3-nation trade talks to help ease Northeast Asia tensions

By Kim Young-jin

Dialogue over regional trade pacts may be the best solution to ease political tensions gripping Northeast Asia, experts said Wednesday.

Disagreements have flared among Seoul, Tokyo and Beijing in recent months over maritime territory, raising concerns that the spats will continue to affect their economies.

Trade talks may be “the only way to reinitiate a cooperative atmosphere,” said Ahn Duk-geun, professor of international trade law and policy at Seoul National University. “All these dilemmas cannot be solved politically so we must find another way to start dialogue and that’s where economic issues are very important.”

The question is when, according to Ahn, adding that economic concerns are increasing the need for talks. On Tuesday, Seoul announced it would let an expanded currency swap with Tokyo expire amid a row over the eastern islets of Dokdo.

The spat, which began when President Lee Myung-bak visited the area in August, has Korean businesses concerned about a drop in tourism from its neighbor and has seen a drop in Japanese car sales here.

The rancorous debate between Beijing and Tokyo over a disputed archipelago in the East China Sea prompted nationalist sentiment in each country leading to falling Japanese cars sales in China.

Claude Barfield, resident scholar at the American Enterprise Institute said trade has, within limits, a “kind of role to assuage or mute conflict.”

During a forum hosted by the Asan Institute for Policy Studies also attended by expert Ahn, Barfield took the example of the falling Japanese car sales. “There are more close links now (between the sides). That hurts those companies, but it will also hurt China’s workers. It’s all interconnecting,” he said.

The three countries are expected to launch trilateral free trade talks in the future. Seoul is currently discussing a bilateral free trade agreement with Beijing but talks with Tokyo have been stalled since late 2004 over Japanese reluctance to lower tariffs on agricultural items.

The trade issue has other implications as well, as Washington attempts to push a Trans-Pacific Partnership, a pact being discussed by 11 nations that is seen as part of the U.S. pivot to Asia.

Analysts say Seoul is likely to consider joining as a nod to its main ally but worry that the move might irk China, which may be concerned over Washington’s efforts to shape its rise.

Ahn went as far as to suggest that free trade talks between North and South Korea were not out of the question as the region seeks to reign in the nuclear-armed neighbor. All three presidential contenders here have said they would seek dialogue with Pyongyang if elected.

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