China, Japan, South Korea begin talks on free-trade pact

Leaders from China, Japan and South Korea agreed to begin talks for a three-way free trade pact after signing a mutual investment treaty at a summit in Beijing on Sunday, Reuters reported. The agreement could greatly boost economic activity among the countries, which together accounted for 19.6% of global GDP and 18.5% of global exports in 2010. A free-trade pact could boost China’s GDP by up to 2.9%, Japan’s by 0.5% and South Korea’s by 3.1%, said a Xinhua commentary, without citing sources. However, the talks are likely to be drawn out and difficult; the idea of the three-way pact has been discussed for over a decade, but the countries are split by trade barriers, diverging investment policies and political distrust. The treaty would also have to vie for attention with the Trans-Pacific Partnership, a US-led trade liberalization initiative that involves Japan but not China or South Korea.