China is renewing efforts toward concluding a free trade agreement with South Korea and Japan in an apparent attempt to erode US influence in the region by forming a framework encompassing the three Northeast Asian economic powers in its favor.
During his visit to Seoul and Tokyo last week, Chinese Foreign Minister Wang Yi raised the need to make an active push for the trilateral FTA. Negotiations on the envisioned deal among the three countries have made little progress since kicking off in 2013.
Beijing’s refocus on the three-way accord appears to be in line with its strategy for coping with US President-elect Joe Biden’s professed plan to work with America’s democratic allies to reassert its global leadership and keep China’s growing assertiveness in check.
China took the lead in the Nov. 15 signing of the Regional Comprehensive Economic Partnership agreement, which also involves South Korea, Japan, Australia, New Zealand and the 10 member states of the Association of Southeast Asian Nations.
China seems to be seeking the three-way deal on top of RCEP with the aim to further exclude the US from the multilateral trading system in the Asia-Pacific region.
The US is party to neither RCEP nor another major trade pact grouping 11 Pacific Rim countries, called the Comprehensive and Progressive Trans-Pacific Partnership. At a virtual regional summit held five days after the signing of RCEP, Chinese President Xi Jinping said his country would give favorable consideration to joining the 11-member CPTPP.
In a meeting with top ruling party officials during his latest visit here, Wang said the envisioned trade deal involving South Korea, China and Japan could enable the three countries to forge economic partnership at a higher level than RCEP.
On-again, off-again negotiations on the three-way accord have stalled due to differences over the extent of market opening and bilateral diplomatic spats.
Beijing’s move to revive the momentum of the talks is unlikely to result in removing such barriers to the conclusion of the deal.
The creation of a free trade zone grouping the three nations, which account for nearly a quarter of global gross domestic product, may help bolster their economies struggling to cope with the fallout from the coronavirus pandemic.
But the problem is that their manufacturing-oriented economies are not so complementary, and engage in intensifying competition in key areas such as semiconductors, automobiles and steel.
Prolonged disputes among the three countries over historical and territorial issues can hardly be expected to be resolved or put on the back burner to avoid compounding trade negotiations.
Bilateral ties between Seoul and Tokyo have been strained over matters related to Japan’s 1910-45 colonial rule of the Korean Peninsula. Beijing and Tokyo have been embroiled in a long-standing dispute over islands claimed by both sides in the East China Sea.
South Korea and Japan will also have to consider Washington’s wariness of its two key Asian allies getting closer to Beijing. The Biden administration will certainly want Seoul and Tokyo to support its resolve not to let China write rules for regional and global trade.
After meeting with Wang last week, Moon Chung-in, special foreign policy adviser to President Moon Jae-in, called for a regional economic community in Northeast Asia, striking a tone similar to China’s stance.
Seoul needs to first focus on getting in step with policies to be pursued by the incoming US administration to restore Washington’s global leadership by rebuilding a network of its democratic allies, which has been frayed by President Donald Trump’s unilateral approach.
Trust in China’s endeavor to establish its image as a champion of free trade and multilateralism cannot be granted to a significant degree unless it departs from the practice of resorting to economic coercion to put pressure on other countries not to oppose its interests.
China imposed restrictions on South Korean businesses operating there and cultural content in an apparent reprisal against Seoul’s 2016 agreement to deploy an advanced US missile defense system, which it sees as a threat to its security.
Australia has become the latest target of Beijing’s economic retaliation for its anti-China position on sensitive issues, including an inquiry to discover the origins of COVID-19.
This coercive approach might lead other countries to refrain from deepening economic partnerships with China, and push them to align more closely with the incoming US administration.