(MENAFN - Kuwait News Agency (KUNA)) Trade ministers from Japan, China and South Korea formally declared on Tuesday that negotiations will start early next year for a trilateral free trade agreement (FTA), Japan's Kyodo News Agency reported from Phnom Penh.
The announcement paves the way for the creation of a major trade bloc among the three Asian neighbors, which together account for about 20 percent of global gross domestic product. "The first meeting will be held early next year, " Japanese Economy, Trade and Industry Minister Yukio Edano, who represented Japan at the talks in the Cambodian capital, was quoted as telling reporters afterward.
The accord was reached in a meeting between Edano, Chinese Commerce Minister Chen Deming and South Korean Trade Minister Bark Tae-ho held on the margins of the East Asia Summit in Phnom Penh.
"There are various issues between Japan and China, Japan and South Korea, but they remain our valuable neighbors," Edano said, welcoming the fact that they were able to "make progress" on certain matters, referring to the latest FTA deal. Leaders of the three countries agreed in May during talks in Beijing to formally start talks by the end of the year on signing a three-way FTA.
Tariff elimination is expected to boost Japanese exports to China and South Korea, especially in the manufacturing sector, and to help shore up Japanese companies suffering from the strong yen.
However, Japan may ask for some items to be exempted from tariff elimination, assuming that exports of cheap Chinese rice to Japan are likely to increase if farm liberalization advances, sources close to the matter said.
Parallel to the trilateral FTA, leaders from the 10-member Association of Southeast Asian Nations and its six regional partners including Japan, China and South Korea are expected to announce the launch of negotiations for a region-wide FTA.