Trade cooperation 'remains the best choice'

China, Japan and South Korea have "no choice but to cooperate", despite maritime tensions, said the Japanese deputy head of a body overseeing landmark trade talks.

"The three nations have no choice but to cooperate. They can benefit from cooperation, and the whole region can benefit," Rui Matsukawa, deputy secretary-general of the Trilateral Cooperation Secretariat, said in Seoul, where the secretariat is based.

Each country has a representative on the secretariat, which operates under a two-year rotating leadership.

The three governments announced in May that they would launch talks on a free trade agreement before the end of the year.

While there were fears that these would be suspended following tension in the East China Sea, the talks started as scheduled, in late November.

"I believe that people in these countries need to realize the importance of cooperation, and they need to support it," Matsukawa said.

"As neighboring nations, we cannot move and the geography cannot be changed," she said.

The three nations are major trade partners and together accounted for 20 percent of global gross domestic product and 18.5 percent of global exports in 2010, according to the feasibility study issued by the three governments on the potential free-trade pact.

The FTA will be a "major pillar for cooperation," Matsukawa said.

According to the study, China is the biggest trade partner for both Japan and South Korea. A free-trade treaty could lift China's GDP by 2.9 percentage points, Japan's by 0.5 of a percentage point, and South Korea's by 3.1 percentage points.

"These three are the key countries in East Asia. The FTA would have a significant impact on them and Asia, not only in the economic field, but also in tourism and people-to-people exchanges," said Matsukawa.

Japan also agreed to launch trade talks with the European Union and proposed to join the Trans-Pacific Partnership, the US-led talks on a free trade pact of 11 countries in the Asia-Pacific region. These would probably overshadow and prolong the trilateral trade talks, experts said.

But Matsukawa said "the FTA talks need to be done as early as possible".

"If it takes too much time, it is meaningless, because the economic situation could have changed."

The challenges, according to Matsukawa, are the sensitive areas in the trade pact talks. Agriculture, for example, is a prime concern for Japan and South Korea. The iron and chemical industries are a major concern for China.

"All three countries have their own sensitive areas. ⋯ I think negotiators can overcome these difficulties," she said.

While the European debt crisis spreads further and US economic growth stalls, the world is looking for trade opportunities within the Asia-Pacific region.

Other groupings are emerging.

China, Japan, South Korea, India and 12 other countries, including six members of the TPP talks, also formally launched negotiations on a separate Asia-Pacific free trade agreement, known as the Regional Comprehensive Economic Partnership. But this does not include the US.

In May, China and South Korea also agreed to initiate their own FTA talks.

Those trade talks "seem to be overlapping'', but they help the economies in Asia by discussing issues that may need to be addressed, Matsukawa said.