East Asian Powers Renew FTA, But Expert Asks ‘Will Xi Jinping Seal the Deal?’

• 11 June 2024
• Uncategorized
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Japan, South Korea, and China have revived efforts to strengthen commercial ties, seeking progress on stalled free trade agreement (FTA) negotiations during their first joint summit in over four years. The summit, held in Seoul early this week, marks a significant step in bolstering economic cooperation between the three nations. This information was published by Nikkei on 27 May 2024.

The revival of trilateral summits between the three economic giants, most recently held in Seoul, signifies a promising step towards a historic economic pact.  The FTA would be a game-changer, influencing not just the region’s economic map but potentially the entire global market.  This potential agreement boasts unique characteristics compared to others, such as the ASEAN FTA. Notably, all three nations are established economic powers and major exporters of heavy industry goods, all competing within the same global market.  However, the path to this agreement is not without hurdles.  Lingering historical conflicts and the complex geopolitical landscape, where each nation seeks to secure key trading partners, could pose significant challenges.

At the summit, South Korean President Yoon Suk Yeol hosted Chinese Premier Li Qiang and Japanese Prime Minister Fumio Kishida. The three leaders, none of whom were in office during the last trilateral summit in December 2019, emphasised the importance of “institutionalising” three-way cooperation by regularly holding trilateral summits and ministerial meetings. They agreed to speed up FTA negotiations, aiming for a “free, fair, comprehensive, high-quality, and mutually beneficial” agreement. Japan will host the next leaders’ meeting.

The FTA negotiations, which began in November 2012, were halted after the 16^th round in November 2019 due to trade frictions between the U.S. and China and the COVID-19 pandemic. China’s call for restarting the talks comes amid its weakening economy. Choo Jae-woo, a Chinese foreign policy expert at Kyunghee University in Seoul, noted that “Significant progress on the FTA would require President Xi Jinping’s involvement instead of Premier Li Qiang. Without Xi’s bargaining power, I don’t think we can expect any progress [toward an FTA].”

Encouragingly, the summit established various communication channels, particularly for young people, reflecting the nation’s recognition of the importance of enhancing mutual understanding and adopting a future-oriented approach.

Despite regional tensions, the summit aimed to address various issues, including climate change, public health, and science and technology cooperation. Yoon, as the summit host, emphasised the potential benefits of closer cooperation and highlighted the need to protect supply chains for key minerals and raw materials. The summit builds on Yoon’s efforts to improve relations with Japan since taking office two years ago, moving beyond historical tensions related to Japan’s colonial rule of the Korean Peninsula from 1910 to 1945.

• Economy and Finance