Japan under pressure for trilateral FTA after China-Korea FTA sealed

Want China TImes 2014-11-21

Japan under pressure for trilateral FTA after China-Korea FTA sealed

China and South Korea are set to complete negotiations on a bilateral free trade agreement (FTA) by the end of this year, which is expected to push Japan to step up the China-South Korea-Japan trilateral FTA negotiations, reports Shanghai’s China Business News.

China’s Ministry of Commerce spokesman Shen Danyang said on Nov. 18 at a regular press conference that the establishment of the China-S. Korea FTA will facilitate the integration of the two countries in regional value chains and help in the unification of economies in East Asia and Asia Pacific.

After five rounds of negotiations, certain progress has been achieved in the establishment of the China-Japan-Korea FTA, Shen added.

Tu Xinquan, a professor at the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said that compared with the China-Australia FTA, it will be more difficult to establish a China-Korea FTA and its impact will be bigger.

China and Australia have different trade advantages and are more suited to complement each other, while the industrial systems of China and Korea are different and could result in fierce competition.

The positive effects of the establishment of the China-Korea FTA will be more apparent in relation to FTAs between other countries, Ahn Hyunho, vice chairman of Korea International Trade Association, said in April in Beijing.

Among emerging countries, Korea is the one nation that has successfully avoided the middle-income trap, Ahn said, adding that China can learn from Korea on how to upgrade the structure of the manufacturing sector, conduct research and development, improve productivity and business independence, and stimulate domestic consumption and economic growth through the development of the services industry.

After the two countries have completed substantive negotiations on the bilateral FTA, it is expected to create a huge negative impact on Japan, an expert said.

China, Korea and Japan have undergone seven years of talks on a trilateral FTA and the three governments have carried out their respective feasibility studies. The key to pushing further negotiations lies in maintaining a balance of political power among the three countries, according to the expert.

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