PHNOM PENH – Trade ministers from Japan, China and South Korea have formally declared that negotiations will start early next year over a trilateral free-trade agreement, setting aside territorial clashes to focus on potential economic benefits.
The announcement Tuesday paves the way for the creation of a major trading bloc among the three Asian neighbors, which together account for about 20 percent of global economic output.
According to the Foreign Ministry, a preliminary meeting will be held in Japan in February, and the inaugural meeting for the negotiations will take place in South Korea around late March to early April.
The accord was reached in a meeting between trade minister Yukio Edano, Chinese Commerce Minister Chen Deming and South Korean Trade Minister Bark Tae Ho on the margins of the East Asia Summit in Phnom Penh.
“There are various issues between Japan and China, Japan and South Korea, but they remain valuable neighbors,” Edano told reporters afterward, welcoming the fact that the three sides were able to “make progress” on certain FTA-related matters.
Edano expressed his hope that moving forward on the FTA would help ease political tensions that have been heightened by Tokyo’s rifts with Beijing over the Senkakus and with Seoul over the Takeshima Islands.
During talks in Beijing in May, the leaders of the three countries agreed to formally start talks by year’s end on signing a three-way trade deal. Working-level consultations on the FTA ensued through September even though Japan effectively nationalized the Senkaku islets, enraging Beijing.
Relations between Tokyo and Seoul, meanwhile, have been strained since South Korean President Lee Myung Bak’s trip in August to one of the Seoul-controlled Takeshima islets in the Sea of Japan.
Tariff elimination would boost Japan’s exports to both China and South Korea, especially in the manufacturing sector, and help shore up Japanese companies suffering from the strong yen. However, Japan may seek to retain tariffs on some items, fearing a flood of cheap Chinese rice if farm liberalization advances.