SINGAPORE: China, Japan and South Korea will all benefit if they can get a three-way free trade agreement (FTA) across the line, but they will have to overcome serious challenges stemming from geopolitical tensions and other issues, experts say.
Talks for their FTA have stalled since 2019, but the elusive trade deal was cast into the spotlight again last Monday at a trilateral summit attended by Chinese Premier Li Qiang, Japanese Prime Minister Fumio Kishida and South Korean President Yoon Suk Yeol.
At the summit – the first in four years – the three leaders vowed to restart talks on the FTA.
China’s Mr Li called for South Korea and Japan “to deepen economic and trade connectivity, maintain the stability and smoothness of the industrial chain and supply chain, and resume and complete the negotiations of the China-Japan-South Korea FTA as soon as possible”.
Three days later on May 30, China’s Ministry of Commerce said it stood ready to speed up negotiations.
The Chinese side attaches great significance to talks on the FTA, which is expected to drive the steady recovery of the regional and even global economy, ministry spokesperson He Yadong said, as reported by state news agency Xinhua.
Korean President Yoon, meanwhile, said the three countries had “decided to create a transparent and predictable environment for trade and investment, and to establish a safe supply chain”.
At a trilateral business meeting held after the summit, business leaders agreed to establish a working group to conduct joint research on economic cooperation in the private sector.
BUILDING ON RCEP
The three countries have economic heft. They make up about 25 per cent of global gross domestic product (GDP) and have a combined yearly trading volume of over US$800 billion.
China is the largest trading partner of Japan and South Korea, while Japan and Korea are China’s fourth and fifth largest trading partners, respectively.
