South Korean President Lee Myung-bak, Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda agreed to begin negotiations on a free trade pact between the three largest economies in the Asian region, at a 2 day trilateral meeting in Beijing over the weekend. The leaders also discussed ways to ease political tensions in the area, particularly in relation to North Korea.
"The establishment of a free-trade area will unleash the economic vitality of our region and give a strong boost to economic integration in East Asia," said Chinese Premier Wen Jiabao.
The three leaders signed a trilateral investment agreement, which is seen as a stepping stone to a free-trade zone. China is the biggest trading partner of both Japan and South Korea, with trade between the countries increasing 6 fold in the past 10 years, according to a Chinese government report.
Mr Wen said that the decision on the FTA talks is a “crucial and strategic one” while Mr Noda called it a “big outcome” of the summit meeting.
Simon Tay, Chairman of SIIA welcomed the agreement saying, "the announcement that China Japan and South Korea will begin FTA negotiations is no surprise. It holds great potential not only for the 3 countries but also for a wider pan-Asian FTA. There will however be many challenges to get the FTA done, not only in the sensitive economic sectors but also because of the wider politics."
Unity over North Korea
In addition, the leaders expressed their unity in maintaining peace in the region, with Mr Wen, North Korea's closest ally saying that any further provocations from the country would be unacceptable.
North Korea conducted a failed rocket launch last month and there are fears it is preparing another nuclear test.
“We should throw away the Cold War-era way of thinking and address issues through dialogue," said Mr Wen, “We should have patience and good will. It is important to go back to the right track of dialogue and negotiations.”
Last week, the five permanent UN Security Council members, the US, Britain, China, Russia and France issued a joint statement urging Pyongyang to “refrain from further actions that may cause grave security concerns in the region, including any nuclear tests.”
China's position is important in limiting Pyongyang's threat in the region. The country is wary of the untested leadership of Kim Jong un, following the uncertainty after he assumed office in December 2011.
Uigher meeting causes controversy
Meanwhile, Chinese President Hu Jintao cancelled a meeting with Mr Noda after Japan allowed a general meeting of the World Uighur Congress to take place in Tokyo on Monday.
Ethnic Uighurs and their supporters from around the world are gathering in the Japanese capital
for a meeting aimed at pressing their claim for freedom from what Kadeer exiled leaders call intensifying crackdown.
"The situation is now worse than it was in 2009," when Uighurs demonstrated and clashed with the Chinese authorities, Exiled Uighur leader Rebiya Kadeer said.
Report: China, S Korea and Japan set to begin free trade talks (BBC News, 14 May 2012)
Report: South Korea, China, Japan agree to start official FTA talks (Jakarta Post, 14 May 2012)
Report: East Asia Nations Seek Regional Trading Pact (New York Times, 13 May 2012)
Report: Uighurs "face fight for existence" against China (CNA, 14 May 2012)