It's Not About Money; In strategically uncertain Asia, a new wave of big trade deals is often about securing political alliances.

Byline: Christian Caryl (With B. J. Lee in Seoul)

When the United States and South Korea announced their new free-trade agreement last month (details of which were released last week), the news was mainly economic. The deal, which will be the largest bilateral trade pact since NAFTA, would give American farmers and bankers alike better access to Korean consumers, and help Korean companies push more electronics, cars and textiles into the United States. Largely unreported was the political angle--the U.S.-South Korea free trade agreement comes at precisely the moment when America's military presence on the Korean Peninsula is rapidly diminishing, anti-U.S. nationalism in South Korea is growing and China is playing an ever more important leadership role in the region. "This FTA is about countering China," says Yang Sung Chul, a former U.S. ambassador to South Korea, now professor at Korea University in Seoul. "It's much more significant in strategic than economic terms."

You could say the same about any number of trade deals in Asia these days. While free-trade agreements have always been somewhat political, solidifying national relationships even as they bolster exports, the use of FTAs in geopolitical jockeying is reaching new heights in East Asia, where a flurry of deals between regional and international players including China, Japan, the United States, the EU, India, Australia, South Korea and others mark new alliances in a strategically uncertain part of the world. Since 1997, the number of FTAs in the region has risen from seven to 38. "The last time we saw this sort of frenzied bilateral activity was back in the 1930s," says Christopher Dent, a professor of political economy at the University of Leeds. That worries some economists, who fear that all the free-trade politicking will further erode an already beleaguered global trading system, and create a snowball effect of countermeasures. "I'm not going so far as to say this might aggravate something [as serious as the Great Depression], but I do say these FTAs are bringing about even greater complexity to an already complicated system, and increasing competition between nations in an unhealthy way."

It's no accident that the activity in the region has increased since 2004, which marked the beginning of a massive free-trade agreement between China and the Association of Southeast Asian Nations. Chinese policymakers had clear strategic priorities ...