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South Korea-Japan rift spills over into RCEP trade meeting

Kyodo

A widening rift between Japan and South Korea spilled over at a meeting of 16 mostly Asian countries negotiating the world’s largest free trade agreement Saturday, according to Japan’s representative.

After the one-day meeting of trade ministers chaired by China in Beijing, the members of the Regional Comprehensive Economic Partnership (RCEP) issued a joint statement stressing their aim to reach a deal by the end of this year.

At the negotiations, South Korean Trade Minister Myung Hee-yoo twice raised the issue of Tokyo’s removal of her country from a list of nations entitled to simplified export control procedures, according to Economy, Trade and Industry Minister Hiroshige Seko.

Speaking to reporters after the talks ended, Seko said it was “extremely regrettable” for Myung to broach the export controls matter at the venue, adding that her assertions “had no connection with the RCEP negotiations.”

He said he told Myung that Japan’s move did not violate World Trade Organization rules and that the two sides should focus on RCEP matters.

Although Seko held bilateral meetings with Australia, Singapore, China and Thailand, he said he did not do so with Myung because of time constraints while stressing that there are no current disagreements between the two neighbors regarding the RCEP.

In the joint statement, the members reaffirmed their resolve to “keep the momentum towards concluding negotiations within the year.”

They also welcomed the conclusion of negotiations on telecommunication, financial and professional services, and noted some of the remaining sections are also nearing conclusion, it said.

The statement said that the ministers will meet again in Bangkok in September.

At the opening ceremony, Chinese Vice Premier Hu Chunhua called for “an effort to be considerate of one another,” underscoring fears of a possible stagnation in negotiations, without naming names.

Hu said that the RCEP negotiations — also involving the 10-member Association of Southeast Asian Nations, Australia, China, India and New Zealand — are in the final stages, with agreements reached in 80 percent of the provisions.

But he also acknowledged that there are still disagreements regarding market access and rule-making including tariff reductions.

“From just an idea, RCEP is now becoming a reality. I want everyone to work hard with a strong political will toward reaching an agreement within this year,” Hu added, reiterating China’s commitment to the trade pact, which excludes the United States.

Amid an escalating trade war with the United States, China eyes the RCEP to lead market expansion and build stronger ties with ASEAN countries.

The RCEP talks began in 2013 and the initial goal was to wrap them up in 2015. But the deadline has been postponed repeatedly.

The delay reflects the challenge in creating what would be the world’s largest free trade area with so many negotiating members amid the rise of protectionism and tit-for-tat tariffs between the United States and China.

Japan decided Friday to revoke, from Aug. 28, South Korea’s preferential status as a trade partner for the purchase of products that could be diverted for military use, citing security reasons.

Seoul retaliated hours later, saying it would remove Japan from its own “white list” of countries entitled to receive preferential treatment.

Because the RCEP is guided by the ASEAN-style consensus-based approach, a bilateral disagreement between any member states can prevent the entire deal from moving forward.

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