Amid Japan-China Political Deadlock, Progress Toward Freer Trade

[amoy]

Amid Japan-China Political Deadlock, Progress Toward Freer Trade - Forbes

On a much happier and more hopeful note, even as the doleful diplomatic drama was unfolding in Beijing, Japanese, Chinese, and South Korean diplomats were in Shanghai exchanging constructive sentiments and making positive proposals for a Japan-PRC-ROC Free Trade Agreement (FTA).

July 30 began the second session of negotiations for the proposed three country regional FTA. The inaugural session was held in Seoul in March. This session will end August 2. Japan's delegation leader, Gaimusho counselor Nagamine Yasumasa, proposed making Japan the venue for the third session, expected within the year.

A Japan-China-Korea FTA has the potential of producing huge rewards for the three economies. The parties appear to realize this and to be committed to maximizing benefits. But each also has its "sacred cows" and structural impediments.

As reported in the July 31 Nihon Keizai Shimbun, the current session is seeking agreement on principles and modalities for future negotiations. Specifics on sectors and products are being deferred to subsequent sessions.

Japan's Nagamine has taken the initiative to propose setting the objective of "zero tariff treatment for at least 90% of products within 10 years." For Japan a 90% free trade level would exceed the roughly 80% level of FTAs signed previously. The remaining 10% "protected zone" seems by Japan's calculations sufficient to cover its main sacred cow–agricultural products–particularly rice (current tariff 778%) and beef (38.5%).

Nagamine's demarche met resistance from Korea and, especially, China, who replied that the talks should avoid numerical targets, at least for now. For a China still levying "infant industry protection" duties of 25% on automobiles and 30% on televisions a 90% tariff free goal undoubtedly seems aggressive. China is proposing setting different goals for industrial and agricultural products. Korea is levying tariffs of 487% of edible soybeans and 50% on oranges.

Another key issue is tariff reduction or elimination implementation schedules. Japan and Korea seem in agreement that one schedule should be set and binding on all three parties. China is talking about making bilateral implementation schedules, allowing disparities between the parties.

China and South Korea began negotiating a bilateral FTA agreement in May 2012. Neither country is yet a party to the U.S.-sponsored Trans Pacific Partnership (TPP) free trade agreement negotiations, which Japan has recently formally joined.

 

[redragon]

This is not going to end well. China owns Japan a revenge, otherwise, I see no chance Japan will cooperate with China and bulding a eastern asian FTA.

 

[t_co]

This is not going to end well. China owns Japan a revenge, otherwise, I see no chance Japan will cooperate with China and bulding a eastern asian FTA.

Actually, it would end very well. Trade binds everyone together into mutual systems of leverage, and profit is the best salve for old wounds.

 

[no smoking]

This is not going to end well. China owns Japan a revenge, otherwise, I see no chance Japan will cooperate with China and bulding a eastern asian FTA.

Whether Japan wants or not, there will be a eastern asian FTA, being a part of it is better than being excluded from it.
Let's get straight, both Chinese and Japanese are progmatic. As long as we see the benefit of bening friends bigger than being enemy, Chinese will put revenge aside and Japanese will apologize.

 

[redragon]

Whether Japan wants or not, there will be a eastern asian FTA, being a part of it is better than being excluded from it.
Let's get straight, both Chinese and Japanese are progmatic. As long as we see the benefit of bening friends bigger than being enemy, Chinese will put revenge aside and Japanese will apologize.

Past history told us, even the leaders who have the most information still made mistake emotionally, I highly doubt what is going on between these 2 countries can be exceptional. China had a lot of good will gestures, but Japan seems only want to take advantage in stead of cooperating to build a postive circular.