Japan-South Korea tensions could dash China’s hopes for a trade deal
- Beijing sees trilateral agreement as important strategy against aggressive US policy
- But old and new disputes between its neighbours may prevent progress this year
Any escalation of the trade and political disputes between Japan and South Korea could jeopardise Beijing’s hopes of securing a trilateral trade deal with the two countries, observers say.
Kyodo news agency reported on Friday that Japan was preparing to remove South Korea from its so-called white list, which reduces trade restrictions between the two sides, as early as August 2. Once approved by the Tokyo government, South Korea’s new status would take effect within 21 days.
Meanwhile, according to South Korean media, Seoul has called off its talks to join the Japan-led 11 member Comprehensive and Progressive Trans-Pacific Partnership – successor to the failed Trans-Pacific Partnership and now the biggest trade bloc in the Asia-Pacific region.
The latest tensions – triggered by an unresolved dispute over Korean forced labour during Japan’s 1910-45 colonial rule of the Korean peninsula – are playing out against a backdrop of negotiations for yet another major trade deal, the Regional Comprehensive Economic Partnership (RCEP), due to wrap up in China on Wednesday.
The RCEP is a proposed 16-nation pact between the 10 members of the Association of Southeast Asian Nations (Asean) along with China, Japan, Australia, India, New Zealand and South Korea. Negotiations for the deal are expected to be completed by the end of the year.