East Asian trade pact talks

The leaders of China, Japan and South Korea agreed on Sunday to launch talks on a free-trade area.

Speaking after a meeting with South Korean President Lee Myung-Bak and Japanese Prime Minister Yoshiko Noda in the Chinese capital, Beijing, Chinese Premier Wen Jiabao said closer regional cooperation would boost the economies of the entire region.

"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," Wen told reporters.

A free-trade area among northeast Asia's three major economies has been on the table for the past decade. In late 2002, they agreed to launch a feasibility study on the issue.

The study, issued last year, states that the three nations together accounted for 19.6 percent of the world economy and 18.5 percent of its exports in 2010. Combined, they have the world's largest economy ahead of the European Union, when measured by purchasing power parity.

Political differences

The three are also divided, however, by political distrust, trade barriers and divergent policies on investment.

Tokyo and Beijing are involved in a long-running row about territorial claims in the East China Sea. China is also under pressure from both Seoul and Tokyo to take a firm stance on North Korea's nuclear program.

"There are many instable, uncertain and unpredictable factors in northeast Asia and east Asia," Wen said at the meeting. "The international financial crisis is not yet over and the prospect of the European debt crisis is uncertain."

The three leaders also signed an investment agreement concluded earlier this year after five years of negotiations.

"To further facilitate mutual investment, it is important to have a legal framework. It will help our businesses and mutual investment," Lee said.

tj/msh (Reuters, AFP)