F REIGN TRADE - 中国国际贸易促进委员会

Regional Trade & InvestmentBy Hu WenxiuASIA-PACIFICConsensus Outweighs Divergence on theChina-Japan-Korea Free Trade AreaOn May 13, heads from China, Japanand Korea held a 5th conference inBeijing, where they agreed to officiallylaunch talks within this yearon the China-Japan-Korea Free Trade Area(CJKFTA). The substantial achievement of theconference was the three countries’ signing ofthe Agreement on Promoting, Facilitating andProtecting Investments, which was the firstagreement on investments among these threecountries.Since 2007 when talks on an investmentagreement among China, Japan and Koreawere initiated, 13 rounds of official negotiationsand several unofficial consultations havebeen held over the past five years and the negotiationswere eventually rounded off in lateMarch. Some exporters have once commentedthat nearly 10 years had gone for initiatingthe CJKFTA negotiations and now time wasmature, which signals that Northeast Asia willstep out of the backwardness in regional economicintegration.The China-Japan-Korea InvestmentAgreement in total consists of 27 articles and 1additional protocol and it covers all the importantcontent that the international investmentagreement generally includes, including suchprovisions as investment definition, scope ofapplication, most-favored-nation treatment,national treatment, expropriation, transferring,subrogation, taxation, general exceptions anddispute settlement. The signing of the Sino-Japan-Korea Investment Agreement has landmarkimplications for the economic and tradecooperation among these three countries. Theinvestment agreement is the first legal documentand institutional arrangement for thesethree countries to boost and protect investments,which serves as an important basis forthe construction of the CJKFTA.The investment agreement, a significantoutcome of this year’s conference, was highlyvalued by the heads of the three countries andit was appreciated by the Chinese Premier Wen Jiabao as “animportant strategic decision”. The Japanese Prime MinisterYoshihiko Noda regarded the investment agreement as “a talkfor close Sino-Korea and Sino-Japan cooperation”. The KoreanPresident Lee Myung-bak held that the decision concluded atthis year’s conference “had profound implications for the future”.According to incomplete statistics, So far there are morethan 1,200 FTAs across the world, including 425 in 15 developedcountries and 775 in 67 developing countries. The influentialones include North American Free Trade Area (NAFTA),Free Trade Area of Americas (FTAA), Central EuropeanFree Trade Agreement (CEFTA), ASEAN Free Trade Area(AFTA), EU-Mexico Free Trade Area as well as China-ASE-AN Free Trade Area (CAFTA).If China, Japan and Korea can establish a free tradearea, advantages will be very obvious. Once the CJKFTA isestablished, covering a population of 1.5 billion and representing70% of the Asian economic aggregate, it will be the thirdlargest FTA only next to the North American FTA and theEU. The FTA will greatly promote intra trade and personnelexchanges among these three countries. Specifically, thesethree countries are highly complemented, as China is featuringlabor-intensive industries, while Japan and Korea are dominatedby technology-intensive industries. China’s industrial andcommercial enterprises are believed to benefit a lot from theFTA. The FTA will also become an important procedure forestablishing the East Asian FTA in future, which is good newsof great importance for the economic development of the entireEast Asia.Zhang Jiuheng, CPPCC Member and Former Director-General of the Asian Affairs Department of the Ministry ofForeign Affairs, and Director of the Asia-Pacific Studies Centerof China Foundation for International Studies, introducedto the reporter that as a matter of fact China, Japan and Koreahad spent as long as 10 years to prepare for initiating the FTAnegotiations. As early as 2002, the three countries had conductedfeasibility research on the FTA negotiations. Seven yearslater, the three countries drew a preliminary conclusion in early2009 that the establishment of the FTA would be conduciveto eliminate trade barriers, expand intra-regional market, driveregional economic development and to achieve a triple-win result.Therefore, the three countries resolved to push forward thejoint research on the CJKFTA participated in by the govern-54