Making East Asian Regionalism Work:Why there is a need for a China-Japan-Korea as well as an ASEAN+3 FTA
Fithra Faisal Hastiadi
PhD StudentWaseda University, Graduate School of Asia-Pacific Studies
fithra@asagi.waseda.jp; fithra_faisal@yahoo.com

In this new millennium, regionalism has begun to emerge in East Asia. East Asian Countries
have been focusing on ways to expand intra regional trade that include: the establishment ofRegional Trade Agreements (RTAs) in the form of Free Trade Agreements (FTAs) andEconomic Partnership Agreements (EPAs). The likes of China, Japan, and Korea (CJK) as theeconomic front runners are regarded to be the key actors in stimulating regional economic
growth through some beneficial trade agreements. In this sense, the triangular trade agreement
between CJK will become a significant ingredient that can cope with the necessary condition thatis to create East Asian welfare. Unfortunately, with the absence of such agreements, the present
intra regional trade scheme in CJK is not sufficient to meet the target. This paper uncovers theinefficiency of the present scheme through Engle-Granger Cointegration and the Error
Correction Mechanism. Moreover, the paper underlines the importance of a triangular trade
agreement for accelerating the phase of growth in the region. This agreement will then provide amajor boost in the form of spillover effects for the ASEAN4 which represent the South EastAsian Region. The paper argues that the spillover effect along with the convergence in terms oftrade and the nexus between Revealed Comparative Advantage (RCA) and Intra Industry Trade(IIT) function as economic modalities for creating region-wide FTA. As for this reason, TwoStage Least Squares (2SLS) and static panel fixed effect models are employed. Furthermore, thepaper also identifies a number of economic and political factors that can support the formation ofEast Asian Regionalism in the long run.

Biographical note: Fithra Faisal Hastiadi obtained his BA in Economics from the University ofIndonesia. During his BA, he worked as a teaching assistant in the University of Indonesia at theDepartment of Economics before he continued his study to Keio University, Japan from where
he got his MA degree. He specializes in development economics, monetary economics, as wellas international trade. Currently, he is doing his PhD in International Economics at the Graduate
School of Asia Pacific Studies (GSAPS) at Waseda University, Japan.

The Integration of East Asian Economies:
towards specialization or diversification?
Farazi Binti Ferdous
PhD Student, GSAPS, Waseda University

The East Asian economic integration has been accelerating during the 1990s along with thedeclining trade barriers, increasing trade intensity and intra-industry trade, and a formation ofproduction network. The classical trade theory suggests that when a country opens itself to tradewith other countries through trade liberalization and integration, it will be compelled to
specialize in products where it has comparative advantages vis-à-vis its trading partners. On theother hand, the Krugman model fundamentally argues that, as countries become economicallymore comparable, trade between them becomes more and more intra industry in nature. Under
these circumstances, the study will examine whether or not the observed increasing tradeintegration in East Asia led the selected countries in the region towards increased or decreased
specialization. Hence the study will use the Herfindahl index to measure the degree of export
specialization, where the higher the index value (close to 1), the more specialized the industrial
structure. For this reason, a fixed effect panel data model is constructed. The panel data is
consists of data from each of the countries under investigation, covering a period between 2000
and 2008. The study will show that, as countries in the East Asian region become increasinglyintegrated, some countries in the region are getting more specialized while others diversified
their production structure as their trade patterns become more diversified. The study, thus, argues
that whether regional integration leads to specialization or diversification of an economy, is yet
to be determined. At the same time the study will investigate what factors are affecting trends todiversification.
Biography: Ferdous Farazi Binti obtained her BSS and MS in Economics from the University ofDhaka, Bangladesh. Later on she achieved an MA in International Relations from Waseda
University, Tokyo, Japan. Her field of interest is development economics and international trade.
Currently, she is doing her PhD in International Economics at the Graduate School of Asia
Pacific Studies (GSAPS) at Waseda University, Japan. She is working as a research assistant at
the Global Institute for Asian Regional Integration, Waseda University.