The governments of China, South Korea and Japan are expected to begin negotiations for a possible trilateral free trade agreement between the three countries in the course of 2012, first concluding bilateral agreements. The current bilateral investment agreement between China and Japan entered into force in 1989 – relatively early. Although China and Japan have signed free trade agreements with many countries, China and Japan have not put in place a free trade mechanism due to external factors such as the rigidity of the US-Japan alliance, strategic distrust of the US, and volatile south Korea-Japan relations. Despite the effects of the COVID-19 pandemic, bilateral trade between China and Japan amounted to nearly $150 billion in the first half of 2020. Japan`s investment in China amounted to about two billion dollars, which is essentially a level equivalent to the same period of the previous year. These resilient flows reflect the deep foundations and enormous potential of China-Japan relations. If China, Japan and South Korea reach a free trade agreement, it would become the third largest free trade area in the world after the USMCA and the European Union. Negotiations for a bilateral free trade agreement between Japan and Korea, which ended in 2004 despite several attempts at recovery, are facing unresolved tensions resulting from the Japanese occupation of Korea in the first half of the 20th century and Japanese opposition to the reduction of tariffs on agricultural imports. A possible free trade agreement between China, South Korea and Japan must be seen in the context of the ongoing economic and political rivalry between China and the United States, given that Washington intends to create a new regional free trade and investment agreement through membership of the Trans-Pacific Partnership (TPP). At present, the stability and improvement of China-Japan relations have also created good conditions for improving economic relations on both sides. Japanese companies, in particular, are optimistic about the potential of China-Japan free trade cooperation, and China and Japan are increasingly asking to deepen their cooperation.
A trilateral investment was signed by the three nations.  An agreement would promote the integration of Asian economies. All of Asia and the rest of the world economy would benefit from their close and progressive trade relations.  In order not to be isolated from the United States in international trade, China should actively promote trade liberalization and globalization, integrate more into international markets, and forge closer economic ties with more countries. . . .