Prepared for 10th Anniversary of the CJK
Dialogue
October 12, 2023

Ahn, Choong Yong 安忠 榮Distinguished Professor , Chung-Ang University/
former President , Korea Institute forInternational Economic Policy/former Chair,
APEC Economic Committee/former Foreign
Investment Ombudsman/ former Chair, Korea
Commission for Corporate Partnership
cyahn@cau.ac.kr
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10 years can move mountains and rivers
10年江山都會變1.

Despite occasional uneasiness each other, CJK in the past 10 years have madesignificant progress for prosperous “Northeast Asian community” movement.

2.

Despite lingering “love and hate” feelings each other, the CJK dialogue havecontributed to mutual understanding and practical solutions for common economic
problems, ranging from trade conflicts, Corona Pandemic, aging population, andcritical energy issues and green growth agenda.

3.

Challenges in another 10 years▶ How can CJK minimize risks and pitfalls from on-going geo-politicalfragmentation and super-uncertainties especially due to big power competitions.
▶How CJK can maximize mutual growth opportunities as immediate neighbors
through bottom-up approaches.
▶ How can CJK work together leaving historical legacies behind and look forward
to enhancing inevitable mutual dependences in supply chain on the basis of levelplaying field and mutual trust.
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East
ConfucianVirtures
VirtureCJKAsianConfucian▶
▶論語
論語學而編
學而編
學而時習之 不亦悅乎學而時習之不亦悅乎
有朋自遠方來
不亦樂乎▶ Inseparable Environmental Community

有朋自遠方來
不亦樂乎
☞ 一衣帶水 : One belt
ecological economy☞ Interlocked each other to feel cross-border flows of dust and pollu
ocean water▶求同存異:☞ Pursuing the commonality yet acknowledging thedifference▶相互學習☞ Mutual learning is crucial for joint development andharmonious co-existence (安忠榮 2001a, Ahn 2001b)4

Asian Century unfolding triggered by East Asia
☞ Asian financial crisis (1997/1998) has brought in the concept of“East Asian Identity”, a self-help cooperation among East Asianeconomies eg. Chiangmai Initiative (Ahn 2001b) to avoid arecurrence of external financial shocks (Ahn 2001)☞ Rising China, East Asian tiger economies, ASEAN and India haveushered in Asian Century by shifting the center of world economic
gravity to Asia from the US and EU. (ADB 2011, 2013)☞After seeing the WTO system stalled, East Asian economies
have reached a variety of preferential intra and extra regional
trade agreements (minilateralism and regionalism) toward an“East Asian Economic Community movement,” adapting toglobalization trend and learning from the EU process. ( Ahn2018)

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CJK in broader East Asian Economic Community
I. Is “East Asian Economic Community” a feasible concept?
-Economic Integration, GATT/WTO Principles => Multilateralism declining-Minilateralism, Sub-Regionalism (Gravity Model) Rising-The Endangered Asian Century by the US and China rivalry(Lee Hsien Loong 2020)

II. Formal and Functional Integrations under way towards “East Asian
Economic community.” But which scenario are we taking?
(Ahn 2018)-The US-China unabated confrontation scenario for global hegemon ?
-Big 2 compromised East Asian Regionalism?
-Big 2 muddle through East Asian Regionalism?

III. How can “constructive powers” navigate the big power competition
toward an “open rule-based liberal regional system”?

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••
•

•

Ahn Choong Yong (2022), “Yoon vows to build a value –based alliance withWashington” East Asia Forum, July 5, 2022~~~anation that esposes libera;l democracy and endures a thriving market
economy~~~ ,Panda, Jagannath and Choong Yong Ahn, (2023), “South Korea’s IndoPacific Strategy: Quest for Clarity and Global Leadership,” The Diplomat,January 16, 2023~~~ “President Yoon Suk-yeol has consolidated his global vision for South

Korea by embracing ”Strategic Clarity in China-US Competition”~~~•

Panda, Jagannath and Choong Yong Ahn, (2023),The Diplomat, January 27,,
2023•~~~“Seoul’s Indo-Pacific strategy converges with India’s outlook of theregion, while sharing a common vision that goes beyond great powerpolitics.”~~~••
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Conflicting Mini-lateralism and Regionalism in Indo-PacificFree TradeConsultations

Security

CPTPP
RCEP
AEC
ASEAN+S

IPEF
CHIP4DEPA
APEC
ARF

QUAD
QUAD+
AUKUS
SCO (8+4+3)
FVEY☞ Intensifying Security–Trade Nexus and danger of confrontation.
☞ Occasionally, motivated by self-interest protectionism at the expenseof smaller and less powerful economies.

☞ How can we make them regional public goods? Kindleberger trap?

9Good News : RCEP Effectuation (2022.1.1)
1. C, J, K are formally linked under the same institution.

2. Very low level of liberalization compared to CPTPP.
3. But adopts the cumulative Unified Rules of Origin.
-Self-certification and cumulative rules of origin are great
schemes for SMEs
4. The RCEP permanent secretariat office needs to be establishedrather quickly to monitor implementation of RCEP
clauses and commitments by each member state.
5. The RCEP member states should evaluate the RCEP
effectiveness and should be determined to upgrade it. In
particlular digital trade rules needs to be upgraded for SMEs.
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Indo-Pacific Economic Framework
1. The US President Biden’s Initiative-Does not deal with the market access to the US-After the withdrawal from TPP, the US focus rules for crossborder trade and investment

2. Four Pillars :Resilient supply chains, Digital trade rules, Decarbonization, anticorruption

3. Members confirmed at the Tokyo QUAD summit,

May 2022-The US, Japan, Australia, India, S. Korea, NZ, Singapore, Thailand,Indonesia, Vietnam, Brunei, Malaysia, Philippines-Deals with trade rules

12South Korea’s Indo-Pacific Frame▶Three core values
Freedom

PeaceProsperity▶ S. Korea’s Indo-Pacific frame-Freedom : rule of law, rules-based trade order, human rights-Peace : preemptive prevention of military confrontation andresolution of conflict through dialogue-Prosperity: Open and free Indo-Pacific▶Resilient supply chain▶Extended economic security▶ Inclusive regional economic and technology ecosystem☞ S. Korea added “inclusivity and prosperity” to the US-led Free, Open

Strategic Convergence by China and the US
China-ASEAN led RCEP

Cambodia
China
Indonesia
Laos
MyanmarPhilippines
South Korea
ThailandUS-Japan initiated CPTPP

Australia
BruneiJapanMalaysia
NewZealandSingapore
VietnamCanadaChile
MexicoPeru
UK

US initiated

IPEF

Key ! China’s Entry to
CPTPP require for
China to carry on highlevel opening-up to
meet high standards ofthe liberal trade andinvestment.

U.S., Japan
Australia, India
South Korea, New
ZealandSingapore,
ThailandIndonesia, Vietnam
Brunei, Malaysia
Philippines

Four pillars• Resilient supplychains• Digital trade• Decarbonization• Anti-corruption13

▶21 members including the US and China had committed to FTAAP2006.
▶
▶
▶
▶ Minimize the risk involved in the intensifying security-trade nexus.
▶ Avoid thy neighbor beggar policy.
▶ Avoid “weaponization of strategic materials.”▶ If China joins the CPTPP after meeting all the entry requirements=> effective way to combine the RCEP and CPTPP leading to FTAAPand revival of multilateralism (安忠榮 2021).
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Future Path to be recommended fromCJK Dialogue (I)▶ Pursue separation of politics from normal economic

exchanges (政經分離) to realize bottom-up integration
leading to open rule based system.

▶ From the RCEP effectuation, stalled CJK FTA
negotiation must be resumed.
▶ Increase student exchange is critical : to ensure apeaceful coexistence with enhanced mutual trust andto produce regional public goods.
▶ Promotion of intra-CJK tourism: Aging populationprefer to travel in neighboring countries to trigger
most effective way of increasing domestic demand
and mutual understanding.
▶ Resilient supply chain network by avoiding“weaponization” of strategic materials

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Future Path from CJK Dialogue (II)▶ Increase CJK trilateral digital trade connectivity. Eg. DEPA▶ Develop energy “security” with a focus on nuclear energy
safety and prevention of natural disasters due toclimate change.
▶ Aftercare services for foreign direct investors need to beprovided.

South Korea’s Aftercare
Function forForeign Invested Companies =>16

References

安忠榮, “<區域全面經濟同伴關係協定> 與 <全面與進步踏太平洋同伴關係協定> 的 戰略融合: 現實還不是幻影” 東亞
評論 第35輯 山東大學 2021 pp 20-39
Ahn, Choong Yong (2020) “Chengdu Trilateral Summit still to deliver,” East Asia Forum,11TH Feb 2020_________(2018), “Toward an East Asian Economic Community: Opportunities and Prospects, “ in edited byPeter Hayes and Moon Chung-in, The Future of East Asia, Palgrave, Macmillan pp 131-164‘_________(2011a) “Trans-border regional development and community building,” Won Bae Kim, Yue-man
Yeung, and Sang Cheul Choe eds. Collaborating Regional Development in North East Asia, pp 23-49, The
Chinese University, Hong Kong Press_________ (2011b), “Can Asia save the Sinking world Economy?” Global Asia, vol. 52, No. 4, Winter pp 34-45__________(2001a), “Financial and Corporate Restructuring in South Korea: Accomplishments and UnfinishedAgenda,” The Japanese Economic Review, Vol. 52 No. 4 December 2001 pp 452-470__________ (2001b) “ A search for robust East Asian development models after the financial crisis: mutuallearning from East Asian experiences,“ Journal of Asian Economics 12 (2001) pp. 419-443
Ahn, Choong Yong & Inkyo Chung (2007), “A Search for Closer Economic Relations in East Asia,” Japanese
Economic Review, vol. 58, No.2, pp 173-190
Asia Development Bank (2011), Asia 2050: Realizing Asian Century
Asia Development Bank (2013), Asia Regional Integration Center, ADB Integration Indicator
Axelrod, Robert(2006), The Evolution of Cooperation, Basic Books

17Bergsten, C. Fred, Charles Freeman, Nicholas R. Lardy, and Derek J. Mitchell (2008), China’s Rise:
Challenges and Opportunities, Peterson Institute for International Economic Policy and center for
Strategic and International Studies, pp 1-269
Balassa, B.(1967), “Trade creation and Trade diversion in the European Common Market,”Economic Journal Vol. 77
Graham T. Allison (2017), Destined for War: Can America and China escape from Thucydides Trap,
Houghton Mifflin Harcourt, Boston
Kissinger, H. (2020), “ The Coronanvirus Pandemic will forever alter the World order,” Wall Street Journal,op-ed, April 3
Lee Hsien Loong (2020),”The Endangered Asian Century: America, China, and the Perils of Confrontation”

Foreign Affairs, 2020 July/August☞World Bank (1993), The East Asian Miracle: Economic Growth and Public Policy, Oxford University Press
World Bank (2020), World Development Report: Trading for Development in the Age of Global value Chains

overview

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Thank You
Q&A19