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FTA will help ease tensions

By Li Jiabao in Weihai, Shandong, and Zhao Yinan in Tianjin | China Daily | Updated: 2013-06-19 01:37

Pact among East Asian giants can bring more than economic benefits

The free trade talks involving China, Japan and South Korea must be accelerated to help ease political tensions and meet challenges from other FTAs, officials said on Tuesday.

"Whatever the political relations, the FTA will go on as the three sides pursue win-win-win results and mutual economic benefits," Shin Bong-kil, secretary-general of the Trilateral Cooperation Secretariat, told China Daily.

The secretariat was established on Sept 1, 2011, to promote peace and common prosperity among the three countries.

Negotiators had their first round of talks on a free trade agreement in Seoul in March despite turbulent political relations in East Asia. Once established, the FTA will forge a common market of 1.5 billion people with a combined GDP of $15 trillion to become the world's third-largest regional market, following the North American FTA and the European Union.

Yu Jianhua, China's deputy international trade negotiator at the Ministry of Commerce, said at a seminar in Weihai, Shandong province, on Tuesday that the second round of negotiations will be held at the end of July in Shanghai and the third will be held in Japan at the end of this year.

The FTA will act as a stepping stone for economic integration in East Asia, he said.

Shin noted that relations among the three countries are undergoing turbulence and political tensions, but upon economic interdependency there is "a growing demand for a free, open and rule-based multilateral trading system to boost the economic welfare of the three countries".

Zhuang Rui, deputy dean of the Institute of International Economy at the University of International Business and Economics in Beijing, said, "The FTA talks are vulnerable to political turbulence but the essence and orientation will not change."

The three major economies in East Asia are aiming at a comprehensive and high-level agreement, covering not only trade in goods, services and investment, but also areas such as intellectual property, transparency, e-commerce and environment, said Woo Tae-hee, assistant minister for trade of South Korea.

"How to properly handle sensitive areas will be the challenge and difficulty for future negotiations and will demand great efforts to overcome domestic obstacles," Yu said.

Experts and academics said earlier that these obstacles may include agriculture, manufacturing and state sectors.

"Strong confidence and a down-to-earth approach for advancing the negotiations are key for the success of the trilateral FTA, while the three parties should come up with flexible negotiation plans with long-term and strategic vision," Yu said.

Shin said strong political will and adherence to a win-win-win result are essential to the success of consensus building in sensitive areas.

In addition to political tensions and obstacles from sensitive areas in each country, the FTA is also subject to pressure from other trade agreements.

Before the start of the G8 summit in Lough Erne, Northern Ireland, the EU and the United States on Monday launched formal negotiations on a vast trade pact, which could be the biggest bilateral deal in history, and the first round of negotiations would take place in Washington next month.

"The trade pact between the EU and the US will boost trade between the two and hence challenge China's trade competitiveness," said Zhuang from the University of International Business and Economics.

Exporters in Japan and South Korea will also be affected as the EU and the US are the final destinations for many Japanese and South Korean exports, even though they are manufactured in China, she said.

The FTA involving China, Japan and South Korea will probably be concluded after the Trans-Pacific Partnership Agreement — the US-led trade pact in the Asia Pacific region — which is set to be finished at the end of this year, according to Shin. China and South Korea are not covered by the TPP.

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