China urges Japan, South Korea on free trade

[ahsingjai]

China urges Japan, South Korea on free trade - report
Wed May 4, 2005 03:56 AM ET
http://www.reuters.com/newsArticle.j...e=businessNews

TOKYO (Reuters) - China is urging Japan and South Korea to step up efforts toward a three-way free trade pact, a move some in Japan hope may help ease tensions between Tokyo and two of its major trading partners, a local newspaper said.

China is likely to propose soon that the three countries launch a new study group comprised of members from the government, academia and the business community to study issues related to a trade pact, the Nihon Keizai Shimbun said on Wednesday.

China is likely to make the proposal when foreign ministers of the three countries meet on Saturday in Kyoto on the sidelines of a meeting of Asian and European foreign ministers, Nihon Keizai said.

Some in the Japanese government are lukewarm toward the idea of a free trade deal due to concerns about its impact on domestic agriculture, but others think it may help Japan improve its recently frayed ties with China and South Korea, the newspaper said.

Relations between Japan and China deteriorated to their worst point in decades after sometimes-violent anti-Japanese protests in China in April.

Japan's dealings with South Korea, which it occupied from 1910-1945, have also been strained recently because of a dispute over two South Korean-held islands.

Japan has signed only two free trade pacts so far due partly to its reluctance to discuss politically sensitive farm products, but has stepped up negotiations in recent years as it is keen not to lose ground to China.

Japan is in talks with South Korea for a bilateral free trade pact, but has been reluctant to enter free trade talks with China despite increased economic links worth $212 billion in bilateral annual trade.

Japan has been aiming instead for an investment pact among Japan, China and South Korea that Japanese officials hope may improve the transparency of investment rules in China.

[YuheiCarreau]

Now that's just bizarre.

[SunWuKong]

they've been talking about getting together to talk about this for years now. i wish they'd actually make it happen.

[ahsingjai]

China already has a Free Trade zone with south east asian countries. I think they just working out the kinks in making it work without people throwing fist and crying foul when China exports ultra cheap products to their country.

[yoMAMA]

An East Asia+ASEAN free trade zone would be cool.

[VV o n g B a]

more chinese efforts to rachet down tensions. but regarding the post topic, this is what i think should have been chinese priority all along. i may be remembering incorrectly, but i think that farm products are a nationalist issue in japan w/ special interest farmers having a very disproportionately strong grip on politicians. if japan were to negotiate away those idiot protections on rice and whatnot, then farmer income would evaporate and their grip on power would similarly disappear. then maybe japanese would stop electing politicians that live to provoke china and korea.

[golden_buns]

Originally Posted by yoMAMA

An East Asia+ASEAN free trade zone would be cool.

Yeah, in theory it should bring a lot of benefits in terms of opportunity costs. But in practice, it'd be hell.

Right now the economy in Korea is a bit shaky and we just finally made out from the worst stages of the credit card bubble we were in last year, but the consumer debt ratio is still high as well as unemployment. If there was an FTA, it'd basically kill all farmers and manufacturing in Korea as well as in Japan.

I think an FTA would be favorable once our economies are stronger and there's room in other areas to shift the resources that would be affected the most (farming and manufacturing)