China, South Korea and Japan agree to strengthen free trade #JapanFinance

China, South Korea and Japan agreed Sunday to strengthen free trade in the face of a raft of new tariffs imposed by US President Donald Trump.

The agreement came at a meeting of top trade officials — the first at that level in five years — days ahead of the start of tariffs on a huge range of US imports, including cars, trucks, and auto parts.

South Korea and Japan are major auto exporters, while China has also been hit hard by the US tariffs.

The meeting was attended by South Korea’s industry minister Ahn Duk-geun, his Japanese counterpart Yoji Muto, and China’s Wang Wentao.

The three countries called for their negotiations for a comprehensive trilateral free-trade agreement to be speeded up, and agreed to create “a predictable trade and investment environment”, a statement said.

South Korea’s Ahn said the three countries must respond “jointly” to shared global challenges.

“Today’s economic and trade environment is marked by increasing fragmentation of the global economy,” he said.

“The international environment surrounding us is constantly changing, and uncertainties are increasing,” Japanese trade official Yasuji Komiyama told a press briefing.

Chinese official Wang Liping said “unilateralism and protectionism are spreading”, and the three countries must assume responsibility to safeguard the multilateral trading system.

The three account for 20 percent of the world’s population, 24 percent of the global economy, and 19 percent of global merchandise trade, he said.

According to the South Korean trade ministry, Ahn emphasised that protectionism was “not the answer” and urged efforts to ensure the World Trade Organisation functions properly to “safeguard the stability and predictability” of global commerce.

Trump has promised tariffs tailored to each trading partner from April 2 to remedy practices he deems unfair.

But he also told reporters last week that there would be “flexibility”, and markets appeared to react with some relief at the end of last week.

Common challenges

Following the meeting between the three ministers, they alkso held bilateral meetings gatherings.

Japan’s Muto said regardless of domestic “political circumstances in either country”, he hopes that exchanges and cooperation will continue with South Korea.

Muto said that the two countries face many common challenges, such as energy issues, which have a significant reliance on foreign and securing critical minerals.

“There may, at times, be political or diplomatic difficulties, but I strongly hope that social and economic activities will continue without disruption, allowing our businesses to operate without obstacles,” he said.

The countries have long been locked in bitter historical disputes, including over Japan’s use of forced labour during its decades-long occupation of the Korean peninsula.

Tensions escalated in 2018 when South Korea’s Supreme Court ordered Japanese firms to compensate victims of wartime forced labour, triggering a series of tit-for-tat economic measures.

Experts say US tariffs, particularly on automobiles, will heavily impact the two countries, as both are highly dependent on exports to America.

South Korea’s Minister Ahn said Thursday that because 50 percent of South Korea’s automobile exports go to the United States, the tariffs “raise concerns over significant damage to the industry”.

Japan is home to the world’s top-selling carmaker Toyota, and the health of the auto industry impacts many sectors, from parts manufacturing to steel and microchips.

Of the country’s 21.3 trillion yen ($145 billion) of US-bound exports in 2024, cars and other vehicles accounted for roughly a third.

bur-hs/fox