Korea, China, Japan – East Asia FTA Negotiations to Commence

It has been reported in local news outlets that China, Japan and Korea have vowed to commence free trade negotiations and cooperate in alleviating the issues with North Korea.

Korea’s Yonhap News has reported, in part, that:

During annual summit talks in Beijing, South Korean President Lee Myung-bak, Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda also agreed to start preparations to launch official negotiations on a three-way free trade agreement by the end of the year.

The summit came a month after North Korea unsuccessfully launched a long-range rocket on April 13. Though the rocket fizzled soon after takeoff, the liftoff drew international condemnation as it broke a U.N. ban adopted over concerns such a launch could be used to develop missiles capable of carrying nuclear warheads.

Concerns have since grown that Pyongyang could stage additional provocations, such as a nuclear test, which would be its third, as well as more missile tests and border clashes. Officials in Seoul have said the North appears to have completed preparations for a nuclear test.

“The leaders of the three countries appreciated the U.N. Security Council’s strong and swift presidential statement regarding North Korea’s long-range rocket launch and agreed that they cannot accept a nuclear test and other additional provocations by North Korea,” the presidential office said.

The agreement on North Korea was seen as rare because the three countries have usually differed over how to deal with North Korea, with South Korea and Japan calling for a tougher stance, and China, the North’s last-remaining major ally, being reluctant to criticize Pyongyang.

On the sidelines of the summit, the three countries also signed an investment guarantee treaty that calls for providing most-favored-nation status and other protective measures for investment from each other. The pact is the first economic treaty between the three countries.

The three countries also agreed to begin preparations to launch free trade negotiations before year’s end. The envisioned pact, if realized, would create one of the world’s largest markets as South Korea, China and Japan account for 20 percent of the global gross domestic product (GDP) and 17.5 percent of all global trade.

The sides have carried out non-governmental academic research on the trilateral FTA since 2003.

The three countries also signed two other cooperation agreements, one of them on agricultural cooperation and the other on preventing desertification of forests and protecting wildlife.

After the trilateral session, the leaders attended a lunch meeting of business leaders.

Later in the day, Lee planned to hold a one-on-one summit with Wen, which is expected to include discussions on North Korea and free trade 

The full article may be found at Korea, Japan and China Agree to Work Together on N. Korea, FTA
We suspect that an FTA will not be forthcoming until, at least, until a couple of more years. 
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Sean Hayes, IPG’s Co-Chair of the Korea Practice Team, may be contacted at: SeanHayes@ipglegal.com

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