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Complex factors behind three-way FTA: Chinese media

2012/05/15 23:11:46

Taipei, May 16 (CNA) Although the leaders of China, Japan and South Korea agreed to launch negotiations for a three-way free trade pact later this year when they met in Beijing Sunday, there are extremely complex factors that could weigh on the planned talks, a Chinese newspaper reported Tuesday.

According to the 21st Century Business Herald, after more than 10 years of development, South Korea has pushed ahead of Japan in terms of economic competitiveness. At the same time, growth in China-South Korea trade has far exceeded that of China-Japan trade or that of Japan-South Korea trade, it reported.

Against this backdrop, Japan has been hesitant to clinch a three-way free trade agreement (FTA), while South Korea obviously has a deliberate plan in mind, it said.

South Korea has already signed FTAs with the Association of Southeast Asian Nations and the United States, and "South Koreans see a China-Japan-Korea FTA as a pact that will follow the other FTAs that Seoul has inked. They feel that South Korea should use its FTA with the United States to increase its flexibility and competitiveness in the three-way trade zone," it added.

The combined populations of the three major Asian powers is around 1.5 billion, with an aggregate GDP of US$15 trillion, or 20 percent of the world's total.

The establishment of a trilateral FTA will help lay a foundation for the realization of a "great Asia-Pacific free trade zone," the Chinese newspaper said.

In addition, it pointed out, the United States has always been reluctant to see an integrated economic block forming in East Asia. "The United States does not really want to see the three countries build a genuine free trade platform in the region," it said.

The United States, along with the long-term geopolitical risks in East Asia are thus "the extremely complicated and strong factors" the three countries will need to overcome to proceed with the FTA negotiations, it contended.

Zhang Jianping, an official with China's National Development and Reform Commission, has commented that it will be difficult for the three countries to hold simultaneous FTA talks, as Japan has come under fierce pressure from its farmers. Chances of success will be better if China first conducts FTA talks with South Korea, he contends.

Shen Danyang, a spokesman for China's Ministry of Commerce, revealed Tuesday that China and South Korea already held bilateral FTA talks a day earlier, but he declined to comment on when three-way FTA negotiations might begin.

According to Shen, China-South Korea and China-Japan trade relations are equally important. China is equally open to either a trilateral FTA or a two-way FTA with Japan or South Korea, he noted.

Either a China-Japan or a China-South Korea FTA would form a significant segment of Northeast Asia's economic integration and would be complementary in nature, the spokesman said. "A China-South Korea FTA could serve as a cornerstone and provide greater momentum for an FTA among the three parties," he explained.

Meanwhile, Japan's Kyodo News reported that Chinese President Hu Jintao met with South Korean President Lee Myung-bak in Beijing Monday, but did not receive Japanese Prime Minister Yoshihiko Noda.

According to Kyodo News, the Japanese side had requested a meeting between Hu and Noda, but China rejected the proposal.

Citing political analysts, Kyodo News said a heated May 13 debate between Chinese Premier Wen Jiabao and Noda over the sovereignty of the disputed Tiaoyutai Islands (known as the Senkaku Islands in Japanese) in the East China Sea might have led to the subsequent development.

(By Flor Wang)