[VIEWPOINT]Time to Wake Up to Economic Realities

While the map of international politics is changing after the terrorist attacks in New York and Washington on September 11, the world map of economics is also changing with the WTO negotiation in Doha, Qatar. Especially with the WTO accession of China and its 1.3 billion people, the search for cooperation and alliances among East Asian countries is intensifying.

At the ASEAN+3 summit, President Kim Dae-jung presented research findings of the East Asia Vision Group which was organized at his suggestion. One of the findings is the idea of an East Asia Free Trade Area, an ambitious plan for a regional economic cooperation body that could compete with the North American Free Trade Agreement and the European Union.

China also announced that it had reached agreement with ASEAN on a free trade area suggested at the ASEAN+3 summit last year. Beijing said that Korea and Japan would be invited to join the trade bloc next year. ASEAN countries, targeting the huge China market, are preparing for more competition that will result from China's WTO accession. China can draw ASEAN economies under its influence, and can also reduce its dependence on the declining U.S. economy. By reinforcing its leadership among East Asian economies, China will be able to wrest away the economic dominance Japan has enjoyed in the past. If an China-ASEAN free trade zone is established, we may see transcontinental railroads from Singapore, Malaysia, Thailand and China to Europe. That rail link would compete with plans for a trans-Korean Peninsula and trans-Siberia railroad, which the two Koreas and Russia have been discussing.

What is the Japanese reaction? A few days ago, the Asahi Shinbum, a leading Japanese daily, harshly criticized Japanese political leaders, questioning what they have been doing to counter or accommodate Japan to the prospect of a 1.7-billion-person China-ASEAN market. The paper complained that Japanese politicians have squandered their chance for influence with ASEAN countries because of market-opening opposition from Japanese farmers. But Japan is not sitting idle. It is active in multilateral arenas and now feels a sense of impending crisis as its economy continues to decline and trade surpluses decrease. It feels economically isolated by NAFTA, the EU and ASEAN, and so is trying to establish bilateral free trade areas with agreeable countries. It concluded a free trade agreement with Singapore last October and is now seeking similar pacts with Mexico, Australia, Canada, Chile and Taiwan. It is now trying to form a Japan-centered economic area to compete against other emerging trade blocs.

While the two big economic powers from east and west are pressing Korea, what is Korea's best course of action? First, the North and South must reconcile and then seek an accommodation with the two emerging trade blocs on either side. With the peninsula as an axis, it may be possible to unify the southern maritime economies of the United States, Japan and ASEAN with the northern continental economies of northern China and Siberia.

It is difficult for a separated Korea to cope with the rapidly changing economic situation and plot economic strategies. North-South economic cooperation must come first. These days, the feeling of the general public about the North is, as I see it, very negative. People turn their heads away when they hear the words "North Korea." I wonder whether we have any plan for our future in this era of economic war. Are we in the same situation as our ancestors, who fell into political disputes 100 years ago and allowed themselves to be colonized by the Japanese?

Especially now that President Kim has resigned from the presidency of his political party, cooperation among political parties on North Korean issues is crucial. Opposition parties reportedly agreed to revise the law on North-South cooperation. The North-South Cooperation Fund should be used in a principled way, but flexible funds management is also important to revive North-South exchanges and cooperation. People want to see real courage and cooperation among politicians to make long-term national plans.

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The writer is a professor of political science at Seoul National University.

by Yoon Young-kwan