Despite the diplomatic tensions over disputed islands in the East China Sea, trilateral talks between China, Japan and South Korea on setting up a Northeast Asia free-trade agreement (FTA) are continuing. The second round of working talks among officials from the three countries was held this week in Qingdao. The goal remains to start the formal negotiations on the agreement by the end of this year.
As is always the case with free trade agreements there are plenty of potential pitfalls ahead as domestic vested interests rear their heads. One example is Japan’s farmers who have stalled a mooted bilateral deal between Tokyo and Seoul for almost a decade. But Tokyo won’t want to be cut out if Seoul and Beijing complete their proposed bilateral deal. Nor will Beijing want to do anything to drive Tokyo towards the Washington-led TransPacific Partnership.
The three countries are already closely tied by trade and investment as well as physical proximity. No matter how rough the diplomatic waters between the three get, all have an interest in plainer sailing on trade.