Japan, China and South Korea Start FTA Negotiation

Osaka - Sunday, December 11, 2011




Nikkei, Japanese leading newspaper specialized in business and economy, reported today that Japan, China and South Korea are to start negotiation to conclude a FTA (Free Trade Agreement) in summer 2012. The three countries plan to define the direction of the negotiation start kickoff in the joint study about FTA among the three countries next week, and to officially confirm in the summit among the three countries to be held in spring 2012.



They also plan to reach a substantive agreement on Investment Agreement including such topics as preservation of intellectual properties.



1. Why Japan decided to start the negotiation now?



In November Japan expressed its intention of joining the negotiation to become a member of TPP. According to the analysis of the Japanese government, China and South Korea have become more proactive in negotiating with Japan about the topic in this trend and thus would like to take the opportunity to move forward on the FTA negotiation with the two countries.



2. How will the FTA negotiation proceed?



The 7th meeting of joint study among industry, academia and public sector to discuss conclusion of FTA among the three countries will be held in Pyeongchang　December 14 – 16. It is anticipated that in the report to be announced on the last day a proposal to start the negotiation soon will be included, in addition to stance of each country regarding liberalization of trade and investment.



After the announcement of the report, governments of the three countries are to start drafting organization and schedule of the negotiation on the practical level. It is planned that in spring 2012 the official agreement discussion of the FTA is to be included in the summit agenda participated by the three countries to be held in China. The three countries aim to start the negotiation in summer 2012 to reach an agreement and sign smoothly and quickly.



3. What would be the focus of the negotiation?



It would be whether how cooperative the three countries can be to reach an agreement.



Japan would like to promote region scale economic alliance in Asia Pacific through Investment Agreement and FTA. China is rather reactive in lowering tariff of industrial products because they feel it would be a negative factor in developing the industry of their country.



In such a situation, it will not be easy for the three countries to reach an agreement. There are many hurdles to overcome regarding conditions even after the FTA negotiation started among the three countries.



4. What is the additional discussion planned between Japan and South Korea?



The Japanese government will also proceed simultaneously with negotiation to liberalize bi-lateral FTA with South Korea. The government started to coordinate to re-start in the first half of 2012 the negotiation of EPA (Economic Partnership Agreement) between Japan and South Korea that has been halted since 2004. This topic is planned to be included in the agenda of the meeting between Prime Minister Noda of Japan and President Lee Myung-bak of the Republic of Korea when the President visits Japan on December 17.



5. What is the plan of the Investment Agreement among the three countries?



It is anticipated that the substantive agreement is reached regarding the Investment Agreement among the three countries to deregulate investment from foreign capitals in the 14th meeting to be held on December 14. And then the leaders of the three countries are to sign the agreement in spring 2012 to make it effective by the end of 2012.



In the Investment Agreement, topics such as rules for intellectual property preservation and dispute settlement based on the International Law will be included. The agreement also aims to loosen the regulation of local content and technology transfer.





Resources:-

Japan, China and South Korea are to start negotiation to conclude FTA in summer 2012. The three countries plan to define the direction of the negotiation start in the joint study about FTA among the three countries next week, and to officially confirm in the summit among the three countries to be held in spring 2012. They also want to reach a substantive Investment Agreement including such topics as intellectual properties preservation.