North-East Asia Forum on Trade and Transport Facilitation
At the recent United Nations Conference on Sustainable Development, the Heads of State and Government and high-level representatives reaffirmed that international trade is an engine for development and sustained economic growth. In North-East Asia, participation in global production networks has greatly increased trade among China, Japan and the Republic of Korea, although linkages with Mongolia and the Russian Federation are much less developed and harbour huge potential for future growth. North-East Asia also exhibits strong product complementarity (highest in all of Asia and the Pacific), which enhances the potential benefits of subregional trade
However, the economies in North-East Asia are trading less with each other than expected, due to high trade costs. In particular, non-tariff costs related to fulfilling regulatory requirements and domestic and international shipping and logistics costs, including of international intermodal transit transport, limit the volume of trade. While tariff barriers have decreased significantly, and will decrease further with the growing number of Free and Preferential Trade Agreements under discussion in the subregion, non-tariff barriers remain high.
The challenge for the subregion is to identify improvements in institutional setups, regulatory frameworks, logistics services and related infrastructure that can lower trade and transport costs and enhance trade flows, in the broader context of national and international strategies to promote sustainable development.