Leaders at Beijing summit agree to talks on regional free trade pact
Source: Agencies |
May 14, 2012, Monday
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China, Japan and South Korea yesterday agreed to launch negotiations this year for a three-way free trade pact that they say could help fend off global economic chills.
The three nations are major traders, and together accounted for 19.6 percent of global gross domestic product and 18.5 percent of exports in 2010, according to a trade pact feasibility study issued by their governments last year.
"Northeast Asia is the most economically vibrant region in the world," Premier Wen Jiabao told reporters after a summit in Beijing with Japanese Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak.
"The establishment of an FTA will unleash the economic vitality of our region and give a strong boost to economic integration in east Asia."
Calling the agreement "an important strategic decision," Wen said the three nations should make concerted efforts for the early establishment of the FTA.
China is the biggest trade partner of Japan and South Korea. A free trade treaty could lift China's GDP by up to 2.9 percent, Japan's by 0.5 percent, and South Korea's by 3.1 percent, Xinhua news agency said in a commentary.
The proposed treaty will vie for attention with the United States' push for a broader Trans-Pacific Partnership, a trade liberalization initiative that has drawn in nine countries, with Japan also expressing interest, according to Reuters news agency. China and South Korea are not part of those negotiations yet.
At the Beijing summit, the three leaders also agreed a three-way investment treaty - a stepping stone to the bigger goal of a free trade deal. China's Ministry of Commerce said on its website (www.mofcom.gov.cn) that the investment agreement will help smooth tax, dispute resolution and other issues among the three nations.
"Japan, South Korea and China play an important role in the global economic recovery," said South Korea's President Lee. "When the economy is in crisis, it's more pressing to set up a free trade zone," he told a business meeting held alongside the summit.
China acknowledged that negotiations on a three-way trade agreement won't be easy.
"The conclusion of the feasibility study in 2011 and the near finalization of the three-way investment treaty has paved the way for launching the FTA talks, but that only marks one step forward along a long negotiation journey," Xinhua said. "More importantly, political trust is badly needed in this sensitive region, not only in political affairs but also in economic ties."
Wen said the three sides were generally far more "complementary than competitive."
Referring to the Trans-Pacific Partnership, Japan's Prime Minister Noda said he saw no conflict between the two.
"We will promote the TPP and the trilateral FTA in parallel," Noda told reporters. "These efforts can be mutually reinforcing to each other."
Meanwhile, the three nations agreed to deepen fiscal and financial cooperation and promote the development of Asian bond markets.
The three countries will also expand cooperation in the field of sustainable development while accelerating the construction of pilot bases for the recycling economy, Wen said.
China has proposed setting up a pilot zone for economic cooperation at local level between the three countries in its eastern Shandong Province, which is near South Korea and Japan and, thus, has a geographical advantage, Wen said.
It is suggested that bases for trilateral industrial cooperation should be established in Japan and the South Korea, Wen said.
"After 13 years of unremitting efforts, China-Japan-South Korea cooperation stands at a new starting point in history," said Wen.
The three nations are major traders, and together accounted for 19.6 percent of global gross domestic product and 18.5 percent of exports in 2010, according to a trade pact feasibility study issued by their governments last year.
"Northeast Asia is the most economically vibrant region in the world," Premier Wen Jiabao told reporters after a summit in Beijing with Japanese Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak.
"The establishment of an FTA will unleash the economic vitality of our region and give a strong boost to economic integration in east Asia."
Calling the agreement "an important strategic decision," Wen said the three nations should make concerted efforts for the early establishment of the FTA.
China is the biggest trade partner of Japan and South Korea. A free trade treaty could lift China's GDP by up to 2.9 percent, Japan's by 0.5 percent, and South Korea's by 3.1 percent, Xinhua news agency said in a commentary.
The proposed treaty will vie for attention with the United States' push for a broader Trans-Pacific Partnership, a trade liberalization initiative that has drawn in nine countries, with Japan also expressing interest, according to Reuters news agency. China and South Korea are not part of those negotiations yet.
At the Beijing summit, the three leaders also agreed a three-way investment treaty - a stepping stone to the bigger goal of a free trade deal. China's Ministry of Commerce said on its website (www.mofcom.gov.cn) that the investment agreement will help smooth tax, dispute resolution and other issues among the three nations.
"Japan, South Korea and China play an important role in the global economic recovery," said South Korea's President Lee. "When the economy is in crisis, it's more pressing to set up a free trade zone," he told a business meeting held alongside the summit.
China acknowledged that negotiations on a three-way trade agreement won't be easy.
"The conclusion of the feasibility study in 2011 and the near finalization of the three-way investment treaty has paved the way for launching the FTA talks, but that only marks one step forward along a long negotiation journey," Xinhua said. "More importantly, political trust is badly needed in this sensitive region, not only in political affairs but also in economic ties."
Wen said the three sides were generally far more "complementary than competitive."
Referring to the Trans-Pacific Partnership, Japan's Prime Minister Noda said he saw no conflict between the two.
"We will promote the TPP and the trilateral FTA in parallel," Noda told reporters. "These efforts can be mutually reinforcing to each other."
Meanwhile, the three nations agreed to deepen fiscal and financial cooperation and promote the development of Asian bond markets.
The three countries will also expand cooperation in the field of sustainable development while accelerating the construction of pilot bases for the recycling economy, Wen said.
China has proposed setting up a pilot zone for economic cooperation at local level between the three countries in its eastern Shandong Province, which is near South Korea and Japan and, thus, has a geographical advantage, Wen said.
It is suggested that bases for trilateral industrial cooperation should be established in Japan and the South Korea, Wen said.
"After 13 years of unremitting efforts, China-Japan-South Korea cooperation stands at a new starting point in history," said Wen.
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