From: Edward Lincoln, Senior Fellow, The Council on Foreign Relations
The article in Sentaku about the rapid rise of free trade areas (FTAs) written by Toshiya Tsugami and posted for us by Eric Dinmore is interesting, but in my mind represents a typical Japanese analysis of the situation. As such it:
1) exaggerates the role of Japan in motivating what has happened in East Asia. It's not even clear that Japan proposed the FTA to Singapore; it appears that Singapore approached Japan and that caused the government to rethink its previous opposition to FTAs. This was part of an existing strategy of Singapore to help extricate itself from dependence on its ASEAN neighbors, especially in the wake of the '97 financial crisis. The idea that China approached ASEAN because Japan had begun negotiations with Singapore I find implausible.
2) It is also an exaggeration to say that there is a lot of activity in East Asia concerning FTAs. ASEAN agreed to an FTA among its members over a decade ago and has been slowly and unevenly implementing it ever since. Singapore has been quite active. Japan has signed one (Singapore) and is negotiating one (Mexio). Korea has signed one (Chile). ASEAN is negotiating with China. But all this is happening in a world where other players have been quite active--the U.S. has several (Canada, Mexico---i.e. NAFTA, Jordan, Singapore) and is negotiating a bunch (FTAA, Central America, Morocco, Australia). World wide, about 100 of these things have been created in the past decade. In that context what is happening in East Asia is not so exciting.
3) This is especially true of Japan, which is having considerable difficulty in moving forward. It has been unable to start negotiations with either Korea or ASEAN despite several years of official study groups. It might eventually do so, but the delay is noticeable.
4) The article by Tsugami extols the virtues of a Japan-China FTA, but this is one that is absolutely not on the Japanese government's radar screen, probably for good reason. China has a long way to go with implementing its obligations under the terms of its accession to the WTO before it will really be ready to participate in such arrangements with advanced nations.
Finally, I may be the only one saying this besides Jagdish Bhagwati, but I think FTAs are a bad idea and deeply regret the enthusiasm that the U.S. government has shown for them.
If anyone is interested, I have a book on these developments coming out later this year, a joint publication of the Council on Foreign Relations and the Brookings Institution
