Analysis Of The Prospect Of Realization Of China-Japan-Korea FTA

Economic globalization and regional integration are the two hot topics for the current world economy.Europe,North America and Asia have basically formed the three major economic plates in the world.The successful example of the European Union and the North American Free Trade Area has made the world recognize the importance of international cooperation,in which the participating countries have really enjoyed a variety of economic benefits and political interests.Therefore,as one of the three major economic plates,East Asia will decrease the development speed of its regional economy and weaken its impact in the global economy,if it fails to strengthen its regional economic cooperation.Specifically speaking,China,Japan and South Korea are the three most powerful economic countries in East Asia Region.If a China-Japan-South Korea Free trade Area is established,on one hand,the process of the regional integra.tion of East Asia Region will be driven and accelerated;on the other hand,the economic development in the three countries will be also increased,which actually has a heavy impact on the economic role that East Asia plays in the global economy.In addition,due to the frequent occurrence of global financial and economic crisis,it is not easy for one country to resist the financial turmoil alone.Therefore,the loss caused by such a crisis could be reduced when several countries work together against the risk.The two regional integration organizations by the EU and North American Free Trade Zone have provided a textbook of great reference value for the countries that are performing a regional cooperation in the world.However,compared to the two plates constructed by the EU and North American Free Trade Zone,East Asian has actually developed slowly in terms of the construction of free trade zone,though it has enjoyed a high speed of economic development in the world,especially China,Japan and South Korea haven't shown any optimistic evidence for the construction of CJK FTA.Therefore,it is held to be necessary,feasible and urgent to establish CJK FTA in the context of the world economic globalization and regional integration.There are seven parts in this paper.The first part is the introduction part.It mainly introduces the research background,the research significance,study methodology and structure of the thesis.The idea of the CJK FTA was presented at the summit of the three leaders of China,Japan and South Korea in 2002.It is envisaged that the CJK FTA is a three-country free trade area consisting of more than 1.5 billion people.In 2003,CJK FTA folk feasibility study group basing on the general equilibrium model conducted the conclusion that establishing the FTA can promote economic growth,expand foreign trade and improve the level of national welfare.China's GDP will grow by 1.1 to2.9 percent,Japan's GDP will be boosted by 0.1 to 0.5 percent;South Korea's GDP will increase by 2.5 to 3.1 percent.China was able to get $4.6 to $6.4 billion in total benefits,with Japan receiving $67 to$7.4 billion and South Korea's welfare was the most obvious,with a total of $114 to$26.3 billion.The second part is the literature review part.This section mainly expounds the research result of domestic and foreign scholars on CJK FTA including the realistic basis of realization of FTA,the expected economic utility and the obstacles encountered in the negotiation process.In addition,it also introduces two important theories:Customs Union Theory and Free Trade Area Theory.The third part is the realistic foundation of constructing CJK FTA.It respectively analyzes the realistic basis in terms of the present trade development situation of China Japan and South Korea.The fourth part is the analysis of the trade effect of CJK FTA.It introduces the static and dynamic effects of the construction of CJK FTA.Among them,the static effect includes the trade creation effect and the trade transfer effect;the dynamic effect includes the investment effect,the competitive effect and scale economies effect.The fifth part analyzes the restrictive factors in the process of establishing CJK FTA.It includes that differences in economic development stages,frequent trade friction,excessive protection for sensitive industries,low political mutual trust and the restrictions from The United States and ASEAN.The sixth part is about the prospect study on CJK FTA and relevant policy recommendations for promoting the negotiation process.This part first introduces the implementation principle of CJK FTA then analyzes the development path,finally it gives some policy suggestions on accelerating the construction process of CJK FTA.First,Strengthen economic cooperation and balance economic development;Second,Establish trade coordination mechanism and properly solve trade friction;Third,Flexi'bly handle of vulnerable and sensitive industries,and properly handle differences between the three countries;Fourth,Enhance political trust through strengthening intergovernmental political cooperation and handling disputes properly.Fifth,Strengthen cooperation with the United States and ASEAN.The seventh part is the summary part and it points out the research findings and limitations of this paper.The establishment of CJK FTA will have a significant impact on the process of regional economic cooperation in East Asia even in the Asia-Pacific region.Therefore,China,Japan and South Korea should strengthen their political will,eliminate external interference,hold the attitude of sincere cooperation with the principle of "step by step"and steadily and solidly promote the CJK FTA negotiations process striving for realizing the CJK FTA earlier,which is the most sensible strategy choice at present.The innovative point of this paper is conducting a detailed study on the prospect of the realization of CJK FTA,It analyzes those benefits for the three countries after the completion of FTA and especially it points out the respective industries of the three countries which will gain the biggest revenue from the FTA;it also points out those problems appeared in the negotiation processing.Finally,this paper gives comprehensive policy suggestions for promoting the negotiation process of CJK FTA,especially some practical suggestions on how to solve those political,historical problems and territorial disputes three countries are facing.