South Korea, China and Japan agreed Sunday to launch official negotiations this year to forge an ambitious pact tearing down barriers to trade between the three of Asia's biggest economies.
South Korean President Lee Myung-bak, Chinese Premier Wen Jiabao and Japanese Prime Minister Yoshihiko Noda reached the agreement during annual summit talks in Beijing that also covered North Korea and other issues of cooperation.
The envisioned pact, if realized, would create one of the world's largest markets as South Korea, China and Japan account for 20 percent of the global gross domestic product (GDP), 17.5 percent of all global trade, and 22 percent of the global population.
Such a deal could also help improve overall relations between the three countries, which have often frayed over their shared history, including Japan's aggression against the other nations in the early 20th century.
But widespread views are that negotiations would be tough and lengthy.
"I believe the launch of FTA negotiations this year is very meaningful for the future of cooperation between the three countries," Lee said during a joint news conference after the summit talks.
During a meeting with business leader of the three countries, Lee also said that an FTA between the three neighbors could significantly contribute to the world economy and global free trade efforts.
On the sidelines of the summit, the three countries also signed an investment guarantee treaty that calls for providing most-favored-nation status and other protective measures for investment from each other.
The pact is the first economic treaty between the three countries.
North Korea was high on the agenda for the summit.
Sunday's talks came a month after Pyongyang's long-range rocket on April 13. Though the rocket fizzled soon after takeoff, the liftoff drew international condemnation as it broke a U.N. ban adopted over concerns such a launch could be used to develop missiles capable of carrying nuclear warheads.
Concerns have since grown that Pyongyang could stage additional provocations, such as a nuclear test, which would be its third, as well as more missile tests and border clashes. Officials in Seoul have said the North appears to have completed preparations for a nuclear test.
They exchanged views on the launch of North Korea's new leadership, its long-range rocket launch and related developments.
Lee also said he proposed during the summit that the three countries should cooperate closely to study "more effective" and fresh measures to deter North Korean provocations. Lee did not elaborate.
But Chinese Premier Wen spoke in a softer tone during the news conference, calling for all sides to "abandon Cold War-style thinking" so as to resolve tensions and stressing the "most urgent issue for now is to prevent tensions on the Korean Peninsula."
During the summit talks behind closed doors, however, Wen said that China has been strongly urging Pyongyang to refrain from additional provocations since last month's rocket launch, according to Kim Tae-hyo, a senior security aide to President Lee.
China is usually reluctant to openly criticize North Korea. Beijing is the North's last-remaining major ally that provides the isolated nation with crucial economic aid and diplomatic support. Experts say China dreads any instability in North Korea as it could hurt its economic and political interests.
The three countries also signed two other cooperation agreements, one of them on agricultural cooperation and the other on preventing desertification of forests and protecting wildlife.
Later in the day, Lee held one-on-one summits with Wen and Noda.
South Korea, China and Japan have held an annual three-way summit since 1999 on the sidelines of regional summits organized by the Association of Southeast Asian Nations (ASEAN). Since 2008, the sides have also held another regular summit that rotates among the three countries, and Sunday's meeting was the fifth.