The Global Financial Crisis in 2008 and the Economic Integrations in the East Asia

Abstract

Global financial and economic crisis, which was started in USA in September 2008, has had huge negative impacts on the global economy. The East Asian countries have been also hit by the global financial crisis directly or indirectly. As a way to overcome the financial crisis, eventually the East Asian countries have accelerated the pace of the increase of FTAs in the region even though FTAs started to increase rapidly in the region even before the crisis. There are three reasons for the rapid expansion of FTAs in recent years in the East Asian countries. Firstly, the global financial crisis was a good opportunity for the East Asian countries to recognize the needs to diversify their trading relations with more trading partners in the region. Secondly, the countries have become unsatisfied with the WTO mainly because of slow progress in multilateral trade liberalization and of the limited coverage of WTO rules. Thirdly, the East Asian countries have regarded FTAs as an important regional policy instrument. As a way to the economic integration among the East Asian countries, many possible ideas have been introduced. Among these the most possible one is this: firstly FTAs among Korea, China and Japan should be established and EAFTA including 10 ASEAN member countries and Korea, China and Japan should be formed. And the three countries should form a FTA with high level of trade liberalization. In terms of the way how to build FTAs among the three countries, Korea should play the mediating role very aggressively in order to form a FTA among the three countries.