Japan, China, S. Korea aim to conclude investment talks in Nov.

Friday October 14, 2005

Japan, China, S. Korea aim to conclude investment talks in Nov.

(Kyodo) - Japan, China and South Korea agreed Friday they will aim to conclude in late November talks to explore a trilateral legal framework for investment, as they failed to do so during the latest meeting in Tokyo, Japanese officials said.

The three countries, which launched governmental talks in May on investment rules and a mechanism for a better business environment, will try to wrap up their discussions and release their conclusions in a report in the upcoming meeting in China, the officials said.

The report, if issued, will be forwarded to leaders of the three Asian economies during their meeting scheduled for mid-December in Malaysia. The top officials are then expected to decide whether the trio will kick off formal negotiations to seal a trilateral investment pact, they said.

During the latest three-day talks in Tokyo, which ended Friday, negotiators from the three countries examined how extensive the proposed legal framework for investment should be, in an attempt to cement a common understanding on the pact, the officials said.

Each of the three has bilateral investment rules with the other two. An investment pact between Japan and South Korea came into effect in 2003, but their accords with China are rather old —having entered into force between Japan and China in 1989 and between South Korea and China in 1992.

Japanese officials pointed out that the two countries’ outdated investment pacts are intended to protect Chinese businesses. The proposed new rules should remove barriers to foreign investments in China, they said.

During the talks, China was rather negative about requests from Japan and South Korea on three points — to strengthen measures to protect intellectual property rights, stop setting certain conditions for foreign investments and enhance its transparency in rules, they said.

China was also reluctant to include the principle of treating domestic and foreign firms equally in future talks on the legal framework for investment, the officials indicated.

As for business facilitation measures, China asked Japan to improve its one-stop services in offering investment information, they said.

At the talks, the Japanese delegation was headed by Satoru Sato and Seiichi Nagatsuka, deputy directors general of economic affairs and trade policy at the Foreign Ministry and the Economy, Trade and Industry Ministry, respectively.

Sun Peng, deputy director general of the Chinese Commerce Ministry’s Foreign Investment Administration Department, and Chun Bee Ho, deputy director general of the South Korean Foreign Affairs and Trade Ministry’s Bilateral Trade Bureau, each headed their respective delegation.

With investments among the three countries expanding, there has been mounting pressure from businesses on the governments to set up the trilateral legal framework, Japanese officials said.

The trio has also been studying the possibility of launching a free trade agreement. The investment rules are considered to be a stepping stone to the FTA, they said.

source: Kyodo