earticle

영어

Discussions on economic integration including FTA in East Asia have been underway for many years and FTA of KJ (Korea‐Japan) centers in the talks. In the past, multilateralism and regionalism are viewed as reciprocal‐exclusive relationship to disturb the free trade but recently it is viewed as one of complementary cooperation. According to this change, many countries have tried to join the regional trade agreements including FTA so that around 250 agreements are reported to WTO until recently. On the other hand, Korea and Japan have its own economic reasons to take part in the agreement such as obtaining the broad and stable export market, achieving the industry restructure by acquiring the advanced technology and system, attracting the foreign direct investment, and so on. By the CGE simulation analysis, when Korea and Japan enter into the FTA, it is expect that the trade effect of inter‐member countries will be eventually better off for both countries while each country may have a negative effect in trade balance in particular industries respectively. Despite an expected long‐term positive economic effect including macroeconomic factors such a GDP rate, non‐economic factors like a historical relationship between the countries work as an obstacle in making FTA. The pre‐requisite problems in making FTA are able to classify two areas: economic and political. In economic areas, great deficit in trade balance of Korea against Japan, recession of welfare level, and problem of fundamental dependence of Korea on the imports from Japan are expected to be barrier in making FTA. In political area, discord between Korea and Japan due to the historical emotional hatred, and absence of leadership of respective country’s political leaders, FTA between the two countries would be through a very tough procedure to be completed. To solve these problems, gradual progress should be considered in some industries which are expected great trade deficit and technology transfer of Japanese firms and remove of non‐tariff barrier are essential to solve this problem. Furthermore, political cooperation should be accomplished in the area of deregulation, investment cooperation, and so on. In addition to this, Japan should open her market extensively and offer funds for Asian countries development and Korea and Japan show their strong leaderships for peace of the region. Also active culture exchange such as academic exchange, language exchange program, sports, etc should be helpful to make understand each other.