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Korea needs 3-way free trade deal with Japan, China: official

Yonhap News, Korea

Korea needs 3-way free trade deal with Japan, China: official

3 March 2011

SEOUL, March 3 (Yonhap) — South Korea needs to sign a three-way free trade deal with Japan and China in a bid to boost prosperity in the Asian region and better prepare for external shocks, a senior finance ministry official said Thursday.

"Economic integration should be pursued to help the East Asian countries flexibly deal with global uncertainties and realize their co-prosperity in this region," Vice Finance Minister Yim Jong-yong said at an international conference here. "The first step toward the integration should be the discussion on an FTA among Korea, Japan and China."

He said that East Asian countries currently account for 21 percent of the global trade volume, marking the third-largest business block following the United States and the European Union (EU).

Trade among South Korea, Japan and China, however, remains relatively small, he noted, calling for more cooperation among the three nations not just to boost trade but also to better cope with a worldwide economic crisis.

South Korea has free trade agreements with Chile, Singapore and the European Free Trade Association, as well as similar pacts with the Association of Southeast Asian Nations and India.

Seoul and Washington signed a free trade accord in 2007, but it has yet to be ratified in either the U.S. or South Korean legislatures. It is also set to implement a free trade agreement with the EU in the near future.

The government has pushed for similar deals separately with China and Japan over the past years, but its efforts have been hampered by opposition from local industries and different negotiation positions. They remain in the preliminary phase for free trade deals.

During his meeting with reporters after the conference, Alejandro Jara, the Deputy Director-General of the World Trade Organization (WTO), praised South Korea’s pursuit of bilateral FTAs.

However, he noted that such issues as subsidies and anti-dumping duties can be resolved more efficiently through multilateral free trade deals, adding that this is the reason the long-delayed Doha Development Agenda should be finalized as soon as possible.

The official also expressed cautious optimism that the global trade liberalization talks, which kicked off in November 2001, could see "progress" throughout this year.

"I am cautiously optimistic that further work is done in Geneva and that we should be able to move to make progress throughout the rest of the year," he said, adding that the technical process has been completed and what is needed now is political will and commitment.