The recent East Asian financial crisis has affected the regional and global economies greatly, not to mention those countries where the crisis occurred.One of the consensuses that many economists reached was that the crisis could have been avoided if there had been enough information of what was going wrong in each country and a cooperative system that utilized the information to figure out appropriate preventive policy.On the financial side,in particular,China and Japan,the largest economies in the region holding large amounts of foreign exchange reserve,could have played a major role to bail out those countries in trouble at least in the short run. What was lacking at that time was a cooperative system that shares financial information among the neighboring countries and a coordinating system that harmonizes macroeconomic policy of countries in concern.Financial cooperation is only a small example of the areas in which Northeast Asian countries could work together for better economic development and enhanced regional stability. The region has already created the"ASEAN+3"and has held its own leaders' meeting three times. Surprisingly enough, however,there has not been a visible effort so far among three countries (China,Japan, and Korea)to form a trilateral cooperative body, despite that many expect that there will be enormous economic benefits through expansion of markets and strengthening division of labor among them. Some non-economic benefits would also be possible including diplomatic and security effects as seen in European Union. The region's voice in the international community will become much more affirmative as the cooperation results in the region becomes tangible and significant.The three nations could work together toward accomplishing economic integration a la European Union in the long run.In the meantime, however,the nations could adopt a stepwise approach to achieve the integration goal.This paper proposes a three-stage approach. In the first stage,the nations could work for deepening sectoral cooperation such as aforementioned financial cooperation.In the second stage,they could promote freer and fairer trade and investment. In
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