Since the current WTO (World Trade Organization) rules have several unfair aspects favorable to exporting countries with large-scale farms like the U.S. and Australia, it would be impossible for Asian small-scale farming to survive under the rules. The rules are focusing on economic efficiency without considering equitable distribution of wealth and "external economies" such as national security and environmental concerns. Furthermore, although it is said that a total ban on export subsidies by the end of 2013 was agreed to, the pledge is very unlikely to be fulfilled because many "hidden" export subsidies are left out of this agreement.
Therefore, forming the East Asian FTA (Free Trade Agreement) is a way to strengthen cooperative relationships against unfairly severe free trade pressure from exporting countries with large-scale farms. It is important to jointly establish new criteria for East Asian food trade to ensure sustainable and diversified agriculture. In the longer term, it could serve as a good model for establishing fair food trade rules under the WTO.
However, our analysis showed that the East Asian FTA could endanger the existence of Japan and Ko-rea's rice farming because of huge gaps in agricultural prices and costs between Japan/Korea and other East Asian countries. Therefore, we need a measure to adjust the current agricultural productivity gaps in East Asia. A feasible measure is establishing the East Asian CAP (Common Agricultural Policy) with a fund collected in proportion to the GDP level of each partner country just like the EU budget. Using the funds, the uneven distribution of FTA benefits can be redistributed across borders.

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1. European integration has moved forward on a step-by-step basis, from Free Trade Area, Customs Union, and Common Market to Economic Union and is entering into the final stage of Complete Economic Union.
2. A historical review of European integration illustrates that three major factors have contributed to the successful deployment of the integration: strong political initiatives by relevant European leaders; active challenges in view of instituting the common market in the region from the beginning of the integration process, in particular in the area of agriculture; and successive monetary adjustment policies within member nations, followed by policy coordination in completing the monetary union.
3. Introducing an exclusive Common Agricultural Market in Europe preceded the institution of the overall Common Market and played an essential role in laying the ground for both the Common Market and European Economic Union. The Common Agriculture Policy (CAP) is instrumental in maintaining the function of Common Agricultural Market. Fine-tuning of the CAP has been arranged in timely accordance with the increase in the number of member countries as well as in the wake of over-supply of farm products, budget crisis and international policy debates in the forum of the WTO and others.
4. A history of European integration provides many good lessons for the challenge of Asian regional integration.

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The purpose of this paper is to examine the process and driving forces of the formation of the North American Free Trade Area and to discuss the characteristics of 'integration' of the agri-food market under NAFTA. Major driving forces of NAFTA are the huge market of the United States and foreign business operation of multinational corporations. Market integration in the agri-food industry has substantially developed under NAFTA; however, the achievement and characteristics of market integration differ by sub-sector of the agri-food industry. I will focus on the market integration of grain, oilseed, red meat and greenhouse vegetables between the US and Canada.
The main conclusions of the paper are the following points. First of all, the main purpose of NAFTA is not only trade liberalization but also elimination of regulation on foreign direct investment. In this context, NAFTA is the agreement at the stage of increasing intra-firm trade in North America.
Secondly, the purpose of NAFTA is the free movement of goods and capital, but movement of the labor force is strictly limited under NAFTA. This is the distinctive point compared with integration in the Euro-pean Union, which is pursuing free movement of goods, capital and labor force. Unlike EU-type market integration, NAFTA does not pursue shrinking the big disparity of wage level between the US/Canada and Mexico. Rather, multinational corporations have got benefit by such a big disparity of wage.
Thirdly, a major driving force of agri-food market integration is also foreign business operation by multinational corporations. Canada has been an important supplier of resource and primary goods for US companies and market. Canada's export of grain, oilseed and red meat to the US has increased rapidly under NAFTA.
Fourthly, there is asymmetry regarding economic structure, wage level and farming structure between the US/Canada and Mexico. Mexican corn growers have been put in difficulty by trade liberalization under NAFTA accompanied by deregulation of the domestic staple food market and elimination of domestic support for grain farmers. Labor forces from small-scale corn farms in Mexico have moved to the Maquiladora sector in the northern region or to the US and Canada as seasonal or temporary workers.

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This paper aims at forecasting the future course of East Asian Integration and evaluating its impact on Japanese agriculture.
For that purpose, we review the bilateral economic partnership agreements (EPAs) and regional EPAs in East Asia to elucidate the basic factors which promote or impede the negotiation of EPA. Based on the review, we hypothesize that the following basic factors are very important determinants for agreement: economic scale of countries concerned, difference in industrialization between the two countries, transportation cost between the two countries, the number of partner countries who have already made agreements of EPA, political weight of government on interest groups, the difference in government qualities between the two countries, and south-south agreement.
As a next step, we make an econometric analysis to test the hypotheses. The results of estimation show that the difference in industrialization between the two countries, political weight of government on interest groups, the difference in government qualities between two countries, and south-south agreement have negative impacts on EPA agreements, while the number of partner countries who have already made agreements of EPA has a positive impact.
From the investigation mentioned above, we conclude that the East Asian Integration will progress gradually as politically sensitive sectors will be excluded from free trade agreement and that its direct impact on Japanese agriculture will be minor though the indirect impact through globalization might be much more serious.

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