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China, Japan, Korea Continue Push For FTA, RCEP

by Mary Swire, Tax-News.com, Hong Kong

02 November 2015


South Korea, Japan, and China held the 10th Trilateral Economic Trade Ministers' Meeting on October 30 in Seoul and agreed to accelerate talks aimed at establishing a tripartite free trade agreement (CJKFTA) and also the Regional Comprehensive Economic Partnership (RCEP).

The three countries are involved in negotiations on both the CJKFTA and the RCEP. The latter involves the members of the Association of Southeast Asian Nations (comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and its six current FTA partners, China, Japan, South Korea, India, Australia, and New Zealand.

CJKFTA negotiations were launched in November 2012 and from the outset progress has been slow. The boost from the trade ministers towards the completion of an agreement could be timely, as no progress was reported out of the countries' eighth round of talks in Beijing in September this year.

The parties have discussed market access for goods, but there has been, as yet, no breakthrough. For example, they have been unable to agree an overall percentage of goods that could potentially be made exempt from import duties.

Market access has also been a problem in negotiations on the RCEP, the tenth round of which took place in South Korea from 12-16 October. The possible RCEP members had committed to reach a substantive agreement by the end of this year, but it is now expected to be delayed into 2016.

RCEP talks were bogged down earlier this year over the scale and timing of proposed cuts in import tariffs, particularly on sensitive products. However, the outline of an agreement has been reported, with duties to be eliminated on 65 percent of tariff lines immediately, rising to 85 percent of tariff lines in 10 years.

However, further talks will be necessary on the remaining 15 percent, covering the most sensitive items. India and Indonesia have also been given more time to make their detailed offers for tariff liberalization to other RCEP participants.

TAGS: tax | India | tariffs | trade treaty | China | agreements | Indonesia | Korea, South | import duty | trade | Japan

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