For years, regionalism has become a new trend in East Asia. East Asian Countries have been focusing on ways to expand intra regional trade that include: the establishment of Regional Trade Agreements (RTAs) in the form of Free Trade Agreements (FTAs) and Economic Partnership Agreements (EPAs). The study of regionalism is very vital since the trend has indeed created a profound regional and indeed global significance. Japan, Korea and China are regarded as the key actors for such action in East Asia.
Being acknowledged as the economic front runners, Japan, China and Korea are assumed to have heavy responsibility for the economic welfare in the East Asian region. It is very obvious that East Asian regionalism (EAR) cannot be put into practice without these countries’ strong support, CJK will have the key since the three countries occupy about 17 per cent of both world GDP and trade. Unfortunately, the lack of institutional arrangements among these giant countries has stalled the overall welfare effect for the East Asian communities.
Tracing back the relations since the post war era, economic ties between Japan, Korea and China has evolved in somewhat gradual ways. The evolution of trade activities emerged from the likes of China, which has a substantial transformation of trade structures. In the early 90’s, primary commodities accounted for more than one third of China’s total export to Japan and Korea.
In this new millennium, it is still top Chinese export to Japan and Korea, but it is persistently followed by the fast growth of machinery and transport. From this point of view, trade within the north East Asian region is deemed to have substantial movement as a result from the shift of trade towards a more industrialized structure. The present driving force of the China-Japan-Korea (CJK) relationship is the market by which in some sense is not enough; it should be matched by regionalism. The main focus of the regionalism is to make these countries grow together so that it can spread positive externalities throughout the East Asian region. In the long run it is expected that CJK will lead regionalism in East Asia.
In this paper, EAR is defined by the join Region of CJK and ASEAN (ASEAN plus three). Due to data limitation, ASEAN4 (Malaysia, Thailand, Indonesia, Philippines) will serve as a proxy for ASEAN countries. In the last decade, the share of intraregional trade of ASEAN plus 3 is almost 60% and is still increasing. The coalition of ASEAN and CJK is becoming more strategic in recent years. Figure 1 shows the increasing trend of trade in ASEAN plus three countries. The remainder of the paper is organized as follows. The second section studies the materials and methods. The third section examines the result of the regressions with some discussions. The last section presents conclusion and some concluding remarks.
Figure 1. ASEAN Trade with its main Asian Partners All products, 2002 and 2007, Billion us$