For smaller East Asian economies, a regional arrangement with Japan can guarantee future access to a large, industrial country market. Even when the rest of the world is open, there may be goods that are tradable only regionally, such as electricity between neighboring countries. Unilateral liberalization's infeasibility. Unilateral liberalization, even if superior to the regional route in principle, may be politically impossible. More than trade.
Regional integration can go far beyond trade liberalization.
In East Asia, intraregional labor mobility, foreign direct investment, and financial-capital flows will play an increasingly important role in the coming years. To the extent that harmonization of policies across countries can help facilitate such movements, regional integration can offer unique gains. Regional integration can help reduce political tensions and promote political harmony among former enemies. It is uncertain whether an East Asian trade bloc is economically desirable. And such a grouping does not appear feasible in the present trade climate.