Japan, China, S.Korea trilateral free trade agreement

By sagarmedia on May 12, 2012 | Edit

The three nation meet in Beijing today marks the integration of three economical giants of East Asian countries to begin initiative for ealy FTA.This is to counter balance their trade deficit with developed nation,in this regards PM of Japan Noda said the European crisis can impact the world economy and poses the greatest risk of a downturn in the Japanese economy.
Japan, China, and South Korea leaders meet on an annual summit in Beijing on Sunday morning. They confirmed that the three nations will start talks on a trilateral free trade agreement within the year.
Japan’s Prime Minister Yoshihiko Noda said the Asia-Pacific region has factors of instability in security while seeing high growth.Noda called for a frank exchange of views to further promote trilateral cooperation, which has become a key item in the framework for regional peace and stability. Chinese Premier Wen Jiabao said their exchange of opinions is of great significance at a time when Northeast Asia faces many factors of instability and unpredictability. He apparently had the Korean Peninsula situation in mind.
South Korean President Lee Myung-bak told the meeting he is certain that strengthening cooperation among the 3 nations will lead to further growth and development of East Asia and the world economy.
The leaders confirmed their resolve to urge North Korea to refrain from carrying out another nuclear test and other acts of provocation.Leaders signed an investment treaty, the first trilateral legal framework in the economic field, underscoring closer cooperation among the three major East Asian nations.
Trade ministers from Japan, China and South Korea have called for starting negotiations on a trilateral free trade agreement by the end of the year.
Japan’s Economy, Trade and Industry Minister Yukio Edano, Chinese Commerce Minister Chen Deming and South Korea’s chief trade negotiator Bark Tae-ho made the call after meeting in Beijing on Saturday.
A statement says a free trade pact between the 3 countries will increase trade and investment and also lead to a framework for comprehensive cooperation.It calls for the countries to start domestic procedures and administrative talks to prepare for the start of the negotiations.The 3 ministers also agreed to start negotiations soon for economic cooperation involving up to 16 countries. They are the 10 members of the Association of Southeast Asian Nations plus Japan, China and South Korea as well as India, Australia and New Zealand.
Edano told reporters that he does not think the 3 countries will be able to conclude the FTA negotiations quickly. But he said Japan will make efforts to reach agreement as soon as possible.China and South Korea have already agreed to start talks for a bilateral FTA, which some observers describe as a setback for Japan. Saturday’s agreement appears to ensure that Japan is not left out.
Japan expects a boost in exports from the possible trilateral free trade agreement with China and South Korea.
As of 2010, their combined gross domestic product accounted for nearly 20 percent of the global total.
Japan’s exports to Western nations are falling while those to China and South Korea are increasing sharply. In 2010, Japan’s shipments to its 2 neighbors rose to nearly 30 percent of the country’s total exports.
Beijing and Seoul impose tariffs on many automobiles and liquid crystal panel parts produced in Japan. This means that if the 3 nations enforce their planned free trade agreement, Japan’s exports should grow.
Japanese government officials believe that deepening trilateral economic relations is a significant step in tapping growth in Asia, including China and South Korea.Japan does not levy tariffs on most of its imported industrial products. Therefore, the possible FTA may not lead to a big rise in shipments to Japan from China and South Korea.
China and South Korea have already agreed to open negotiations for a bilateral free trade accord, leaving Japan behind. The Saturday’s ministerial agreement to launch FTA talks between the 3 countries by the end of the year will help Tokyo catch up with Beijing and Seoul in its FTA strategy.Media agencies Inputs NHK