Korea-Japan free trade pact is key

Human minds tend to remember what was learned first rather than later, and the credibility of information learned later tends to hinge on that learned first.

One tends to discredit later information if it is incongruous with earlier fixations in the mind. In psychology, this is called the “primacy effect,” where items presented first in a series can be better remembered and more influential than those presented later.

I experienced the primacy effect when it came to the free trade agreement (FTA) between South Korea and Japan and former Finance Minister Kang Bong-kyun. In 2003, he wrote an opinion piece contemplating the significance and effect of a three-way free trade pact among South Korea, China and Japan.

In sum, he argued that a free trade pact among the three East Asian neighbors would be a boon for us. Korea can strike free trade agreements separately with Japan and China, but the latter two cannot: The differences and hostilities between them are wider than what Seoul holds against either. If South Korea can act as a bridge, the region can prosper in peace. That is the best not only for the economy, but also for diplomatic and security interests, he said. His words have stuck in my head since.

Kang served as the senior secretary for economic affairs to former President Kim Dae-jung, who floated the idea of a Korea-Japan FTA during his visit to Japan in 1998, when he defined it as a new partnership Seoul and Tokyo in 21st century. Kang must have gone through the prospects of a bilateral FTA with the president and developed the idea into a three-way format for lasting peace and co-prosperity in the region.

Because of the primacy effect, I always check up on the idea with the retired bureaucrat to see if it is still intact. His answer is always the same. More than 10 years have passed since he first made this argument. The political, economic and diplomatic landscape in Korea and Japan have changed greatly over the past decade, and yet he has remained committed to this theory. I called him the next day after South Korea and China reached an agreement on their FTA arrangement.

His voice was feeble because of illness, but his answer was stern “yes” to an FTA. He approved of the outcome, although it was unsatisfactory. If not for the non-tariff conditions, South Korea has earned more in entering the free trade deal with China, he said.

He believed that next on the list would be Japan, which cannot do without the Chinese market and may have felt motivated by the Seoul-Beijing deal.

Kang was also optimistic that a free trade deal could serve as a breakthrough in the icy relationship between Korea and Japan.

“An economic agenda will make it easier for Prime Minister Shinzo Abe and President Park Geun-hye to make overtures,” he said. “We must make the first move. Since we already have an FTA framework with China, we are in an advantageous position. [Japan] inevitably would have to go along with our rules.”

Beijing believes the United States and Japan are trying to segregate China by launching a regional free-trade arrangement, the Trans-Pacific Partnership. And Beijing has been eager to strike a bilateral free trade deal with Seoul partly because it does not want to feel excluded. Washington may feel uncomfortable about Seoul becoming closer with Beijing, but a Korea-China-Japan FTA could solve alleviate those concerns. A three-way FTA could act as leverage to ensure Korea’s sovereignty amid a hegemony contest between the United States and China.

Kang also emphasized that the East Asia FTA is not complete without North Korea. “It won’t be easy to reform North Korea, but it could be easier to open it. Once that starts, reform can follow. North Korea could be moved within the FTA framework. The formalities are right, and it would be easier to change North Korea,” he said.

He cited Myanmar as an example.

Beijing sent special envoy in 2009, offered aid and lifted sanctions. Since then the country has proceeded with reforms, liberalizing its capital market and drawing foreign investment.

“To make North Korea like Myanmar is the key to peace and prosperity in Northeast Asia and the FTA holds the key,” he said.

JoongAng Ilbo, Nov. 13, Page 34

*The author is an editorial writer of the JoongAng Ilbo.

by Yi Jung-jae