Trilateral Trade Talks Resume Between China, Japan, and South Korea
Trade negotiations between China, Japan, and South Korea resumed from 22-23 March, nearly one year after officials held their previous round. The three countries are also part of a broader effort to clinch a 16-country regional trade deal, which is vying for conclusion this year.
The conference between senior officials was held in Seoul, South Korea, and was headed by China’s Vice Minister of Commerce Wang Shouwen, Japan’s Deputy Minister for Foreign Affairs Yamazaki Kazuyuki, and South Korea’s Deputy Minister for Trade and Investment Kim Young-sam.
Talks for a free trade agreement (FTA) between the three countries began in November 2012 at the 21st Association of Southeast Asian Nations (ASEAN) conference. Since then, meetings have been held in rotation between the three countries. Together, the large Asian economies make up one-fifth of the world’s total GDP.
Increasing trade and investment flows across the board is another key objective of the negotiations, particularly given these countries’ major roles in the wider regional and global economy, as well as the potential to link up value chains. Throughout the 13 negotiating rounds held to date, frequent topics of discussion have included trade in goods and services and investment, according to the Ministry of Foreign Affairs of Japan.
During the latest exchange, officials focused particularly on services, including financial services, as well as telecommunications, according to a press release Issued by China’s Ministry of Commerce (MOFCOM).
“[The ministers] agreed that concluding the negotiations of China-Japan-South Korea FTA as soon as possible accords with the three parties’ interests, [and] is of great importance to deepen regional economic cooperation and realise the trade and investment liberalisation and facilitation in East Asia,” said the MOFCOM statement.
The timeframe for inking a trade accord, however, remains unclear. Several political issues have reportedly challenged trade negotiators’ efforts to move the accord forward, such as unrelated territorial disputes, and meetings have been held sporadically in recent years, compared to the various rounds held annually after the talks first kicked off in 2012.
South Korea and China already have a bilateral agreement between them, which took effect in December 2015. That deal involved successive tariff cuts aimed at eliminating duties on over 90 percent of each sides’ tariff lines, along with covering topics such as e-commerce, services trade, and public procurement. Officials held talks in Seoul last week on the next phase of the bilateral pact, given the objective of undertaking additional negotiations involving services and investment that would build on existing commitments.
Regional economic dynamics
Following the Asian financial crisis in the 1990s, China, Japan, and South Korea began cooperating more closely with ASEAN, joining forces with the 10-country coalition to form ASEAN Plus Three (APT, or ASEAN+3) in 1997 in a bid to “foster East Asian regionalism.” In addition to economic collaboration, the group also works together on social issues, energy, agriculture, tourism, and a host of other subjects of mutual interest.
To deepen this partnership, trade talks were launched at the same conference that saw the formal beginning of the Regional Comprehensive Economic Partnership (RCEP) negotiating process, featuring those three countries, as well as Australia, India, New Zealand, and the Association of Southeast Asian Nations. (See Bridges Weekly, 21 November 2012; 3 August 2017)
A deal between the 16 RCEP nations would comprise more than three billion people and account for approximately 30 percent of world trade, according to an ASEAN factsheet.
Leaders from that group have also said that finalising these talks could help counter the current pushback against globalisation that has grown in prominence in recent years, along with shoring up economic growth and political ties in the region.
“We noted that, despite the recent global economic slowdown, rising protectionism, and anti-globalisation sentiments, our economies have remained resilient and continued to grow apace relative to the rest of the world. We acknowledged the valuable contribution of trade openness and regional economic integration which cushion the region from the more volatile global macroeconomic environment, allowing us to maintain our robust economic performance,” RCEP leaders said late last year.
RCEP ministers met last month, noting that while their commitment to the project remains strong, differences remain on various key issues.
“The ministers underscored the immense potentials of an RCEP agreement to not only enhance economic growth, provide more jobs and improve the livelihood of people in the RCEP region in an inclusive way, but also contribute significantly to the growth of global trade,” according to the ministers’ joint press release.
“There is still a lot to do but it’s possible to finish by this year,” an unnamed ASEAN official told Kyodo News this month. While RCEP negotiators are due to reconvene in April and June, ahead of another July ministerial, the timing for the next trilateral meet for China, South Korea, and Japan has not yet been announced, though China has been confirmed as host.
ICTSD reporting; “South Korea, China, Japan hold 13th round of FTA talks,” ARIRANG NEWS, 22 March 2018; “After delay, RCEP leaders resolve to wrap up pact in 2018,” NIKKEI ASIAN REVIEW, 14 November 2017; “RCEP negotiators make progress in Singapore as Japan pushes for year-end deal on trade pact,” JAPAN TIMES, 4 March 2018; “S. Korea, China, Japan hold new trade talks amid rising protectionism,” YONHAP NEWS AGENCY, 23 March 2018; “China-Japan-Korea Free Trade Agreement: A Road to Asian Economic Integration,” INTERNATIONAL AFFAIRS REVIEW, 1 March 2017; “China-Japan-South Korea Hold FTA Talks Despite Political Tension,” THE DIPLOMAT, 5 March 2014.