BEIJING – Trade minister Yukio Edano and his counterparts from China and South Korea agreed Saturday to begin negotiations on a trilateral free-trade agreement by year’s end, and a related accord is expected to be signed Sunday.
Meanwhile, Prime Minister Yoshihiko Noda flew out of Japan later in the day for a trilateral summit in Beijing on Sunday, where he will discuss the plan with Chinese Premier Wen Jiabao and South Korean President Lee Myung Bak.
“We agreed to propose to the leaders’ summit that (the three countries) should start FTA negotiations by the end of the year,” Edano said after meeting with Chinese Commerce Minister Chen Deming and South Korean Trade Minister Bark Tae Ho in Beijing.
“We have high hopes that (Noda, Wen and Lee) will accept the proposal at their summit,” Edano said.
“We also decided to launch working-level consultations (on the proposed trade pact),” added Edano, who held separate talks with Chen and Bark on the sidelines of the meeting.
As a first step toward the envisioned FTA, the three trade ministers on Sunday will sign a trilateral investment pact that would establish a system to facilitate the resolution of trade disputes and bolster the protection of intellectual property, measures that will facilitate cross-border trade and investment.
It would be the first such accord among the three countries, which together generate nearly 20 percent of global gross domestic product.
But a trilateral FTA would prove considerably more lucrative, if realized.
According figures quoted by the trade ministry, such a deal would increase Japan’s GDP by 0.3 percent, China’s by 0.4 percent and South Korea’s by 2.8 percent.
“Along with our geographical proximity, the three countries’s economic strength and trade volumes will have a big impact on promoting” trade and investment in the Asia-Pacific region, Edano said Friday in Tokyo, before departing for Beijing.
China, Japan and South Korea accounted for a combined 19.6 percent of global gross domestic product and 17.5 percent of world trade by value in 2010, International Monetary Fund data show.
While Tokyo and Beijing were reportedly keen to announce the immediate launch of FTA talks at the leaders’ summit, Seoul has previously expressed hesitancy about moving forward at such speed.
But senior officials believe the three leaders will be able to agree to begin negotiations by year’s end.
South Korea’s reluctance has been in part due to its strong interest in advancing bilateral FTA talks with China, fearing it has more to lose than to gain if its trade with Japan becomes more liberalized.
At their summit, Noda, Wen and Lee are also expected to address escalating tensions on the Korean Peninsula amid concern that Pyongyang is preparing another nuclear test.