The Trilateral FTA: The Trilateral FTA:

A Pillar of Trilateral Cooperation A Pillar of Trilateral Cooperation

and East Asia Economic Integrationand East Asia Economic Integration

2012.10.23 (TUE)2012.10.23 (TUE)

NorthNorth--East Asia Forum on Trade and Transport FacilitationEast Asia Forum on Trade and Transport Facilitation

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CONTENTSCONTENTS

1.1. Significance of Trilateral Economic Significance of Trilateral Economic

Cooperation and Trilateral FTACooperation and Trilateral FTA

2.2. Progress of Trilateral FTA Progress of Trilateral FTA

3.3. Ongoing Trilateral Economic CooperationOngoing Trilateral Economic Cooperation

4.4. The Role of TCS and ConclusionThe Role of TCS and Conclusion

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1.1. Significance of Trilateral Economic Significance of Trilateral Economic

CooperationCooperation

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• China (2nd), Japan (3rd) , ROK (15th) combined GDP accounts for 20% of the

world GDP.

• Their combined population makes up almost 22% of the world population

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• China (1st), Japan (2nd) , ROK (7th) combined foreign reserves make

up almost 50% of the world’s total

• China, Japan and ROK account for 18% of World’s Trade.

ChinaChinaChinaChina

30%30%30%30%

Russia5%India

3%

R O KR O KR O KR O K

3%3%3%3%

Brazil

3%

JJJJap anap anap anap an12%12%12%12%O thers

43.3%

Foreign Reserves (2011)

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• For China, Japan and ROK are the 2nd and the 3rd largest

trading partners during 2011

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• For Japan, China and ROK are the 1st and the 3rd largest

trading partners during 2011

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• For ROK, China and Japan are the 1st and the 2nd largest

trading partners during 2011

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• The shares of intra-regional trade in total trade of Japan and ROK have

been increasing while that of china has been steadily decreasing.

• Intra-regional trade levels were much lower than those of EU and NAFTA

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2.2. Progress of Trilateral FTA Progress of Trilateral FTA

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1. Bilateral FTAs among the three countries

2. Asian Financial Crisis and the Birth of Trilateral

Cooperation

3. Launch of the Trilateral Joint Research

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2004Trade Ministers of China and the ROK agreed to launch a joint study

by private research institutions

2005-2006 Joint Study by private research institutions (DRC and KIEP)

2007-2010China-ROK FTA Joint Study Group composed of representatives from

government, business and academia

2010.5The two Trade Ministers signed the Memorandum on the conclusion

of the Joint Study Group

2012.5Joint Ministerial Statement on the Launch Of Korea-China FTA

Negotiation

2012.5 - 3 rounds of the official negotiations and still in progress

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1998

Prime Minister Obuchi of Japan and President Kim Dae-joong of the

Republic of Korea agreed to reinforce economic partnership between

the two countries

1998-2000 Joint Study by private research institutions (IDE and KIEP)

2002-2003Japan-Korea FTA Joint Study Group composed of representatives

from government, business and academia

2003-2004 6 rounds of the official negotiations

2004 - Negotiations Suspended

2008-2011 Working level consultations for the resumption of the negotiations

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-- 2005Business circles as well as academia of both countries had expressed

desire for China-Japan FTA

2005.5

Chinese Vice Premier Wu Yi highlighted the importance of starting the

process of China-Japan FTA on the occasion of the 21st Century

Urban Development Forum in May 2005 in Nagoya, Japan

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• At the 1st trilateral summit in

Manila in 1999, the three

leaders agreed upon trilateral

joint research on economic

cooperation among the three

countries, which President Kim

had proposed.

• The Joint Research on Trade

Facilitation and Investment was

launched in 2000 by the

research institutions of the

three countries 16

• At the trilateral summit in

November 2002 in Phnom Penh,

the leaders of the three countries

agreed on the launch of a new

research on Trilateral FTA, which

Chinese Premier Zhu Rongji

suggested.

• In 2003, the research institutions

of the three countries embarked

upon the new phase of the joint

research on Trilateral FTA

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Major Findings of the Trilateral Joint Research (2003-2009)

1Trilateral FTA will generate positive macro-economic effects for all the

three countries by increasing their GDPs (China 0.4%, Japan 0.3%, ROK

2.8%)

2Trilateral FTA gained broad-based support from enterprises in the three

countries.

3Trade liberalization will be the biggest contributing factor to overall welfare

gains by expanding the regional market and optimizing resource allocation

4Trilateral FTA would give some impacts on agriculture and fishery sectors.

However, it could serve as a good opportunity to reform those sectors and

prepare for global integration in agricultural trade.

5Trilateral FTA would raise the competitiveness of service sectors by

introducing competition.

6There are obstacles to Trilateral FTA such as the existence of sensitive

sectors, historical issues and lack of Northeast Asia community spirit.

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Joint Study Committee for Trilateral FTA composed of Government

Officials and Participants from Business and Academic Fields

Major Points of the Joint Study Report (2011.12.16)

1Trilateral FTA will expand trilateral and bilateral trade and investment among

them

2Trilateral FTA will strengthen relations among the three countries, and

contribute to making progress in the ongoing process of economic

integration in East Asia

3Trilateral FTA will benefit to all the three countries by realizing more fully the

complementarities in the trilateral economic relationship and by eliminating

trade and investment barriers

4The three countries should make efforts to address the sensitivities of each

country in the entire negotiation process

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2012.05 : The 5th Trilateral Summit agreed on the Launch of

Official Negotiations on the Trilateral FTA within year 201220

2012.61st Preliminary Working-level Consultations on the Trilateral FTA in

Tokyo

2012.82nd Preliminary Working-level Consultations on the Trilateral FTA in

Qingdao

2012.93rd Preliminary Working-level Consultations on the Trilateral FTA in

Seoul

2012 Launch of the Trilateral FTA Negotiation

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• Sensitive Sectors

– China – petroleum and chemicals; automobiles; machinery and

electronics; iron and steel; ship building

– Japan – food products and beverages; apparel; textiles

– ROK – textiles; consumer goods; electrical and electronics

equipments; non-ferrous metal; food products and beverages; apparel

• Modality

– Common tariff concession

– Rules of origin

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• Regional Perspectives

R C E P

ASEAN

Cambodia

Laos

Myanmar

Indonesia

Philippines

Thailand

Singapore, Brunei,

Malaysia, Vietnam

Japan

ROKChina

USA, Peru, Chile,

Canada, MexicoAustralia,

New Zealand

CJK

TPP

India

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3.3. Ongoing Trilateral Economic CooperationOngoing Trilateral Economic Cooperation

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• Aim at achieving quick efficient flow of logistics information between the three

countries and to jointly carry out related researches 25

AEO Mutual Recognition

• In order to facilitate effective customs control, the three countries established

working group to compare their AEO programs

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Northeast Asia Standards Cooperation Forum

(NEAS Forum)

• Aim at promoting the development of international standards and harmonization of

standards among the three countries.27

Emerging Cooperative Areas

1. Energy Cooperation

� Sustainable Development

� Energy Security

2. Industry Cooperation

� ICT

� Biology (Medicine, Agriculture, Ocean)

� Sophisticated techniques (robot, space, new materials)

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4.4. Conclusion and the Role of TCSConclusion and the Role of TCS

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Promote the Trilateral Cooperation

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Support the process of Trilateral FTA

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Thank YouThank You

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