Talks on 16-nation Asian free trade zone to open next year

Talks on 16-nation Asian free trade zone to open next year. November. 20, 2012 22:37. ryu@donga.com.

Negotiations to forge the proposed Regional Comprehensive Economic Partnership will start next year in the quest to form a free trade zone encompassing 16 countries in the Asia-Pacific region, including Korea, China and Japan.

Attending the East Asia Summit in Phnom Penh, Cambodia on Tuesday, 15 heads of state including Korean President Lee Myung-bank and Chinese Premier Wen Jiabao declared the opening of the talks on the partnership.

The partnership is a type of free trade agreement aimed at lifting all tariff barriers in the 16 countries, which are the 10 member states of the Association of Southeast Asian Nations, Korea, China, Japan, Australia, New Zealand and India. If the trade bloc is formed, the ensuing free trade area will cover 3.4 billion people in the Asian-Pacific region, 10.13 trillion U.S. dollars in combined trade volume, and 19.76 trillion dollars in nominal GDP. In nominal GDP, the bloc will exceed the European Union with 17.5 trillion dollars.

Korea expects the partnership to help expand Korean exports to the Asia-Pacific region, forecasting a positive effect on the economy. The Korea Institute of International Economic Policy estimated that the trade zone will generate 20 trillion won (18.5 billion dollars) in cumulative economic effect over a 10-year period after the signing.

President Lee told the meeting “Economic integration at the regional level will not only expand trade and investment, but also ease political conflict and contribute to regional peace and stability by enhancing cooperation in diverse fields.” He and other leaders also adopted a joint summit declaration on opening negotiations on the partnership early next year with the aim of signing an agreement by 2015.