The leaders of China, Japan and South Korea announced today that they would begin negotiations to set up a free-trade area to promote trade and investment among the three countries, the New York Times reported.
It’s the first time the three countries have declared their intention to establish a free-trade accord, according to the New York Times. The talks are expected to begin this year.
China, Japan and South Korea are three of Asia’s four biggest economies and have a total market of more than 1.5 billion people, Bloomberg News reported.
Trade among the three countries totaled $690 billion in 2011, according to a Chinese government report, Bloomberg News reported. The report said China is Japan and South Korea’s largest trading partner, and Japan and South Korea are China’s fourth- and sixth-largest trading partners, respectively, according to the New York Times.
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"The free-trade agreement will unleash economic vitality of the region and boost economic integration," Chinese Premier Wen Jiabao said at a news conference in Beijing with Japan's Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak, the Wall Street Journal reported.
Japanese Prime Minister Yoshihiko Noda said trilateral cooperation is needed if the Asia-Pacific region is to be the growth center of the world, Bloomberg News reported.
There will likely be some resistance in each country to the idea of a free-trade area, Wang Shenshen, an economist at Okasan Securities Co. in Tokyo, told Bloomberg News before the announcement. Chinese manufacturers may push back against an influx of goods from South Korea and Japan, and South Korea’s agriculture industry may have problems with a free-trade agreement, Wang noted. “It won’t be smooth sailing to reach a final deal,” she said.
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