China, Japan and South Korea will hold the first round of meetings early next year on a free-trade agreement vital to an Asia-wide deal, even as they spar over disputed islands.
The negotiations of those countries, which represent three of Asia's four biggest economies, are vital to the Regional Comprehensive Economic Partnership, a 16-nation accord announced on Tuesday.
Southeast Asian countries have called the partnership "the world's biggest regional free-trade deal".
John Ravenhill, a professor at the Australian National University, said: "The missing piece of the jigsaw puzzle as far as Asia is concerned is the agreement among the three Northeast Asian countries.
"The negotiations that were supposed to have started between those three countries have been put on hold because of the disputes over the South China Sea and other islands."
Trade discussions proceeded even as China's territorial disputes surfaced at five days of meetings in Cambodia hosted by the Association of Southeast Asian Nations.
Premier Wen Jiabao downplayed the disputes on Tuesday and urged leaders to focus on maintaining the peace and stability that had underpinned Asia's economic growth since the second world war, according to Vice-Foreign Minister Fu Ying. China has been Asean's largest trading partner since 2009.
"We do not want to give overemphasis to the territorial disputes and the differences," Fu said. "We do not think it's a good idea to spread the sense of tension in this region."
Competing visions for an Asia-Pacific trade bloc reflect the struggle for dominance by economic powers over a region that is increasingly a driver of global growth. US President Barack Obama is seeking to expand trade ties with Asian nations and regain economic influence among countries that are growing more reliant on China in an area that contains sea lanes vital to world commerce.
Last week, US Secretary of State Hillary Rodham Clinton welcomed China and other Asian nations to join the 11-country Trans-Pacific Partnership, which the United States aims to combine with other regional trade agreements to transform global commerce.
Ben Rhodes, the White House deputy national security adviser, said Thailand and Japan were interested in joining the talks.
Southeast Asia is growing more reliant on trade with China, which is a gateway for shipments to advanced economies, according to the Organisation for Economic Co-operation and Development. The Regional Comprehensive Economic Partnership includes China, Japan, India, South Korea, Australia and New Zealand, an area with more than three billion people representing about a quarter of the world economy. The 16 countries were looking to complete negotiations by 2015, Singapore's trade minister, Lim Hng Kiang, told The Straits Times last week.
Trans-Pacific Partnership countries aimed to wrap up the pact by next October, Australian Prime Minister Julia Gillard said. Her country is one of six involved in both sets of trade talks.
Craig Emerson, Australia's trade minister, said: "We now look like we're going to have two pathways to the one destination, a Free Trade Area of Asia and the Pacific. This is very heartening, and if one set of negotiations lends momentum to the other set of negotiations, that is all good and that is entirely possible."
The US describes the Trans-Pacific Partnership as a "21st century" agreement that seeks to uphold labour rights, reform state-owned enterprises and instil stricter protections for patents in addition to tackling traditional issues such as tariffs and market access. The Trans-Pacific Partnership would be the first trade deal negotiated by the Obama administration and would be the biggest for the US since the North American Free Trade Agreement. With the Regional Comprehensive Economic Partnership, Asean is trying to create an economic zone modelled after the European Union by the end of 2015, said Termsak Chalermpalanupap of the Institute of Southeast Asian Studies in Singapore.