Japan Eyes Separate FTA with China

Japan is considering whether to start separate free trade talks with China as prospects for a trilateral accord that includes Korea fade, the Kyodo news agency reported Thursday. Uncertainty over the results of the Korean presidential election in December is seen as a major stumbling block to trilateral FTA negotiations.

Trilateral FTA talks kicked off at Beijing's initiative in 2002 but soon stalled over conflict between China, which wanted to draw ASEAN member states in the deal, and Japan, which wanted to invite Australia, India, and New Zealand. But it seems Tokyo and Beijing now want to continue talks to suit their individual interests.

According to Kyodo, Japan will seek FTA talks with China, if Korea opposes the re-start of three-way negotiations during a trilateral summit in Beijing in mid-May. Japan was initially skeptical about an FTA with China "due to concerns that domestic agriculture could be ruined by cheaper imports" but now "views a deal as necessary to vie with Korea, which is also seeking to begin free-trade talks with China," the news agency speculated.

Tokyo "cannot postpone (trade) liberalization with China any longer," a Japanese government official was quoted as saying.

Japan is in a hurry because it has fallen behind in the global free-trade race due to reluctance to open its agricultural market. Japan decided to take part in the U.S.-led Trans-Pacific Partnership in November last year. It is also seeking to announce the start of FTA negotiations with the EU in June. China also seems ready to enter free-trade talks with Japan because it wants to hold the U.S. in check and take the lead in East Asia.

Korea is unworried because it has FTAs with the U.S. and the EU, the world's two largest economies, and will soon start separate FTA negotiations with China.

A senior official with the Ministry of Foreign Affairs and Trade said, "We agree in principle on the need for a trilateral FTA, but it doesn't make much sense to conduct trilateral talks and separate talks with China at the same time."