Developing a strong regional axis

Experts from Korea, China and Japan agreed that the three Northeast Asian nations should join forces to drive the global economy and fight global economic changes. The Northeast Asia Trilateral Forum of 30 experts from political, business and academic sectors met in Seoul earlier this week and discussed the theme of uncertainties in the global economy and cooperation among the three countries. As three economies have more growth potential than either the U.S. or European countries, which are struggling with fiscal and financial problems, the experts agreed they should take more of an initiative to help revive the flagging global economy. Plans included developing regional monetary and financial instruments.

Former Finance Minister Sakong Il proposed that the Chiang Mai Initiative - the multilateral currency swap arrangement among members of the Association of Southeast Asian Nations (Asean) and the three Northeast Asian countries - should be enhanced to include a Northeast Asian development bank. Toshiro Muto, chairman of Daiwa Institute of Research and a former deputy governor of the Bank of Japan, agreed that regional currencies should be employed more actively in trade and investment. Li Xiangyang, director of the Institute of Asia-Pacific Studies at the Chinese Academy of Social Sciences, suggested reducing U.S. dollar holdings in their foreign exchange reserves and replacing dollars with the three currencies in regional trade. Euh Yoon-dae, chairman of KB Financial Group, proposed that the three countries establish an investment fund and strengthen cooperation among their financial institutions. They all agreed on the need for closer monetary and financial cooperation. The proposals will be submitted to the governments of the three countries through respective secretariat offices and hopefully acted on.

Zeng Peiyan, China’s former vice premier, also pointed out that negotiations for a trilateral free trade framework have been stalled for a decade. Political leaders of the three countries should exercise more leadership in providing a breakthrough in the talks. The forum, co-sponsored by the JoongAng Ilbo, China’s Xinhua News Agency and Nikkei News Group of Japan, has been alternately held in the three countries since 2006. The group of experts demanded stronger leadership from the three countries to take a more prominent role in guiding the global economy by means of a regional alliance, which could reap rewards in terms of the economy and defense as well as environmental issues.