NORTHEAST ASIA now faces a series of critical security challenges. China's remarkable 25-year economic-reform effort has profoundly increased Beijing's economic, political and military influence in the region. Some fear that in response Japan will more aggressively assert its regional interests. At the same time, South Korea is now formulating a foreign policy that moves the country beyond its traditional role as a compliant U.S. ally, a change that could bring Seoul into diplomatic conflict with both Washington and Tokyo.

Finally, North Korea remains a dangerous, isolated and unpredictable country, as the six-party talks continue to fluctuate between hope and confusion. And looming over the region is the flashpoint of energy: The increasing demand in all of the countries of northeast Asia, particularly China, for secure supplies of energy heightens political tensions, sharpens unresolved territorial disputes, and creates fertile ground for misunderstanding and conflict.

In some ways, northeast Asia today evokes Europe at the turn of the 20th century, where rising regional powers, territorial conflicts and troubled bilateral relations led to fifty years of catastrophic violence. Some have argued that rising economic interdependence and substantial levels of foreign direct investment (FDI), particularly between China and Japan, make the current situation in northeast Asia less volatile. After all, between 1980 and 2003, FDI in Asian countries grew from around $4 billion to more than $100 billion. However, the absence of a multilateral security architecture capable of mediating conflicts and reducing tensions remains a pressing problem. And America's bilateral relations in the region have grown more complicated in recent years, leading some to question whether the United States by itself can serve as an effective arbiter.

Asia's existing multilateral organizations cannot fill this vacuum. The unwieldy structure and geographic reach of the Asia-Pacific Economic Cooperation (APEC) make it too broad to serve effectively as an instrument of northeast Asian diplomacy. The Association of Southeast Asian Nations Plus Three (ASEAN+3) is a smaller, better-focused organization, but it does not include either the United States or Russia and concentrates its efforts on the resolution of Southeast Asian problems. The December 2005 East Asia Summit in Kuala Lumpur will address broader Asian concerns, but neither the United States nor Russia will take part. The United States, South Korea and Japan have, since 1999, effectively coordinated their North Korean policies via the Trilateral Coordination and Oversight Group (TCOG). In fact, as TCOG's success suggests, the network of U.S. bilateral alliances across Asia represents perhaps the only effective existing institutional security structure in Asia. But TCOG confines itself to a relatively narrow agenda--it does not cover energy issues, for example--and it does not include China or Russia.

IT WAS North Korea's nuclear program that brought together the United States, China, Russia, Japan and South Korea in a multilateral format--albeit an ad hoc one--to address a major threat to the peace and stability of northeast Asia. The format for these discussions--working-level meetings that dealt with specific challenges and opportunities with an eye toward reaching a common cooperative goal--offers a useful model that could be broadened.

In our assessment, the North Korean negotiations definitively demonstrate the need for a more permanent five-party northeast Asian security structure that would bring together under one roof the United States, China, Russia, Japan and South Korea. This is why we think that the six-party talks on North Korea could be transformed into a permanent Northeast Asia Regional Forum (NERF).

The primary purpose of a NERF would be to organize multilateral diplomatic meetings at regular intervals, in which key energy, security and economic questions could be considered. The forum would bring together state representatives with the authority to address these questions at the same diplomatic level as the current six-party talks on North Korea. We also envision the forum expanding beyond government-to-government relations, with dual-track participation by leading private-sector voices for political and economic cooperation--such as CEOs from each of the five member states.

The establishment of a five-party northeast Asian security structure that includes the United States, China, Russia, Japan and South Korea would serve many purposes. For the United States, it would open opportunities for cooperation with countries outside its alliance system. It would also free the United States and its allies to focus their bilateral relationships on other issues. The six-party talks on North Korea have operated in this way. They have allowed Washington and Seoul to separate bilateral issues like force restructuring, trade and investment from the ultra-sensitive process of North Korea-related diplomacy.

Such a multilateral institutional framework would also formalize U.S. contact with China and Russia on northeast Asian security issues. Given Russia's role as a provider of Siberian natural and energy resources, as well as its involvement in regional territorial disputes, any multilateral forum in the region that does not include the Russian Federation will fail. Moscow's membership will reduce the possibility that eastern Siberia could become an unstable area of competition for energy resources. The threat of direct Russian-Chinese conflict is minimal, since the power imbalance between the two will only increase over time, but regional instability driven by zero-sum competition for Russian energy could emerge as a threat. Russia's inclusion will also help allay Moscow's fears that Washington intends to isolate the country and that Russia is not a full participant in Asian security discussions. China's participation would reflect its predominant importance in resolving regional issues. It would allow Beijing to maintain solid diplomatic contact with both its neighbors and the United States--despite the diplomatic disputes that often roil their relations.

Japan's membership will allow high-level representatives of its government to meet more frequently with their Chinese counterparts to work through diplomatic challenges unrelated to North Korea. South Korean participation will offer Seoul an opportunity to work on bilateral issues with other member states without the intrusion of North Korean issues into the discussions and to enhance their existing bilateral relationships in East Asia. Finally, the forum would also provide all the states of northeast Asia a venue in which to meet on equal diplomatic footing within a framework that includes the United States, still a key player in East Asia's political and economic life. In essence, the forum would be an institutionalized arena for negotiation. The NERF would not be an "alliance"--its role in East Asia would be more akin to that of the Organization for Security and Cooperation in Europe than to NATO. It will build confidence and contacts across East Asian boundaries.

THE FIRST area of potential conflict the forum could mitigate involves an increasingly complex energy challenge. All the parties share a vital interest in diversifying their supplies of oil away from increasingly unstable Middle East energy suppliers and toward the development of new and renewable sources. All would benefit from coordinated efforts to increase the efficiency of energy use and transport. All would profit from collective efforts to find solutions to infrastructure bottlenecks that artificially inflate energy costs in the form of an "Asia premium." Energy consumers (China, Japan, South Korea and the United States) can work with the region's primary energy supplier (Russia) to share information and develop market strategies that benefit all, even in today's tight global energy market. All forum members would benefit from joint energy-investment projects in Russia that promote the most efficient exploitation of eastern Russia's large energy deposits. Such an undertaking requires substantial (and risky) capital investment. Multilateral investment would allow each participant to diversify the economic risks inherent in such a large-scale and complex undertaking.

Attempts to coordinate energy policy raise two important questions. First, how can sources of supply be diversified without driving energy consumers into competition with one another? Every net importer of energy has an interest in diversifying its supply by both source and type. Individually, each country can diversify both. But in the aggregate, the global economy can only diversify by finding energy in new places. A large share of the world's energy supply now comes from the Middle East, a situation unlikely to change in the short term. The hardship produced by a global energy disruption can be shared but not eliminated. Unsurprisingly, everyone wants someone else to absorb the greatest possible share of that hardship. This dynamic breeds competition that drives up costs.

How can a multilateral northeast Asian energy-security system serve its members? By creating an environment in which the risks of energy disruption are more equitably shared. It is more difficult to accomplish this goal among states that differ in the types and sources of energy they consume. But China, Japan and South Korea are all deeply dependent on fossil-fuel imports from the Middle East. All three would benefit from diversification toward energy sources in other regions and suppliers whose output can reach the region without passing through the bottleneck at the Malacca Strait. China is now scouring the globe in search of new energy partnerships, a policy that creates new political tensions in its relations with other states, particularly the United States. The NERF would offer all participants an opportunity to coordinate the search for energy diversification, improving market outcomes for all the region's energy consumers and building trust among the NERF's members.

Essay Types: Essay