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China, Japan and South Korea have recently held successful negotiations in Beijing, at the end of which the text of a tripartite investment agreement was initialled.
While little detail has been provided on the issues covered within the agreement, a “real consensus” was said to have been reached and all three parties have said that they would look to complete their internal procedures as soon as possible, so that the agreement can be signed.
Apart from its aim of liberalizing and protecting foreign investors and cross-border capital flows, and improving intellectual property rights protection, the investment agreement is considered as providing an impetus to further cooperation between the three countries. In particular, it is hoped that it will be the forerunner of the long-discussed China-Japan-South Korea free trade agreement (CJKFTA).
It is suggested that the investment treaty will be signed at the next meeting of the countries’ leaders in May this year, at which time schedules and a roadmap for completion of the CJKFTA are expected to be arranged.
Agreement to begin non-governmental research on the CJKFTA was reached in 2002. A decision to begin a study on the FTA was taken in 2009, and its favourable completion was announced at the end of last year.
The study concluded that a trilateral FTA could remove bilateral and trilateral barriers to trade in goods, services and investment, thereby expanding the regional market and realizing a “win-win situation” for all of the countries. The combined economies of the three countries are said to account already for some 20% of global gross domestic product (and 17.7% of the world’s trade), but that the potential to be exploited by their economic integration could be significant.
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