The Trilateral FTA: A Pillar of Trilateral Cooperation and East Asia Economic Integration

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1 The Trilateral FTA: A Pillar of Trilateral Cooperation and East Asia Economic Integration (TUE) North-East Asia Forum on Trade and Transport Facilitation 1

2 CONTENTS 1. Significance of Trilateral Economic Cooperation and Trilateral FTA 2. Progress of Trilateral FTA 3. Ongoing Trilateral Economic Cooperation 4. The Role of TCS and Conclusion 2

3 1. Significance of Trilateral Economic Cooperation 3

4 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 4

5 Foreign Reserves (2011) China 30% R ussia O thers 43.3% 5% India 3% Jap an 12% Brazil 3% RO K 3% 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. 5

6 For China, Japan and ROK are the 2nd and the 3rd largest trading partners during

7 For Japan, China and ROK are the 1st and the 3rd largest trading partners during

8 For ROK, China and Japan are the 1st and the 2nd largest trading partners during

9 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 9

10 10

11 2. Progress of Trilateral FTA 11

12 1. Bilateral FTAs among the three countries 2. Asian Financial Crisis and the Birth of Trilateral Cooperation 3. Launch of the Trilateral Joint Research 12

13 2004 Trade Ministers of China and the ROK agreed to launch a joint study by private research institutions Joint Study by private research institutions (DRC and KIEP) China-ROK FTA Joint Study Group composed of representatives from government, business and academia The two Trade Ministers signed the Memorandum on the conclusion of the Joint Study Group Joint Ministerial Statement on the Launch Of Korea-China FTA Negotiation rounds of the official negotiations and still in progress 13

14 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 Joint Study by private research institutions (IDE and KIEP) Japan-Korea FTA Joint Study Group composed of representatives from government, business and academia rounds of the official negotiations Negotiations Suspended Working level consultations for the resumption of the negotiations 14

15 Business circles as well as academia of both countries had expressed desire for China-Japan FTA Chinese Vice Premier Wu Yi highlighted the importance of starting the process of China-Japan FTA on the occasion of the 21 st Century Urban Development Forum in May 2005 in Nagoya, Japan 15

16 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

17 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 17

18 Major Findings of the Trilateral Joint Research ( ) Trilateral 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%) Trilateral FTA gained broad-based support from enterprises in the three countries. Trade liberalization will be the biggest contributing factor to overall welfare gains by expanding the regional market and optimizing resource allocation Trilateral 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. Trilateral FTA would raise the competitiveness of service sectors by introducing competition. There are obstacles to Trilateral FTA such as the existence of sensitive sectors, historical issues and lack of Northeast Asia community spirit. 18

19 Joint Study Committee for Trilateral FTA composed of Government Officials and Participants from Business and Academic Fields Major Points of the Joint Study Report ( ) Trilateral FTA will expand trilateral and bilateral trade and investment among them Trilateral FTA will strengthen relations among the three countries, and contribute to making progress in the ongoing process of economic integration in East Asia Trilateral 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 The three countries should make efforts to address the sensitivities of each country in the entire negotiation process 19

20 : The 5 th Trilateral Summit agreed on the Launch of Official Negotiations on the Trilateral FTA within year

21 st Preliminary Working-level Consultations on the Trilateral FTA in Tokyo 2nd Preliminary Working-level Consultations on the Trilateral FTA in Qingdao 3rd Preliminary Working-level Consultations on the Trilateral FTA in Seoul 2012 Launch of the Trilateral FTA Negotiation 21

22 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 22

23 Regional Perspectives R C E P ASEAN India CJK Cambodia Laos Myanmar Indonesia Philippines Thailand Singapore, Brunei, Malaysia, Vietnam China Japan ROK Australia, New Zealand TPP USA, Peru, Chile, Canada, Mexico 23

24 3. Ongoing Trilateral Economic Cooperation 24

25 Aim at achieving quick efficient flow of logistics information between the three countries and to jointly carry out related researches 25

26 AEO Mutual Recognition In order to facilitate effective customs control, the three countries established working group to compare their AEO programs 26

27 Northeast Asia Standards Cooperation Forum (NEAS Forum) Aim at promoting the development of international standards and harmonization of standards among the three countries. 27

28 Emerging Cooperative Areas 1. Energy Cooperation Sustainable Development Energy Security 2. Industry Cooperation ICT Biology (Medicine, Agriculture, Ocean) Sophisticated techniques (robot, space, new materials) 28

29 4. Conclusion and the Role of TCS 29

30 Promote the Trilateral Cooperation 30

31 Support the process of Trilateral FTA 31

32 32

33 Thank You 33

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