Business / Economy

Japan 'eager' to join trilateral FTA

By Ding Qingfen in Qingdao, Shandong (China Daily) Updated: 2012-05-26 09:14

Reversal in attitude after China and South Korea start bilateral talks

Japan is becoming increasingly "eager" to join a free trade agreement with China and South Korea while it is unable to join a broader Asian trade pact, and as Beijing and Seoul began negotiations on an agreement, said the Ministry of Commerce.

"Late last year, Japan was not very active regarding the trilateral FTA," said a high-level official from the ministry's Department of International Trade and Economic Affairs at a conference on the trilateral FTA feasibility study in Qingdao, Shandong province.

But after China and South Korea agreed to promote bilateral trade through a trade pact and Japan was still not allowed to join the Trans-Pacific Partnership, a trade initiative promoted by the United States, Tokyo became much more positive about a trilateral FTA this year, said the official, who declined to be named.

In mid-April, the leaders of China, Japan and South Korea agreed to start negotiations this year on an FTA.

The three nations are major economies in the Asia-Pacific region, and they together accounted for 19.6 percent of the global gross domestic product and 18.5 percent of exports in 2010, according to a feasibility study on the trade pact issued by the three governments last year.

Following academic research conducted from 2003 to 2009, which showed that a trilateral trade pact could create commercial benefits for all of the countries involved, leaders from the three nations in 2009 proposed conducting a joint study among their governments, industries and academics.

But even last December, when the feasibility study had wrapped up, Japan held a negative attitude toward the trade pact. "But we have seen a reversal in Japan's attitude from early this year," said the official.

Sources from the ministry told China Daily that Japan's change on the issue took place around April, when it found it would be hard to join the TPP in the short term.

Last November, Japan, Mexico and Canada expressed interest in joining the TPP, a trade liberalization initiative that has drawn in such countries as Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei. China and South Korea are not part of the proposed pact yet.

The US plans to finish talks on the TPP by the end of this year.

But many members of the US Congress are wary about allowing Japan, the world's third-largest economy, into negotiations on the pact. They have demanded stronger evidence that Japan is ready to open its market wider to the US in sectors ranging from agriculture to autos.

Late last month, US President Barack Obama expressed his support for Japan joining the talks on the TPP, but said a final decision had yet to be made.

Early last month, China and South Korea said they would start talks on a bilateral trade pact.

The China-South Korea FTA talks further encouraged Japan to decide to join a trade pact with its neighbors, said the official.

Japanese Prime Minister Yoshihiko Noda said early this month that Japan wanted to start negotiations on a trade pact with China and South Korea during their summit in Beijing in mid-May.

In May, the three nations also signed an investment agreement, described as the "first legal document on trilateral cooperation in the economic field".

But experts said the trilateral trade talks would be long and difficult because the three sides have commercial conflicts on a variety of issues in industries ranging from agriculture to services.

China has proposed Shandong province as its base for a regional economic cooperation zone.

Qingdao, a city in Shandong which gathers a large number of South Korean and Japanese companies, plans to set up an industrial zone for the three nations to improve their cooperation.

Chen Zhou, general director of the Department of Asian Affairs of the Ministry of Commerce, said at the forum on Friday that Qingdao should use the zone to develop cooperation in the marine, high-tech and green energy sectors.

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