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.

Countries that are already thoroughly diversified by type and source of energy naturally favor a competitive international marketplace for energy commodities. But governments with poorly diversified consumption patterns, like those in northeast Asia, are particularly vulnerable to supply disruptions.

A first step toward a common northeast Asian energy policy is to help each state recognize the common threats they face. Volatility in energy markets over the last several years has been considerable. Responding to these unanticipated market shifts has been costly. A coordinated policy to pool investment in projects that reduce this unpredictability--and the costs that go with it--would serve the interests of all consumers. Energy demand growth is for the moment outstripping growth in extraction capabilities. In this context, when consumer states coordinate policy, they improve efficiency, reduce costs and ease the tendency of consumers to bid against one another for scarce resources and drive up prices in the process. Finally, increasing the region's reserve capacity offers another useful common objective to bring together northeast Asia's energy consumers. The World Trade Organization (WTO) recently endorsed similar objectives in all these areas of consumer coordination. In its World Trade Report 2005, released on June 30, the WTO called on Asian countries to cooperate on energy exploration, development, transport and reserve storage to ensure that ongoing economic growth does not fall victim to high energy costs. In addition, cooperation on energy-conservation initiatives serves the interests of all the region's energy consumers. Raising the level of efficiency with which they use energy can both decrease demand and increase available supply. Coordination of policy can even be extended to projects involving the production of nuclear energy.

THE SECOND question raised by the need to coordinate energy policy across the region is how can the interests of consumers and producers be aligned? Producers profit from high prices and tight supply. Any policy that reduces demand or expands the region's reserve capacity undermines market power that producers now wield. In northeast Asia, how can Russia, the region's big energy producer, be encouraged into a multilateral energy-security framework with the big energy consumers, including the United States?

Russia will remain a major energy exporter, but the interests of energy-consuming sectors of the Russian economy influence its politics. Unlike most large energy exporters, particularly in the Middle East, Russia has a large industrial base that consumes a lot of energy and will continue to grow. As a result, Russia's interests will continue to diverge from those of Saudi Arabia, Iraq, Nigeria and Venezuela. Russia's energy-consuming sectors need to reduce competition with outsiders for Russian energy. If northeast Asia's energy consumers coordinate investment in Russia's extraction capacity and underdeveloped energy-transport infrastructure, Russian energy consumers will benefit, and Russia's suppliers will more efficiently extract and transport their products.

Commodity markets face cyclical pressures. For now, producers clearly have the upper hand. Thus, even with the above arguments in mind, Russia may, for the time being, resist attempts to fully coordinate its energy policy with those of three of its largest customers. The greatest opportunity to bring Russia into such a regional energy-security framework will therefore occur when a fall in global demand or an increase in supply reduces Russia's market power. Now may not be the perfect moment to realize a northeast Asian energy-security framework. But preparation for such an opportunity is necessary, because the current upward trend in oil prices will not last forever.

Diffusing the regional energy crisis, in turn, could help establish a collective interest in the resolution of such long-standing issues as territorial disputes between NERF members and could encourage potential antagonists to consider the interests of regional partners in their bilateral disagreements. In many cases, the potential for cooperation on some issues is held captive by the intractable nature of other diplomatic conflicts. The NERF would allow member states to set aside disputes that cannot be resolved in the near term and to concentrate on mutually profitable opportunities for cooperation.

One of the most important of these is addressing the growing economic integration among the countries of the region. In Asia, increased integration patterns have not followed the model of the European Union, institutionalizing trade and commercial agreements to secure non-zero-sum outcomes. The integration process has spontaneously developed from the region's dynamic trading environment. We now have a situation where economic ties are strong but the development of a viable security framework has lagged. Northeast Asia's four major economies all have substantial current account surpluses that contribute to rapidly expanding foreign-currency reserves, mostly in U.S. dollars. An economic downturn that weakened their dollar holdings in the local currency would adversely affect the entire region. As a result, all potential NERF participants share an interest in joint action to mitigate risks associated with economic imbalances.

A multilateral forum could help create a stable northeast Asian economic environment. It could coordinate mutually beneficial steps toward predictable and sustainable economic policies that address currency issues, conflicts over intellectual property rights, lender-of-last-resort activities, regulatory standardization and, possibly, trade liberalization. The private sector could play a substantial role in that regard by promoting closer transnational cooperation, more open borders and greater integration of the region's economies.

FINALLY, A note of realism: We recognize that the construction of a Northeast Asian Regional Forum does not presume that all that is needed for the resolution of highly complex political, economic, energy and security issues is a venue in which the region's vice-ministers can gather and talk. The NERF would be intended as a multilateral framework for the five member states to find areas in which cooperation on particular issues serves their collective interest. An inability to solve all the region's problems should not discourage collective action on issues that can be addressed.

Northeast Asia is now producing more political risk than any other part of the world. China's economic growth, military capacity and political influence will continue to fuel suspicion of its intentions in the region and bring China into conflict for resources with the United States, Japan and others. Japan will continue to assert its own interests in response to perceived Chinese encroachment. Conflict around North Korea's nuclear program will escalate. South Korea will work to establish a certain policy independence from Washington. Russia's energy infrastructure will fail to keep pace with demand for its resources. U.S.-Chinese tensions will rise. Energy demand will continue to outpace supply growth.

But if China, Japan, South Korea, Russia and the United States can collectively address a few of the problems the region now faces, their cooperative work can then extend to other areas. In the process, the Northeast Asian Regional Forum could provide these states, and all who are subject to their policy choices, an urgently needed multilateral framework that reinforces economic interdependence, mitigates risks associated with political mistrust and bolsters regional security. The benefits will be felt throughout Asia and beyond.

Ian Bremmer is president of Eurasia Group. Choi Sung-hong is a former foreign minister of the Republic of Korea. Yoriko Kawaguchi is a former foreign minister of Japan.