Japan on its part tweaked its East Asian strategy in response to the US moves: in late 2005 and early 2006 the Junichiro Koizumi government decided to sign free trade agreements with the five core members and economic partnership pacts with all 10 ASEAN countries by the end of 2007 to form a de facto East Asia community ahead of Washington and seize the steering wheel of East Asian affairs. It was later referred to as the "fast takeover of ASEAN" strategy.

By the end of March this year, Japan formed economic partnerships with all 10 members of ASEAN and accomplished its plan to seize the vantage point in ASEAN. Now it is eyeing Northeast Asia with the intent to take full leadership in maintaining order in the region to its own benefit. Another noteworthy move that Tokyo made was the departure of the "China-Japan-South Korea closed-door meeting" from the 10+3 format in late 2007, which further weakened the unique regional cooperation model.

From the economic point of view, the China-Japan-South Korea FTA is an ideal regional economic circle. In terms of the political and security situation, however, the three Northeast Asian nations face the risk of too many uncertainties in forming an FTA.

The fact that the economic partnership talks between Japan and South Korea were temporarily grounded in November 2007 reflected South Korea's assessment of real risks it was facing: one is that South Korea was not happy about Japan's tax reduction plan.

South Korea's LCD panel and semiconductor industries still rely on Japan for core components. Opening up its market will no doubt lead to greater trade deficit on South Korea's part and the automobile industry in particular will surely bear the brunt of a Japanese auto invasion.

Another risk lies in signs of an economic integration between the two sides on the Korean Peninsula as the Six Party Talks progress. This has led South Korea to seriously consider in what capacity it should join the EAC.