase slightly the real GDP,enlarge the trade surplus to Korea and China, get great impact in agriculturalproducts, garment and fishery product. For Korea, the forming of FTA willincrease the GDP, enlarge the trade surplus to China and trade deficit to Japan.The dynamic economical effects to Korea resulted from FTA is the mostinconspicuous among the three countries. Generally, the establishment ofChina-Japan-Korea FTA can accelerate the economical cooperation inNortheast Asian area and the forming of East Asian economic community,influence greatly the economical and industrial development of three countries,and enhance the dependence on each other.The developing prospect of China-Japan-Korea FTA is discussed in thefourth chapter. Through the trade volume increase year by year between Chinaand Korea, Japan and Korea, China and Japan, the proportion of trade amongthe three countries are still small, which demonstrate that the cooperativepotential in the three countries is great. The mutual complement features inproduction factors and industrial structure will optimize the resources. Therelationship among China, Japan and Korea is close in geography, history andculture. All these factors supply material base and opportunity to the buildingof China-Japan-Korea. There are still disadvantageous factors to establishingthe FTA. These problems include the different standpoint to FTA, the diversityin economical level and economical system, the difficulty in opening theagriculture products and the political conflict. If these problems could not beresolved effectively, the economical cooperation and the course ofestablishing the China-Japan-Korea FTA will be baffled considerably.Based on the status of economical cooperation and existed problems, thesuggestions are proposed for driving the development of China-Japan-KoreaFTA. These suggestions include: mapping out the corporate-win FTA scheme.The cooperation in two sides can be used to drive the cooperation in threesides after the FTA framework is agreed;optimizing the economical and tradestructure, improving the trade deficit in the three countries, replacing thetraditional cooperative method of "perpendicularity-complementarity" inindustrial structure with "level-division". The three countries should applyindividual advantages to develop the market outside the region and to elevatethe competition of products;forming multi-level and multifarious talking andcooperative mechanism. The establishment of FTA needs that the politiciansrecognize the situation, the enterprisers exploit the new fields continually, andthe researchers find problems and propose valuable suggestions;developingpreferentially the cooperation in companies and industries and fasting the FTAcourse. The cooperation in partial industries and companies will influence anddrive other companies and industries, and accumulate the experience forestablishing the FTA;striving for political trust actively, facing reasoninglycurrent political problems. The three countries should build trustable anddependent relationship which can supply reliable political guarantee forestablishing FTA.Generally, closer economical and trade relationship, unparalleledgeography politics and economy and similar historical and culturalbackground supply material elements and conditions for establishing theChina-Japan-Korea FTA. The forming of China-Japan-Korea FTA willoptimize economical and trade structure and bring bigger profits for threecountries. There are still adverse factors to course of economic cooperation inthe three countries. China, Japan and Korea should take reciprocity asprinciple, explore actively the effective cooperation mechanism, advance stepby step, clear up the obstacles, set-up the China-Japan-Korea FTA andaccelerate the prosperity of East Asian economy.