Asia investment pact could lead to free-trade talks
Wall St Journal | March 22, 2012
Asia investment pact could lead to free-trade talks
By KELLY OLSEN
TOKYO—Japan, South Korea and China have wrapped up a three-way investment treaty seen as an important stepping stone toward the far more ambitious goal of forging a free-trade zone among the Asian neighbors despite a history of tension and distrust that have hindered closer ties.
"The conclusion of the negotiations gives impetus to discussions over a free-trade agreement between Japan, China and South Korea," Japan’s Ministry of Economy, Trade and Industry said in a statement Thursday, adding that the three parties are seeking to sign the pact as early as possible.
Ministry officials suggested it would be signed in May at a three-way summit at which trilateral trade negotiations would be announced.
A free-trade agreement between the three countries would be a major achievement in bringing them closer together, and although it could take years to achieve, a senior ministry official pointed out that concluding an investment pact is one of the steps in that process.
The ministry statement indicated its positive take on the wider trade deal implications of the agreement, but gave no details of the actual deal itself.
East Asia’s three largest economies hope to announce the launch of negotiations toward forming the free-trade forum at a trilateral summit meeting to be held in China in May, where they are also likely to unveil the investment treaty, senior Japanese government officials said.
In the past few years, the three countries have been studying the possibility of creating a trilateral FTA at a joint panel composed of government officials and private-sector executives.
No bilateral free trade pacts exist between any of the three nations and contentious agricultural issues have long stalled efforts by Japan and South Korea to reach a bilateral free trade agreement.
Any attempt to achieve a three-way free-trade agreement would also have to overcome political distrust that often hampers the development of closer ties. The three sides, which enjoy booming trade with one another, are often at odds over historical and security issues as well as competing territorial claims. Tensions, especially between China and Japan but also between Japan and South Korea, occasionally boil over into a chill in political ties.
South Korea, which already has free-trade agreements with the United States, European Union, India and the Association of Southeast Asian Nations, hailed the investment treaty as the first economic-related agreement made among the three countries. Seoul’s Ministry of Foreign Affairs and Trade also said it expected the pact to boost investment activity by South Korean companies, according to a statement on its website.
China, which has overtaken Japan as the world’s second-largest economy, carried a brief statement on its Ministry of Commerce website saying the deal was under discussion.
—Yuka Hayashi in Tokyo, Min-Jeong Lee in Seoul and Aaron Back in Beijing contributed to this article.
