The Yomiuri Shimbun, Japan

China urges movement on trilateral FTA

8 May 2005

China called on Japan and South Korea on Saturday to expedite a trilateral study on a possible three-way free trade agreement, Japanese officials said.

Beijing’s proposal was conveyed by Chinese Foreign Minister Li Zhaoxing to his Japanese and South Korean counterparts, Nobutaka Machimura and Ban Ki Moon, during a meeting on the sidelines of an Asia-Europe meeting in Kyoto, the officials said.

Tokyo, Beijing and Seoul embarked on a joint study regarding a possible trilateral free trade agreement in 2001, involving government-affiliated research institutes.

The three countries are now expected to consider involving government officials in the joint study, according to the officials.

While an FTA with China and South Korea likely will help alleviate soured relations between Japan and its two neighbors, the future of the study remains uncertain in the face of trade and investment hurdles.

China is believed to be keen to conclude an FTA with Japan and South Korea, not only to give further momentum to its rapidly developing economy, but also to forge a regional economic alliance in East Asia to better cope with market integration in Europe and North America.

However, a senior Economy, Trade and Industry Ministry official said, "China must improve its own rules governing inbound investment first."

Other officials pointed out that piracy of foreign products and theft of intellectual property remain rampant in China, even though it is now a signatory to the World Trade Organization.

Japan has a domestic issue of its own—safeguarding the agricultural sector—that has made Tokyo less than enthusiastic about negotiating an early conclusion to an FTA. Talks on a separate FTA with South Korea have been at a stalemate since November.