Northeast Asia: Ripe for Integration?

278 Pages·2009·1.94 MB·English

by  Vinod K. Aggarwal, Min Gyo Koo, Seungjoo Lee, Min Gyo Koo (auth.), Chung-in Moon (eds.)

The Political Economy of the Asia Pacific
Editor
Vinod K. Aggarwa l, University of California, Berkeley, CA, USA
Vinod K. Aggarwal ● Min Gyo Koo
Seungjoo Lee ● Chung-in Moon
Editors
Northeast Asia
Ripe for Integration?
Prof. Vinod K. Aggarwal Prof. Min Gyo Koo
University of California Yonsei University
Berkeley Asia Pacific Economic Dept. of Public Administration
Cooperation Study Center 134 Shinchon-dong, Seodaemun-gu
(BASC) Seoul 120-749
802 Barrows Hall Korea
Berkeley CA 94720-1970
Preface
How will Northeast Asia’s economic and security institutional
architecture evolve? Predicting the future is always hazardous busi-
ness, often left to seers and wizards. Yet at the same time we believe
that by examining the recent history of Northeast Asia from a theoreti-
cally informed perspective, while we may not always correctly forecast
the future, this exercise can still provide useful insights for policy-
makers and academics. To this end, this book examines how critical
changes over the last twenty or so years have transformed the institu-
tional organization of the region. Specifically, we consider the impact
of what we term the “triple shocks”: the Cold War’s end, the Asian
financial crisis, and the terrorist attacks of September 11, 2001. We
examine how the impact of these key changes has played out in the
context of China’s rise, Japan’s economic problems, American neglect
of Asian developments, the fall of the Soviet Union and subsequent
resurgence of Russia, and the changing dynamics of the two Koreas.
Examination of changes in Northeast Asia’s institutional landscape
is not new. Yet we believe that this book breaks fresh ground by
providing a theoretical framework that facilitates the exploration of
key countries’ foreign economic and security policies in a comparable
manner. By examining the significant variables that influence national
responses to these individual shocks, and through consideration of the
impact of cumulative changes in the region in the post-triple shocks
period, we believe that we can better gauge likely future institutional
trends in the region.
The East Asia Foundation (EAF), based in Seoul, Korea, has gen-
erously supported this book. With its financial support, we were able
to hold a conference at the University of California at Berkeley, co-
sponsored by the Berkeley APEC Study Center (BASC), in December
2005. This opportunity to discuss first drafts of our papers, and our sub-
sequent interactions, have greatly benefited from the support of the
EAF. It has proven instrumental in allowing us to clarify our thoughts
v i Prefa ce
and assemble this volume. Aside from the academic exchange sup-
ported by this funding, this meeting also allowed us to create a network
of ties among the scholars who either contributed chapters to this vol-
ume or who commented on this work.
Our meeting in Berkeley was extremely fruitful as a result of the
comments that the book’s contributors received from Crystal Chang,
Myung-koo Kang, Jin-Young Kim, Elaine Kwei, Kenji Kushida, Hong
Yung Lee, and Jehoon Park. Without their incisive criticisms and sug-
gestions for improvement, this book would have been much the poorer.
We would like to particularly single out the help we have received
from Seung-Youn Oh, who not only provided logistical and organi-
zational support for the conference, but also lent her expertise as a
discussant.
The work of the staff at BASC proved crucial. Three former and
current project directors—Jonathan Chow, Edward Fogarty and Kristi
Govella—have shepherded the transformation of rough conference
papers to carefully edited and structured book chapters. They not only
furnished the contributors to this book with the collated comments of
the discussants, but more importantly, with their own set of comments
that pushed all of us to work harder and meet their high standards.
Kristi’s management of the publication process has greatly eased the
editors’ workload. In this task, she has been ably supported by the work
of Robert Chen, Cindy Cheng, Ross Cheriton, Nathan DeRemer,
Michelle Haq, Vaishnavi Jayakumar, Andrew Kim, and Anne Meng,
undergraduates who work at BASC under the auspices of the Berkeley
Undergraduate Research Apprenticeship Program.
We would like to thank Niels Peter Thomas of Springer Verlag
for supporting the publication of this book. We also hope that this
volume will be a valuable edition to the book series entitled The
Political Economy of the Asia Pacific that Vinod K. Aggarwal is
editing for Springer.
We, of course, remain responsible for any errors or omissions.

Vinod K. Aggarwal Berkeley, California
Min Gyo Koo Seoul Korea
Seungjoo Lee Seoul Korea
Chung-in Moon Seoul Korea
Contents
Preface ...............................................................................................v
Contributors.................................................................................... xi
Abbreviations................................................................................ xiii
1 Economic and Security Institution Building in Northeast
Asia: An Analytical Overview ....................................................1
VINOD K. AGGARWAL AND MIN GYO KOO
1.1 Introduction ............................................................................1
1.2 Northeast Asia’s Changing Institutional Map........................3
1.3 An Institutional Bargaining Game Approach
and the Evolution of Northeast Asian Regionalism...............9
1.4 Overview of the Book ..........................................................27
1.5 Conclusion............................................................................30
2 South Korea’s Regional Economic Cooperation
Policy: The Evolution of an Adaptive Strategy.......................37
SEUNGJOO LEE AND CHUNG-IN MOON
2.1 Introduction ..........................................................................37
2.2 Gains from Bilateral Security Alliance and Multilateral
Trade Policy: Re-examining Cold War Legacies.................39
2.3 The Emergence of South Korea’s Regional Policy
in the Early Post-Cold War Period: Achievements
and Limitations.....................................................................40
2.4 The Asian Financial Crisis and Changes in South Korea’s
Regional Policy ....................................................................43
2.5 The Roh Moo-hyun Government’s New Regional Policy...48
2.6 Conclusion............................................................................57
viii Contents
3 Rhetoric or Vision? Chinese Responses
to U.S. Unilateralism................................................................. 63
KUN-CHIN LIN
3.1 Introduction ......................................................................... 63
3.2 The PRC’s Position in the Cold War Institutional
Equilibrium:1978-1989 ....................................................... 68
3.3 Negotiating New Regional Arrangements in the
Post-Cold War Era: Sharpening the Survival Instinct
of the Leninist Party-State................................................... 70
3.4 After the Financial Crisis: First Opportunities for Chinese
Leadership of Asian Regionalism ....................................... 78
3.5 After 9/11: Broadening China’s Strategic Leeway ............. 83
3.6 Winding Roads Ahead: Scenarios for China’s Grand
Strategy ............................................................................... 96
4 Under Pressure: Japan’s Institutional Response
to Regional Uncertainty ......................................................... 109
SAORI N. KATADA AND MIREYA SOLIS
4.1 Introduction ....................................................................... 109
4.2 Economic Shocks and the Persistence of Security
Constraints......................................................................... 110
4.3 Japan and the New Regional Trade Architecture.............. 118
4.4 Japan and the New Regional Financial Architecture ........ 130
4.5 Conclusion......................................................................... 140
5 North Korea’s Strategy for Regime Survival
and East Asian Regionalism .................................................. 149
SANG-YOUNG RHYU
5.1 Introduction ....................................................................... 149
5.2 North Korea’s Development in the Cold War
Equilibrium ....................................................................... 150
5.3 Early Attempts at Integration after the End
of the Cold War................................................................. 151
5.4 Aftermath of the 1997 Asian Financial Crisis................... 155
5.5 Post-9/11 North Korean Regionalism: The Gaesong
Special Economic Zone and the Six-Party Talks .............. 157
Contents ix

5.6 Security and Trade: Reluctant Coexistence Under
a Fragile Equilibrium .........................................................166
5.7 North Korea and East Asian Regionalism .........................174
6 Impassive to Imperial? Russia in Northeast Asia
from Yeltsin to Putin ...............................................................179
TAEHWAN KIM
6.1 Introduction ........................................................................179
6.2 The International Domestic Nexus: An Analytical
Framework .........................................................................180
6.3 Post-Cold War: Neofeudal Governance and External
Drift ....................................................................................183
6.4 Post-Financial Crisis: Breaking Up the Neofeudal
Coalition.............................................................................191
6.5 Post-9/11: The Neoabsolutist Coalition and Russian
Neomercantilism in Northeast Asia ...................................196
6.6 Scenario Analysis...............................................................206
6.7 Conclusion..........................................................................208
7 Security in Northeast Asia: Time for New
Architecture?............................................................................213
ELLEN L. FROST AND DAVID C. KANG
7.1 Introduction ........................................................................213
7.2 Changes in the External Environment................................216
7.3 Other Changes in the Regional Environment.....................221
7.4 The Adequacy of Existing Institutions...............................232
7.5 Institution-Building in Northeast Asia ...............................236
7.6 Conclusion..........................................................................240
8 The Future of Northeast Asia’s Institutional
Architecture..............................................................................245
VINOD K. AGGARWAL, MIN GYO KOO, AND SEUNGJOO LEE
8.1 Introduction ........................................................................245
8.2 An Institutional Bargaining Game Approach: Initial
Shocks, Goods, Individual Bargaining Situations,
and Institutional Fit ............................................................247
x Contents
8.3 Cross-National Developments .......................................... 251
8.4 The Future of Economic and Security Institutional
Building in Northeast Asia................................................ 257
Index ............................................................................................. 263