The wire service Reuters is reporting that the leaders of Japan, China and South Korea have pledged to speed up preparations for a possible three-way free-trade pact. The leaders are working through minor trade issues and concerns over Japan's nuclear crisis, but the ramifications of an Asian free trade agreement could impact U.S. markets. These three countries are significant trading partners for the United States.
There are some pretty difficult issues the three countries will have to work through, but the leaders are reported to be optimistic they can come to some kind of deal in the near future. The three leaders conducted a two-day summit and agreed to joint studies to seek an agreement in 2011.
The continued on-again, off-again efforts by the World Trade Organization to get the Doha Round of negotiations back on the rails has opened the door for countries to enter into unilateral and multi-lateral trade agreements. This growing issue can impact trade for countries not included in the agreements.
And for countries that can't get free-trade agreements moving the issue can slow trade in other ways. U.S. farm leaders pushed hard last week to get languishing free-trade agreements moving in Congress again. Whether that will happen anytime soon is hard to say. However, moves by China, Japan and South Korea to enter into a free-trade agreement may be an incentive for U.S. lawmakers to move their process on key agreements forward.
One issue that could slow down movement of the three-way Asia agreement will be the nuclear issue in Japan. Food from a range of Japanese prefectures has been banned in China and will need to be certified before trade begins again. However, this news that the three trade giants want to seek that free-trade agreement could speed the effort to open China to more Japanese food imports.