Wang Wentao Stresses "Swift Resumption of Negotiations"
Korea and China Aim to Accelerate Phase 2 FTA, Japan Remains Cautious
China has repeatedly expressed its intention to resume negotiations on a Korea-China-Japan Free Trade Agreement (FTA), pushing for the restoration of economic cooperation in Northeast Asia. However, due to changes in U.S. trade policy, Japan's continued wariness toward China, and the complex interests among the three countries, expectations for substantial progress remain cautious.
According to the Ministry of Commerce of China on November 4, Minister Wang Wentao held talks with Minister Kim Jeongkwan of the Ministry of Trade, Industry and Energy on November 1 on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meeting in Gyeongju. During the meeting, Wang proposed, "Let us work towards the swift resumption of Korea-China-Japan FTA negotiations."
Minister Wang emphasized, "We must strengthen cooperation under the frameworks of the World Trade Organization (WTO) and the Regional Comprehensive Economic Partnership (RCEP), and jointly safeguard free trade and multilateralism."
Minister Kim responded, "Korea hopes to accelerate progress in the second phase of Korea-China FTA negotiations together with China, and to continuously deepen regional and multilateral cooperation."
The two countries agreed to activate cooperation channels to ensure a stable supply of key minerals, including rare earth elements, and to expand mutual investment, focusing on the Saemangeum and Yantai industrial cooperation complexes.
China also demonstrated a more proactive stance at the Korea-China-Japan Economic and Trade Ministers' Meeting held in Seoul in March this year. At that time, Minister Wang Wentao stated, "The three countries should resume FTA discussions to promote joint market openness and supply chain stability," directly placing the Korea-China-Japan FTA on the agenda.
This is seen as an attempt to shift the direction of FTA talks, which have been stalled for more than a decade since negotiations began in 2012. In particular, analysts note that, amid the strengthening of U.S. protectionism and the deepening of Korea-U.S.-Japan cooperation, China is strategically seeking to regain its position in the trade environment through trilateral cooperation.
Experts point out that since Korea, China, and Japan are already members of RCEP, the actual additional effects of a trilateral FTA could be limited.
China has expanded domestic production to supply goods that were previously exported by Korea and Japan, resulting in reduced trade benefits for Korea and Japan in their trade with China.
Alicia Garcia-Herrero, Chief Economist at Natixis, said, "Given the current trade structure, the Korea-China-Japan FTA may not be advantageous for Korea and Japan," adding, "It is possible that the disadvantages could outweigh the benefits."
However, Lian Degui, a professor at Shanghai International Studies University, predicted, "Japan may not be entirely passive about cooperation," and said, "Even if trilateral negotiations are not smooth, sharing common economic goals makes the outlook optimistic in the medium to long term."
China is not limiting itself to simple FTA discussions, but is also working to restore multi-layered economic channels, such as supply chain cooperation and trade remedy consultations. In this Korea-China ministerial meeting, both sides agreed to operate a supply chain 'hotline' to strengthen prior consultations before trade restriction measures are implemented, and to establish a joint response system to ensure stable supplies of strategic resources such as rare earth elements.
Minister Wang Wentao proposed to Minister Kim Jeongkwan, "Let us discuss bilateral trade cooperation measures during your visit to China in the near future," to which Minister Kim replied, "I will actively consider it."
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