China, Japan and South Korea agree to launch a free trade area (FTA

Chinese Premier Wen Jiabao said Sunday that China, Japan and the Republic of Korea (ROK) agreed to launch the talks for a free trade area (FTA) within this year.

South Korea, China and Japan will likely announce an agreement to start negotiations on a trilateral free trade agreement this year when their leaders hold summit talks on Sunday, Seoul’s trade chief said on Tuesday.

Wen made the remarks at a press briefing after a trilateral leaders' meeting which was attended by Japanese Prime Minister Yoshihiko Noda and ROK President Lee Myung-bak.

Meeting with business editors of print and electronic media in Seoul, Trade Minister Bark Tae-ho said, “Our side agreed on the proposal.”

Calling the agreement as "an important strategic decision", Wen said the three nations should make concerted efforts for the early establishment of the FTA.

The idea for a three-nation free trade pact was raised about 10 years ago and has been studied by academics.

But it is widely viewed that the negotiations will be tough, as the three have to overcome a number of sensitive issues such as the opening of their farming sectors.

The three nations Sunday morning also clinched a deal to promote, facilitate and protect investment. Wen said it will serve as the first important legal document on trilateral cooperation in economic field.

Minister Bark also said the leaders of the three countries are expected to discuss the launch of negotiations among ASEAN and six countries, namely South Korea, China, Japan, Australia, New Zealand and India, for a regional free trade pact.

Senior officials from the six countries were invited to an ASEAN meeting scheduled for May 17 and 18 to discuss the expansion of the FTA scope, he added.

The issue of the regional FTA will likely be a topic for the ASEAN Plus Three summit in November, he said.

The move by South Korea, China and Japan comes after South Korea and China announced a plan to start official negotiations to conclude a bilateral FTA, stunning Japan, which is reportedly struggling to gain momentum in its push for FTAs with other countries.

He said the three nations promised to seriously implement the deal, so as to "create stable, fair and transparent environment for expanding mutual investment among the three countries, and further deepen economic integration."

The minister also said the nation’s fisheries industry, among other fields, would likely suffer the most in the wake of the free trade agreement while China’s automobile and petrochemical industries will be hit hard by the pact.

The first round of FTA talks between South Korea and China is scheduled to be held on May 14 in Beijing.

Trade experts in Seoul expect that an FTA with China, Seoul’s largest trading partner, would boost the Korean economy through increased trade.

Trade Minister Bark also introduced his Chinese counterpart Chen Deming’s prediction that the FTA with Korea was likely to be concluded within two years.

Bark said he expects concluding the free trade pact to take more than a year.