An Inquiry into the Approach to Asian Regional Trade Integration Under the Belt and Road Initiative— The Case of the Alignment of a China-Japan-South Korea Free Trade Area

Bi Ying＊

Abstract: It has been five years since the Belt and Road Initiative (BRI) was first introduced. Though there has been a growing body of literature on regional cooperation between covered countries, Japan and South Korea have been barely discussed. This paper starts with the consensus-based mechanism of a China-Japan-South Korea Free Trade Area (FTA) to probe the approach of its alignment with the BRI in terms of the sequence of “master plans,” “viability of cooperation,” and “embedding of rules.” This inquiry found that the three countries have a shared interest in cooperation in Central Asia to which China prefers a pragmatic approach, while Japan and South Korea an approach combining idealism with pragmatism. Given the huge potential of cooperation between the trio, it is suggested that a “Central Asia chapter” be incorporated in the negotiation framework of this trilateral FTA, and that the design feature three aspects; fundamental principles, specific rules, and an executive body with a view to functionally contributing to regional trade integration in Asia. This approach may also be applied to the alignment of other Asian areas with the BRI.

Keywords: Belt and Road Initiative (BRI); China-Japan-South Korea Free Trade Area (CJK FTA); Arc of Freedom and Prosperity (AFP); Eurasia Initiative; Central Asia

S ince President Xi Jinping took office at the end of 2012, China has been committed to driving an economically stronger Asian community, drawing closer the historical and cultural ties between countries covered under the ancient “silk roads,” and investing in major infrastructure projects across Asia. This is known as the Belt and Road Initiative (BRI). Five years on, the BRI has been implemented and is in full swing, along with an increasing body of literature on the BRI and the cooperation between interested countries in Central, East and West Asia. However, little has been discussed regarding Japan and South Korea,two important countries in Northeast Asia. Although the two nations are not core countries covered under the BRI, both are located at the most active eastern end of the “road.” The two countries' being part of the initiative,particularly Japan, will contribute greatly to Asia's regional integration under the BRI. So, the question is, how can they join this cause? This paper discusses the consensus-based mechanism of a CJK FTA as a possible starting point to investigate the approach to and suggestions on achieving its alignment with the BRI in an effort to functionally facilitate regional trade integration in Asia and give Asia a voice in reshaping international rules going forward.

1. The CJK FTA's alignment with the BRI: FTA mechanism, strategic significance and general approach

1.1 The FTA mechanism, a booster to Asian regional trade integration under the BRI

It has been five years since the inception of the BRI. Despite many details yet to be determined, this initiative represents the rise of a new type of regionalism. Under its grand vision, Asia's several existing bilateral, regional and multilateral mechanisms will be integrated and reshuffled to accelerate macroeconomic activities within the region, and going forward, reshape global governance.①Bi, 2015.The Vision and Actions on Jointly Building a Silk Road Economic Belt and 21st-Century Maritime Silk Road (“Vision and Actions”), issued by the Chinese government in March 2015, as the action plan of the BRI, notes that, “China will take full advantage of the existing bilateral and multilateral cooperation mechanisms to push forward the building of the Belt and Road and to promote the development of regional cooperation.”②Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, https：//www.yidaiyilu.gov.cn/wcm.files/up-load/CMSydyl gw/201702/201702070519013.pdf (last accessed Nov. 25, 2017).Particularly, free trade areas(FTAs) are arguably a core vehicle for pursuing lasting regional cooperation under the BRI. An FTA aims at realizing “market penetration” or “market liberalization” within the area, while the BRI is designed to facilitate the “connectivity” between these markets.③Lee, The South Korea-China FTA. A Common Springboard for South Korea's “Eurasian Initiative” and China's “One Belt One Road” Policy, citing Guiguo Wang (ed.), International Law Perspective of the Belt and Road Initiative: Proceedings of the 2015 “One Belt One Road” International Forum in Hong Kong, Zhejiang University Press, 2016, pp.243-244.The Several Opinions of the State Council on Accelerating the Implementation of the Free Trade Zone Strategy issued in December 2015 stresses that, accelerating the implementation of the FTZ strategy is an important part of China's new round of opening-up. FTZ negotiations in progress should be stepped up and, where circumstances allow, make existing FTZs more liberal to shape a global FTZ network that covers neighboring countries and jurisdictions, extends to countries covered under the BRI and reaches out to important countries across five continents.④Several Opinions of the State Council on Accelerating the Implementation of the Free Trade Zone Strategy (State Council [2015] No.69).

More importantly, free trade agreements (FTAs), pursuant to which FTZs are set up, may translate the results of regional trade integration under the BRI into binding rules. The BRI can hardly accomplish its goals without a legal framework with a global perspective.⑤See https：//www.yidaiyilu.gov.cn/xwzx/roll/29303.htm.Building the Belt and Road would be impossible without safeguards provided by the rule of law. A rules-based approach is required for long-term, stable and healthy development.①Liu, 2017.FTAs, preferential trade arrangements created and allowed under the GATT/WTO system,are enforceable international legal treaties with open topics.②Han, 2015.Either seen from the coordination with existing multilateral trade systems or future rule innovations under the BRI, a wide range of bilateral and regional FTAs definitely represent the best option for greater rule integrations. So far, China has concluded 16 FTAs with 24 countries and jurisdictions. In 2018, there will be negotiations on another 10 FTAs, along with feasibility studies for 10 proposed FTAs.③See http：//news.sina.com.cn/c/2017-12-27/doc-ifypxm-sr1091041.shtml, n.d.Thus, an “open plurilateral model” is followed to explore bilateral and regional FTZ prosperity at different levels and in different fields, promote the integration of investment and trade rules by connecting the dots to shape a high-standard FTA network that reaches the Belt and Road facilitating wider and deeper economic integration in Asia and Europe and driving global economic integration.④See https：//www.yidaiyilu.gov.cn/ghsl/gnzjgd/20481.htm.

1.2 Strategic significance of the alignment

The CJK FTA now under negotiation is located at the easternmost end of the grand BRI blueprint, at the heart of the vibrant East Asia Economic Group (EAEG). To date, the 12th round of the negotiation is underway,⑤Japan-China-Republic of South Korea Free Trade Agreement, Ministry of Foreign Affairs of Japan, 2017.with consensus already reached on a range of regional trade and investment arrangements.⑥Bi, 2016.

The political tensions between the three parties have impeded negotiations of the FTA from time to time.Nevertheless, this is unable to sway the determination of the trio to shelve their political differences and share economic benefits.⑦Bi, 2015.Once an FTA is concluded between these three East Asian powers, effective, substantive regional economic and trade cooperation may be extended to Central, Western and other parts of Asia, which will have farreaching impacts on regional and global governance going forward and give Asia a voice in reshaping international rules.⑧Bi, 2015.Some scholars even tout this FTA as the best prospect for the regional trade arrangements that Asia has been pursuing for over a decade.⑨Madhur, 2013.For this reason, the CJK FTA mechanism may be tapped into in line with the BRI to promote the integration of rules by connecting the dots to accelerate achieving the goal of Asian integration. At the 11th Japan-China-ROK Economic and Trade Ministers' Meeting in 2016, China proposed to conduct third-party market cooperation and other suggestions under the BRI and Eurasia Initiative for the benefit of long-term economic and trade development of the three countries, which received positive responses from Japan and the ROK.⑩See http：//fta.mofcom.gov.cn/article/chinarihan/chinarhnews/201610/33507_1.html.

Most importantly, in a strategic sense, the alignment of the trilateral FTA with the BRI will help substantively draw closer economic cooperation between China and Japan, effectively countering the U.S.ability to contain Asia. The Obama administration worked on the Trans-Pacific Partnership (TPP) and sought a “Pivot to Asia.” The two moves were intended to curb China's influence on the global economy and divert its allies Japan and South Korea away from trilateral cooperation, adding complexities to East Asian economic integration.(11)Japan, in particular, following the U.S. lead, has tended to “contain and curb” China.(12)However,

11 Wei Min, 2013.

12 See http：//www.ftchinese.com/story/001076200?full=y#ccode=iosaction.the U.S. administration, after Donald Trump took office in 2017, immediately withdrew from the TPP as the first move under his “America First” strategy, which significantly eroded the Abe administration's trust in the U.S. Accordingly, Japan gradually turned to a “cooperation with checks-and-balances” approach towards China by focusing on economic and trade cooperation, reducing its confrontations with China and downplaying bilateral historical and territorial issues.①See http：//www.ftchinese.com/story/001076200?full=y#ccode=iosaction.As a result, there has been growing interests in the BRI across Japanese society, with the Belt and Road Initiative Japan Research Center (BRIJC) founded in Tokyo at the end of November 2017.②The Belt and Road Initiative Japan Research Center Founded in Tokyo, People's Daily, Dec. 1, 2017.Yukio Hatoyama, former prime minister of Japan, noted at a recently closed international forum that, it was important to leverage the BRI to facilitate current cooperation between Japan,China and South Korea.③See https：//www.yidaiyilu.gov.cn/ghsl/hwksl/37676.htm.At the end of January 2018, the Japanese government showed positive attitudes towards joining the BRI and exploring third-party market cooperation.④See https：//m.thepaper.cn/newsDetail_forward_1975275?from=singlemessage&isappinstalled=0, n.d.

1.3 General approach to the alignment

The importance of the CJK FTA in the future is without doubt. However, it is still open to discussion regarding how exactly it will align with the BRI to play a concrete role.⑤See http：//live.people.com.cn/note.php?id=998150918102039_ctdzb_006.At present, there is no literature addressing this topic, and only a very few papers discuss the relationship between Northeast Asia and the BRI.⑥Liu, 2015; Song, 2016.When promoting the BRI, China emphasizes the necessity to make full use of existing multilateral and bilateral mechanisms and leverage existing, proved regional cooperation platforms while injecting new elements and vitality.⑦See http：//www.ciis.org.cn/chinese/2016-08/12/content_8958163.htm.How exactly should the existing, under-negotiation CJK FTA be “l(fā)everaged” and“injected with new elements” so that it becomes aligned with the BRI? The general approach may feature the alignment of master plans, the viability of cooperation and finally the embedding of rules.

Specifically, first of all, the major Asian-related diplomacy and development plans of Japan and South Korea should be reviewed to identify their shared interests with the BRI, so as to facilitate the alignment of master plans. As noted by researcher Monan Zhang, the BRI involves many national, regional, and international organizations while countries and jurisdictions all have their own priorities. So, to push for substantive results under the BRI, it is necessary to make thorough and in-depth alignments in development strategies, plans and various policy priorities while respecting national interests and willingness to cooperate.⑧See https：//www.yidaiyilu.gov.cn/ghsl/gnzjgd/20481.htm, n.d.Further, based on these shared interests, the full consideration of current practices in the three countries should be made to reanalyze and assess their comparative advantages and how they complement each other, and ultimately achieve alignment in the viability of trade cooperation. Finally, these analyses will inform the design and embedding of specific rules within the CJK FTA framework, strengthening its alignment with the BRI in terms of rules.

2. Alignment in master plans: shared interests and current cooperation

2.1 A shared interest under the three countries' master plans: Central Asia

2.1.1 China: BRI

According to the 2015 Vision and Actions, the BRI has two components, one on land and the other at sea. On land, the BRI will focus on jointly building a new Eurasian Land Bridge and developing the China-Mongolia-Russia, China-Central Asia-West Asia and China-Indochina Peninsula economic corridors. At sea,the Initiative will focus on jointly building smooth, secure and efficient transport routes to connect major ports and nodes covered under the BRI. So, it is obvious that, as a bridge between the East and West, Central Asia is the key to the land-wise success of the BRI. In May 2017, China published a paper titled Building the Belt and Road: Concept, Practice and China's Contribution, which notes that Central Asia is important to “open,inclusive” development under the BRI.①See https：//www.yidaiyilu.gov.cn/zchj/qwfb/12658.htm, n.d.The IMF, in its report forecasting the economic growth of Central Asia, Southwest Asia and the Middle East, also pointed out that, “China's BRI not just restores the ancient silk roads that once connected the East and West, but also reshapes the entire economic and trade patterns of the Eurasian continent, particularly Central Asia.”②See https：//www.yidaiyilu.gov.cn/xwzx/hwxw/ 32605.htm, n.d.

2.1.2 Japan: Arc of Freedom and Prosperity (AFP)

In 2006, the Japanese Foreign Minister, Taro Aso, delivered an important speech titled “Arc of Freedom and Prosperity: Japan's Expanding Diplomatic Horizons.”③See http：//www.mofa.go.jp/announce/fm/aso/speech0611.html.Under this AFP framework, Japan attempted to play an escort runner role in supporting an extensive “arc” that extends from Northeast Asia to Central Asia,Caucasus, Turkey, central and eastern Europe and the Baltic states. Once such an arc is demarcated, covered countries will gradually find their paths towards freedom, prosperity, market economy, rule of law, and respect for human rights, among other values.④See http：//www.mofa.go.jp/announce/fm/aso/speech0611.html.So obviously, Japan and China have their shared interests in Central Asia. Later, Prime Minister Abe introduced the new concept of Asia's Democratic Security Diamond(DSD) at sea, with the AFP still an important land diplomatic policy of Japan.⑤Asia's Democratic Security Diamond, Project Syndicate (Dec. 27, 2012).This is due to the realization of the importance of the AFP's survival that Abe became the first Japanese prime minister who visited all five Central Asian countries (Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan and Kyrgyzstan) in 2016, with the hope of forging closer economic ties with these countries.⑥Walker & Azuma, 2015.

2.1.3 South Korea: Eurasia Initiative

Regarding South Korea, President Park Geun-hye put forward the Eurasian Initiative at the 2013 International Conference on Global Cooperation in the Era of Eurasia. This ambitious initiative provides a set of guidelines for building the Eurasian continent into a “single unified,” “creative” and “peaceful” continent.To make the Eurasian continent a real unified whole, connectivity across the continent should be restored and renewed and Silk Road Express trains built to connect South Korea (starts from Pusan), North Korea, Russia,China, Central Asia and on to Europe, expanding from the northeastern end of the continent to the whole of Europe.⑦See http：//www.South Korea.net/Government/Briefing-Room/Presidential-Speeches/view?articleId=114334, n.d.Central Asia is clearly a key part of South Korea's major diplomatic plan.

This indicates that, though the BRI, AFP and Eurasia Initiative serve their respective national diplomatic policies, their recognition of Central Asia's importance is converging.⑧Len, 2008.Thus, given coordinated foreign policies and consensus on foreign investment rules, there are opportunities for mutual understanding and cooperation regarding Central Asia within the trilateral cooperation framework. The CJK FTA is very likely to play an important role in promoting stable, lasting economic development in Central Asia. This is not just a core objective under the BRI, but also in line with the major foreign investment plans of Japan and the ROK.Considering this, it is necessary to look at the three countries' involvements in the development of Central Asia, to explore possible trilateral cooperation for the greatest benefit of all.

2.2 Current cooperation between the three countries as external players with Central Asia

Central Asia has long been known for its strategic location, rich energy resources and vast market potential, playing an increasingly important role in global geopolitics. However, due to the low degree of economic cooperation, political unrest, and distrust between the five Central Asian countries, among others,this part of Asia has largely relied on foreign drivers for economic growth and investment①Len, 2010.in which China,Japan and South Korea have played their important roles as external players.②Len et al. eds., 2010.

2.2.1 China: Shanghai Cooperation Organization (SCO)

The SCO has been an important venue for various forms of cooperation between China and the Central Asian countries.③Turkmenistan is not yet a member of the SCO.After the BRI was put forward, the SCO also responded positively. This shows that China will expand its economic cooperation with Central Asian countries via the BRI, a bigger multilateral platform,to which Central Asia has showed support and given positive responses.④See http：//www.ciis.org.cn/chinese/2015-06/08/content_7970687.htm.The Chinese government has pledged to allocate USD 16.3 billion to fund regional integration and the restoration of previous trade routes under the BRI.⑤See http：//www.cfr.org/backgrounder/shanghai-cooperation-organization.Experts believe that the development of the SCO and the Belt and Road may complement each other, creating win-win opportunities. The SCO, with over a decade of extensive experience, can serve as a platform supporting the construction of the Belt, while the Belt can create wider space for the SCO.⑥See http：//www.ciis.org.cn/chinese/2015-01/20/content_7620809.htm.Also,SCO members states should become early beneficiaries under the BRI.⑦See https：//www.yidaiyilu.gov.cn/ghsl/gnzjgd/15636.htm.

On December 16, 2015, the Statement of the Heads of Governments (Prime Ministers) of the Shanghai Cooperation Organization Member States on Regional Economic Cooperation (“Statement 2015”) was issued,reiterating the SCO member states' stance towards the BRI and saying that the Initiative is in line with the development objectives of the SCO.⑧Statement of the Heads of Governments (Prime Ministers) of the Shanghai Cooperation Organization Member States on Regional Economic Cooperation, 2015.

Later the Tashkent Declaration of the 15th Anniversary of the SCO (“Tashkent Declaration”) signed on June 25, 2016 reiterated their support for China's initiative on building the Silk Road Economic Belt and their plan to further put in place this initiative, leveraging the Initiative as one of its means to create favorable conditions for regional economic cooperation.⑨Tashkent Declaration of the 15th Anniversary of the SCO, 2016.

2.2.2 Japan: “Central Asia plus Japan” Dialogue

Japan established diplomatic ties with Central Asian countries in 1992. Since then, Japan has been actively involved in the region's development through its unique diplomatic means.⑩Len, 2010.In 1997, the Japanese government introduced the idea of “Silk Road diplomacy,” bringing about a wave of “Central Asia fever.”①Len, 2010.During this period, Japan-Central Asia cooperation mainly took the form of government development aids, including“Japanese Yen loans” (long-term, low rate) and “grants and technical assistance.”②Len, 2010.About 30% of Japanese government development aid went to major Central Asian countries (OECD DAC members).③Speech by Mr. Taro Aso, Central Asia as a Corridor of Peace and Stability, Ministry of Foreign Affairs of Japan, 2006.As reciprocal visits between heavyweight and high-level officials between countries grew more frequent, Japan and Central Asia's economic ties saw enormous progress.

In 2004, the “Central Asia plus Japan” Dialogue was fully launched, marking the fact that economic cooperation had entered a new epoch.④Len., 2010.In 2006, in response to the said AFP program, Taro Aso, then Japanese Foreign Minister, put forward “three guidelines” in his speech “Central Asia as a Corridor of Peace and Stability” to govern Japan's diplomatic relations with Central Asian countries; approach the region from a broad-based perspective, support for "open regional cooperation,” and seeking partnerships rooted in holding universal values in common.⑤Speech by Mr. Taro Aso, Central Asia as a Corridor of Peace and Stability, Ministry of Foreign Affairs of Japan, 2006.With regard to “open regional cooperation,” Taro Aso stressed that the main players are the countries of Central Asia themselves. Japan is merely a “catalyst” to the process. Japan has decided to interact with Central Asia in a spirit of full openness...Japan hopes that other countries from outside the region also uphold the principles of openness and transparency.⑥Speech by Mr. Taro Aso, Central Asia as a Corridor of Peace and Stability, Ministry of Foreign Affairs of Japan, 2006.With the above guidelines, this dialogue mechanism is deemed as unique in the way it supports regional integration in Central Asia and advocates addressing regional problems with capabilities and methods of their own.⑦Dadabaev, 2016, p.22.

Japan and Central Asian countries held a succession of meetings, conversations, forums and other exchanges under this mechanism.⑧Central Asia plus Japan Dialogue, Ministry of Foreign Affairs of Japan, 2016.Particularly worth noting are the “Central Asia plus Japan” meetings during 2011, 2014 and 2016. The 2011 “Central Asia plus Japan” Economic Forum set out the fundamental framework for how Japan can play a catalyst role in facilitating Central Asian regional cooperation for harmonious coexistence and development. This forum identified and discussed three important issues:how to drive the economic development of Central Asia as a whole, how can the region turn itself into an attractive common market for foreign investors, and how should Japanese companies contribute to the region's economic development.⑨Key Discussion Points, Japan-Central Asia Economic Forum in the framework of the “Central Asia plus Japan” Dialogue for the Promotion of Japan-Central Asia Economic Exchanges, Ministry of Foreign Affairs of Japan, 2011.Following this 2011 forum, cooperation gradually expanded into wider areas from the original five areas including energy saving, disaster prevention, and trade and investment).⑩Keynote Speech by Mr. Hirotaka Ishihara, “Central Asia plus Japan” Dialogue (Sixth Tokyo Dialogue), Ministry of Foreign Affairs of Japan, 2014.“Aiming to identify common issues among nations in the region and establish projects that will benefit not only individual countries but also the region as a whole,” the 2014 “Central Asia plus Japan” Dialogue in Tokyo set out a new direction for regional cooperation -- cooperation in the field of agriculture.

11In addition, the Tokyo dialogue suggested that the cooperation should be diverse, and that it was also necessary to discuss how to include “Japanese characteristics” in projects based on what has been indicated regarding assistance and the

11 Keynote Speech by Mr. Hirotaka Ishihara, “Central Asia plus Japan” Dialogue (Sixth Tokyo Dialogue), Ministry of Foreign Affairs of Japan, 2014.technologies that Japan can provide.①Chairperson's Summary, 2014.At the eighth “Central Asia plus Japan” Tokyo Dialogue held in August 2016, discussions focused on the theme "Issues for Improved Connectivity in Central Asia and Possibilities for Regional Cooperation," and confirmed another important direction of cooperation with Central Asia:transportation and logistics②“Central Asia plus Japan” Dialogue： Eighth Tokyo Dialogue, Ministry of Foreign Affairs of Japan, 2014..

2.2.3 South Korea: South Korea-Central Asia Cooperation Forum

Since it established diplomatic ties with the Central Asian countries in 1992, South Korea has maintained cooperation relationships through many summits, dialogues, high-level meetings and joint economic projects③Joungho, 2016.. In general, South Korea-Central Asia cooperation has gone through three stages. The first stage was the “South Korea-Central Asia Cooperation 1.0 era” (prior to 2007) characterized by diplomatic bonds and cooperation relationships that were quickly forged. During this stage, South Korea started to arranged exchanges and cooperation with Central Asia due to the region's strategic location, economic structures that complemented South Korea's cultural similarities and the presence of South Koreans. Meanwhile, South Korea also fully realized that the lack of a cooperation mechanism had impeded improved relations with the region, particularly in sustained, multidimensional cooperation.④Joungho, 2016.

Because of this, South Korea ushered in the “South Korea-Central Asia Cooperation 2.0 era” (2007-2014) and launched the South Korea-Central Asia Cooperation Forum in 2007 as a standing multilateral consultation mechanism. This South Korea-led forum was intended to bring closer cooperation ties between South Korea and the Central Asian countries, erecting a milestone in Eurasia international cooperation. The forum helped expand the scope of cooperation from the original energy sector to IT, high-tech, construction,culture, tourism, education, textiles and agriculture, among other areas.⑤Joungho, 2016.Such notable progress would have been impossible without efforts led by former President Lee Myung-bak, who took office in 2008. Mr. Lee put forward the Global South Korea policy that requires South Korea to assume greater responsibilities on the international stage, proving that a “middle power” like South Korea can also make important contributions to the international community.⑥Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”O(jiān)ne of the most important efforts was the New Asia Initiative, rolled out in 2009. This initiative was intended to “strengthen substantive cooperation with all Asian countries including those in Central and South Asia.” The gist of the New Asia Initiative is that South Korea, as a middle power,can serve as a “bridge” between big powers and small countries, and between developed and developing economies.⑦Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”

As the cooperation went deeper, South Korea-Central Asia cooperation entered its 3.0 era in 2014.⑧Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.” Id.During the 8thSouth Korea-Central Asia Cooperation Forum, South Korean foreign minister Yun Byung-se said that the South Korean government “will include wider Eurasian cooperation in its policy planning and act in line with the Eurasia Initiative to pursue shared prosperity and cooperative diplomacy with Central Asia.”⑨Foreign Minister Meets with Vice Foreign Ministers of Five Central Asian Countries, Ministry of Foreign Affairs Republic of South Korea, 2014.Under this initiative, the South Korea-Central Asia Cooperation Forum would take two major measures. First,in terms of areas for cooperation, the primary task of the South Korean government is substantive cooperation in public health, forestry, highways, agriculture and environmental protection, with a view to creating more jobs for both South Korea and Central Asian countries and facilitating exchanges and cooperation between SMEs and peoples between countries. In particular, cooperation projects regarding highway technology will“l(fā)ay an important foundation for cooperation in railway and other fields on the Eurasian continent.”①ROK and Central Asia Hold their 8th Cooperation Forum, Ministry of Foreign Affairs Republic of South Korea, 2014Second,a standing secretariat was proposed to “strive for more substantive progress in bilateral cooperation, hold meetings on a regular basis and pick out tailored agendas.”②Former Ambassador Choi II-song Appointed as Chairman of the Preparatory Committee for the ROK-Central Asia Cooperation Secretariat Date 2014.06.03,Ministry of Foreign Affairs Republic of South Korea, 2014.The 9thSouth Korea-Central Asia Cooperation Forum launched the inaugural ceremony of the Preparatory Committee for the ROK-Central Asia Cooperation Secretariat.③Preparatory Committee for the ROK-Central Asia Cooperation Secretariat Holds its Launching Ceremony Date, Ministry of Foreign Affairs Republic of South Korea, 2015.It is worth noting that South Korea is the first country to have reached a consensus on setting up a multilateral secretariat with the five Central Asian countries.④Preparatory Committee for the ROK-Central Asia Cooperation Secretariat Holds its Launching Ceremony Date, Ministry of Foreign Affairs Republic of South Korea, 2015.

3. Alignment in viability of cooperation: approaches that differ yet complement one another

3.1 Comparison of approaches: pragmatism vs. idealism

The above review of the current status suggests that under the grand diplomatic plans of the BRI, AFP and Eurasia Initiative, China, Japan and South Korea have shared interests, and as important external players involved in the development of Central Asia, are adopting different approaches to cooperation. In general,China prefers a pragmatic approach, while Japan and South Korea an approach combining idealism with pragmatism.⑤Dadabaev, 2016.This difference is mainly the result of three slightly different strategic considerations.

Table 1: Comparison of China, Japan and South Korea as external players in Central Asia

Specifically, as summarized in Table 1, in addition to this region's abundant resources and its huge trade potential and investment markets, for China, anti-terrorism and border security have been top priorities in dealing with Central Asian countries.①LIU, Undercurrents in the Silk Road： An Analysis of Sino-Japanese Strategic Competition in Central Asia.Therefore, the SCO, as a major mechanism for cooperation between the two sides, deals with a wide range of areas including military, security, economics, and culture. Over the past decade, the SCO has evolved from a functional organization that has successfully solved border security issues (three forces) into a new entity that is exploring new objectives and areas for cooperation, such as expansion in pipelines and transport networks and trade relations.②Dadabaev, 2016.However, this “thread” of geopolitics would inevitably add a “political touch” to economic activities. Particularly, China has been increasingly labeled as a “dominant force” in Central Asia.③Zhang, 2015.To avoid such claims, China has stressed that it seeks to develop “neighborly” partnerships with countries in this region based on respect for sovereignty and the “SCO Spirit.”④Dadabaev, 2016.China's strategic considerations have preset a more pragmatic line for its diplomatic policy towards Central Asia.⑤Dadabaev, 2016.

In contrast, the strategic considerations of Japan and South Korea, neither of which are neighboring countries of Central Asia, are less political. This difference is also reflected in their cooperation mechanisms.Compared to the SCO, the “Central Asia plus Japan” Dialogue and the South Korea-Central Asia Cooperation Forum are both operationally more economy-oriented. Relevant reviews noted that, in addition to energy and trade investments, Japan has an additional strategic consideration of enhancing its international position.⑥According to Section 1(2) under the “Central Asia plus Japan” Dialogue Action Plan, Japan and Central Asian countries have realized that, “The crux of the Security Council reform is to increase the number of both permanent and non-permanent members. The Central Asian countries expressed their expectation that Japan would play a more political role in the international community and confirmed that they would unanimously support Japan's becoming a permanent member.” See Tony Tai -Ting LIU, Undercurrents in the Silk Road： An Analysis of Sino-Japanese Strategic Competition in Central Asia.As for South Korea, its additional strategic consideration may be the introduction of its modernization experience to Central Asia, to pursue the goal of a “global South Korea.”⑦Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”However, seen from the general approach,given their geopolitical limits, lack of political interests and lack of historical links, Japan and South Korea, as non-leading players, had to strive to establish “accessible, appealing” relations with Central Asian countries.⑧Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”

For this reason, pursuant to its three guidelines built on “open regional cooperation,” Japan has pledged to serve as a catalyst in the process of promoting intra-regional collaboration and cooperation among Central Asian countries on common regional issues in order to realize harmonious coexistence and development.⑨Key Discussion Points, Japan-Central Asia Economic Forum in the framework of the “Central Asia plus Japan” Dialogue for the Promotion of Japan-Central Asia Economic Exchanges.While, South Korea sees itself as a “multidimensional player,” a responsible stakeholder in addressing political,economic, security, environmental and other challenges throughout the region.⑩Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”Thus, it is obvious that the strategic considerations of both Japan and South Korea regarding Central Asia are characterized by a combination of idealistic objectives with practical expectations, with Japan's more idealistic than that of South Korea.

3.2 Comparison of scopes: complementary advantages

Under different approaches to cooperation, China, Japan and South Korea prioritize different areas when engaging in the development of Central Asia, showing their respective strengths and weaknesses.China is currently the largest trade partner of Central Asia, with bilateral trade soaring up from USD 547 million in 1994 to USD 450 billion in 2014.①LIU, Undercurrents in the Silk Road： An Analysis of Sino-Japanese Strategic Competition in Central Asia.Particularly, following the launch of the BRI, China extended its cooperation in the region to a multilateral level via existing economic cooperation mechanisms provided by the SCO which, in its Statement 2015, identified seven major areas for cooperation, including transport, trade in goods and services, investment, capacity cooperation, IT, health care and education, e-commerce and energy efficiency, and financial cooperation, of which priority is given to infrastructure development and production capacity investment. The China-led Asian Infrastructure Investment Bank (“AIIB”), as a financing guarantee for the BRI, also opened in early 2016.②Bi, 2016.These efforts have given China great competitive edges against Japan and South Korea in the development of necessary transport infrastructure “hardware.” In addition, China stressed non-inference in internal affairs and respect for sovereignty in its economic activities in Central Asia.This can avoid governance problems like economic or political strings attached, thus requirements set by local governments can be easily met.③Dadabaev, 2016.This factor constitutes another advantage in economic efficiency over Japan and South Korea and enables maximization of China's benefits in a practical way and on a large scale.

However, every coin has two sides. Such a pragmatic approach has caused certain negative effects. The main problem is that China has been too absorbed in pursuing its own interests in this region to consider sustainability of local communities and local interests.④rLen, 2010, Godehardt, 2014; Odintsov, 2016.There are some complaints that Chinese companies operating in Central Asia tend to hire Chinese, rather than local residents, thus failing to create jobs for local communities and local people are not able to benefit from Chinese companies' involvement in the region's development.⑤Odintsov, 2016.Moreover, infrastructure projects funded by Chinese companies largely have their own contractors and management systems that are not always compliant with local regulations. This often leads to local protests and attacks against China's employment practices.⑥Len, 2010.Further, some critics noted that China would lobby local high-level officials for preferential treatment towards Chinese companies at the expense of local businesses, which promotes increased corruption in Central Asian countries as “Chinese acquisitions”grow.⑦Christopher et al. eds., 2010.For this reason, residents' objections to “Chinese dominance” or the negative attitude of Sinophobia has become one of the biggest challenges.⑧Odintsov, 2016.

Compared with China, Japan takes a more cautious and sustainable approach. Under the “Central Asia plus Japan” Dialogue mechanism, Japan did not initially cover extensive areas for cooperation, but started with five narrow areas including energy saving, disaster prevention, trade and investment, then extended to agriculture, transport and logistics. This approach draws upon Japan's cooperation with the ASEAN countries.⑨Keynote Speech by Mr. Hirotaka Ishihara, “Central Asia plus Japan” Dialogue (Sixth Tokyo Dialogue).These cooperation areas were identified and confirmed based on the idea of “giving priority to address common issues in the region.”⑩Keynote Speech by Mr. Hirotaka Ishihara, “Central Asia plus Japan” Dialogue (Sixth Tokyo Dialogue).In addition, Japan advocates open regional cooperation and positions itself as a mere “catalyst” in Central Asia, emphasizing the importance of mutual understanding.

Therefore, while China's economic expansion has begotten mixed feelings in Central Asia, Japan's pragmatic yet idealistic approach which factored in local interests and governance has won itself a more positive image.①Walker & Azuma, 2015.Besides, though Japan does not possess the same strength and competitiveness as China,its strong edges in technical experience and support help position it as an attractive partner for Central Asian countries.②Abbas,, 2015.This means that compared with China who leans to necessary “hardware” like transport infrastructure, Japan is better at developing “software” like infrastructure (advanced skills) and legal frameworks that can ensure Central Asia's sustainable and equitable development.③Kuchins, 2015.

Nonetheless, Japan's approach and policies that combine realism and idealism has its problems. For example, Japan advocates open regionalism, and calls for partnerships rooted in universal values. This means that when granting loans or taking other assistance actions, the Japanese government would often attach additional strings (e.g. democracy, market economy, human rights protection and rule of law) that blend Western and Eastern values.④Dadabaev, 2016.Such additional strings in effect reflect Japan's ambivalent, “uncertain”diplomatic policies, and appear slow and inefficient compared to other external players like China.⑤Dadabaev, 2016.Furthermore, Japan's vague definition of its interests in this region also adds to the hesitation of Japanese companies to venture into the Central Asian market. Japanese companies are consistently risk-averse in general and are not overly willing to venture into this market due to uncertainties in the surrounding environment.⑥Len, 2010.

South Korea also takes an approach that blends the pragmatic with the realistic, but is less idealistic than Japan and less pragmatic than China. Specifically, compared with Japan, South Korea values economic and trade ties more than the domestic political affairs of the Central Asian countries.⑦Christopher Len, 2010.Especially, after the Eurasia Initiative was announced in October 2013, bilateral cooperation's prioritized areas extended to public health, forestry, railway, agriculture, environment and textiles under the South Korea-Central Asia Cooperation mechanism. In terms of economic cooperation, South Korea's biggest advantage lies in driving for substantive progress by setting up a standing multilateral secretariat. In addition to economic and trade relations, South Korea also expects to introduce its own experience in modernization to Central Asia, of which democratization (values including democracy, open markets and a free society) is a key component.⑧Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”This differentiates South Korea from China. Such a position between those of China and Japan, in fact, reflects South Korea's self-positioning as an important “middle power” that plays a bridge role between big powers and small countries, and between developed and developing economies. This constitutes another advantage of South Korea that can help enhance Central Asia's recognition of its possibly bigger role.

For all that, South Korea's influence in Central Asia is clearly the smallest among the trio as it became involved in this region later than the other two countries.⑨Len, 2010.Among the five Central Asian countries, Uzbekistan has been at the heart of South Korea's engagement in cooperation here since the 1990s, with the biggest project being the Navoiy transport hub built by South Korea in 2008.①Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”Besides, Kazakhstan, the biggest and richest Central Asian country, has been another focus of South Korea's involvement in this region. Kazakh President Nursultan Nazarbayev viewed South Korea as an important driver for Kazakhstan's industrial development.However, in the other three less-developed countries, South Korea's involvement is still low.②Hwang, A New Horizon in South Korea-Central Asia Relations： The ROK Joins the “Great Game.”Thus, it is still to be seen how and if South Korea would give full play to its role as a middle power in this region.

3.3 Viability of cooperation in Central Asia between the three countries

Diplomatic policies of this northeastern trio towards Central Asia have all evolved from the early information gathering stage to having established their own cooperation mechanism. The commonality of the three countries is their attempt to become the region's strategic partners through their active involvement in the region's development.③Dadabaev, 2016.Particularly, since the launch of the BRI and the AIIB, it seems that China has emerged as a leading player in Central Asia. At the same time, guided by the AFP and the Eurasia Initiative respectively, Japan and South Korea have actively increased their substantive cooperation with this region.

The trio have become external players that are integral to the development of Central Asia, playing increasingly greater roles. For now, China, Japan and South Korea are proceeding with their respective agendas in Central Asia, and they will inevitably compete fiercely with each other. Despite this, as suggested by the above analysis, there is great potential for complementary roles and cooperation between the three.

Specifically, China is the most influential and economically efficient external player in Central Asia,with strong competitive edges in building necessary hardware including transport infrastructure. However,compared with Japan, China lacks experience in related after-sale services like technical assistance. Besides,the vast sums of money and efficient construction China has poured into various cooperation areas during the early stage may lay a solid foundation for other external players going forward. This would reduce the concerns of cautious Japanese companies and facilitate their investment in the region. This will also help South Korea increase its influence in this region. In turn, both Japan, as a catalyst and a partner committed to building “software” including infrastructure rules, legal frameworks and universal values, and South Korea,as a middle power trying to export its modernization experience to Central Asia in a soft way, can to some extent help change the local negative attitudes towards China, including Sinophobia. If there is a trilateral cooperation mechanism to maximize the advantages and minimize the disadvantages of the trio, it is possible that integrated collective effects would be generated by the trio's involvement in the development of the region,with potential win-win results for all.

4. Alignment in embedding of rules: the concept of a “Central Asia chapter” for the FTA

Following the alignment in master plans and the viability of cooperation, alignment in embedding of rules should ensue, i.e., translate this analysis into binding rules. As noted above, this paper suggests that the CJK FTA, of which basic consensus has been reached, can be leveraged to further discuss and dictate “foreign investment cooperation” in Central Asia as a thirdparty market, which would in turn push the envelope and facilitate current negotiations. This move would not only benefit the implementation of the BRI,but also push ahead the implementation of Japanese and South Korean investment strategies in the region. A “Central Asia chapter” may be included under the CJK FTA framework to separately govern investment cooperation issues in the region, and consider building the core components of the mechanism in terms of fundamental principles, specific rules, and with an executive body (see the figure below).

First, China, Japan and South Korea should reach consensus to make a “mixed, open” sustainable development model the fundamental principle, echoing the openness and inclusiveness advocated by the BRI.Such an ideal model not only matches the expectation of the Central Asian national governments to sustain regional opening up and pursue diverse trade routes,①Len, 2010.but also helps Japan and South Korea take more direct and strong actions to balance China's influence in this region, and reduce or remove local fears of “Chinese monopoly” or Sinophobia. In turn, China going hand in hand with Japan and South Korea will help clarify the “uncertainty” in Japanese diplomatic policy, and help turn the overly broad, vague “universal values” into clear “Asian values” that better fit in with regional development.

Second, in designing specific rules, two key points must be considered. The first is that a set of preferential rule arrangements is required to support and facilitate cross-border cooperation between the three players,especially in one prioritized area -- infrastructure development badly needed by Central Asia.

In light of this, the CJK FTA may discuss in negotiations and stipulated tax relief, trade and investment facilitation and other preferential conditions to incentivize companies in the three countries to adopt a diversity of cooperation modes for relevant infrastructure projects, such as technology transfers, joint R&D,cross-shareholding, co-investments, and joint bidding or cross-subcontracting for capital projects.②Yan, Japan's Latest Comments on the BRI： the Key is How to Step up its Implementation.n.d.This way,China's comparative advantages at the early stage, i.e., large sums of money and operational efficiency in local infrastructure development, may be combined with the extensive experience and advantages of Japan and South Korea in the following stages, including maintenance services and technical aid, to drive the sustainable development of Central Asia. It is also worth noting that Japan's rich experience in public-private partnerships(PPP) may be drawn upon and introduced in trilateral cooperation mechanisms.③Bi, 2013.

The other point is that a healthy playing field is essential to trilateral cooperation and should be factored in. A scholar who has studied the modes of interactions between Central Asia on the one hand and China, Japan and South Korea on the other assumed three different scenarios: 1) China-centric hegemonic governance; 2) alternative multipolar interactions formed through “conspiracy;” and 3) alternative multipolar interactions formed through “competition.”①Contessi, 2016.This scholar also pointed out that scenarios 1) and 2) would both lead to a more fragmented international system, while scenario 3) would have far-reaching impacts on the international system.②Contessi, 2016.Trilateral coordination mechanisms should also identify integration in the extraterritorial enforcement of competition laws, especially in areas related to infrastructure development such as government acquisitions and tendering and bidding should encourage cooperation while maintaining fair competition.③For related literature, see, e.g., 稗貫俊文, ed., 《競(jìng)爭(zhēng)法の東????共同市場(chǎng)》, Nippon Hyoron Sha Co.,Ltd., 2008; 栗田誠(chéng), 《東????地域における競(jìng)爭(zhēng)法制定の現(xiàn)狀と課題》, Journal of The Japanese Institute of International Business Law, 2005 vol.33.Particularly, special attention should be paid to virtuous competition between state-owned and private enterprises in a cross-border context. Chinese central enterprises are the main force in infrastructure development in Central Asia among other regions under the BRI.④See https：//www.yidaiyilu.gov.cn/ghsl/gnzjgd/3243.htm (last accessed Dec. 30, 2017).It is very important that a fair, nondiscriminatory and transparent system of international economic, trade and investment rules be put in place to coordinate central enterprises and other SOEs, private Japanese and South Korean companies, and Central Asian state-owned and private companies to facilitate the development of key projects via commercial,market-based mechanisms and means. The concept of fair competition mainly exists in Asia, and South Asia in particular. Mature Japanese and South Korean competition laws dedicated chapters to regular unfair trade practices.⑤Bi & Uytsel, 2015.Thus, what is more important is to explore an innovative system of international economics and trade for SOEs under the BRI from the perspective of fair play, with a view to crack the tricky problem of nonmarket economic status under the WTO multilateral system.

Third, in terms of the executive body, to better negotiate, mediate and amicably solve trilateral conflicts arising from open, mixed development, it is suggested that a standing body, i.e. a China-Japan-South Korea-Central Asia Cooperation Committee, be established under the “Central Asia chapter” of the CJK FTA. This committee would communicate and coordinate with the SCO, the “Central Asia plus Japan” Dialogue, and the South Korea-Central Asia Cooperation Forum. This committee could also assume the function of a dispute resolution body that peacefully rules increasing trade and investment disputes between the trio, such as China and Japan's bids for the Indonesian high-speed-rail (HSR).⑥See Fujio Kawajima, Conflicts and Trade Frictions between Free Market and National Capitalist Countries [自由市場(chǎng)國(guó)と國(guó)家資本主義國(guó)の衝突と貿(mào)易摩擦],International Economy (2016), vol.67,8-9.In a broader sense, this committee may, in the future, scale up its growing experience in dispute handling to other regions covered under the BRI, playing a“test bed” role for the creation of a uniform BRI multilateral dispute resolution mechanism.⑦Wang, 2017.

5. Conclusion

The BRI is nothing new, nor is it China's one-man show. Instead, it is an open, inclusive initiative that embraces all countries, international organizations and regional organizations who want to be part of it.

Though Japan and South Korea are not core countries covered under this initiative, they are located at the most vibrant eastern end of it. Particularly, Japan's joining in will be an important contributor to Asian regional integration under the BRI. This paper starts with the consensus-based CJK FTA to find the key to including Japan and South Korea in this initiative. FTAs are core vehicles for long-standing regional cooperation under the BRI. As the legal authority of an FTZ, a free trade agreement can help translate the results of regional trade integration under the BRI into binding rules. In the process of building the Belt and Road, China stresses that existing, proven regional cooperation platforms should be leveraged to bring in new elements and vitality.Considering this, the CJK FTA mechanism may be made use of in a way that is in line with the BRI to promote integration of rules by connecting the dots, thus facilitating the early realization of Asian integration.

Specifically, this paper, following the thread of alignment in the respective master plans, viability of cooperation and embedding of rules in sequence, has reviewed major diplomatic development plans rolled out by China, Japan and South Korea in recent years (i.e., BRI, AFD and Eurasia Initiative), and identified Central Asia as a region where the three countries have shared interests. As a result, given coordination in foreign policies and consensus on foreign investment rules, there are opportunities within the CJK cooperation framework for mutual understanding and cooperation in Central Asia-related issues. This paper has proceeded to fully review the trio's current cooperation with Central Asia as important external players in terms of major aspects including foreign policies, strategic considerations, cooperation mechanisms, cooperation rules and areas for cooperation.

Further, this paper has dissected the differences and complementary aspects of the three and explored the viability of trilateral cooperation. It has found that with respect to cooperation with Central Asia, China prefers a pragmatic approach while Japan and South Korea follow an approach combining idealism and pragmatism.At present, the three countries are separately proceeding with their respective agendas in Central Asia, thus there will inevitably be fierce competition and conflicts in some areas of cooperation. Despite this, there is enormous potential for the three to join hands. China boasts strong competitive edges in building necessary hardware like transport infrastructure but lacks experience in related after-sale services like technical assistance which Japan and South Korea are better at offering. China has invested large sums of money and efficient construction in Central Asia in various areas during the early stage, which may not only relieve cautious Japanese companies of their concerns and facilitate their investments in this region and help enhance South Korea's influence as well. In turn, Japan and South Korea's balancing role can help change, to an extent,the negative attitudes held by local communities towards China, including Sinophobia.

Finally, in terms of the alignment of embedding rules, this paper suggests that, leveraging the CJK FTA trilateral cooperation mechanism, a “Central Asia chapter” can be added to the existing negotiations framework through third-party market cooperation and a basic mechanism established from three aspects,i.e., fundamental principles, specific rules, and an executive body. First, China, Japan and South Korea should reach a consensus to make a “mixed, open” development model as the fundamental principle of cooperation regarding Central Asia, echoing the open, inclusive spirit advocated by the BRI. Second, in the detailed design of rules, a range of preferential rules arrangements should be developed to support and facilitate trilateral cross-border cooperation, especially in infrastructure development, and integration in extraterritorial enforcement of their respective rules governing competition be confirmed, especially in government acquisitions, bidding and tendering and other infrastructure-related areas, to encourage cooperation while maintaining fair competition. Particularly, close attention should be paid to healthy competition dynamics between state-owned enterprises and private companies in a cross-border context, with a view to exploring innovative models of SOEs' international economic and trade systems under the BRI. Third, a standing body, like a “China-Japan-South Korea-Central Asia Cooperation Committee,” should be set up to develope experience in handling disputes and to extend such experience to other regions covered under the BRI, serving as a “test bed” for the creation of a uniform BRI multilateral dispute resolution mechanism in the future. This paper calls for specific discussions on these three aspects respectively and suggests that the thinking approach of alignment in master plans, viability of cooperation and embedding of rules may be applied to analyzing the alignment of other Asian areas with the BRI.“Central Asia plus Japan” dialogue: eighth Tokyo dialogue, ministry of foreign affairs of Japan (Mar.18 2014).Asia's democratic security diamond, Project Syndicate (Dec. 27, 2012).