South Korea, China and Japan on Tuesday declared the kickoff of the official negotiations for a trilateral free trade agreement early next year.

In Phnom Penh, commerce ministers from the three Asian countries announced the launch of FTA talks, which would create one of the world’s largest economic blocs.

Economists say the deal would be comparable to the European Union and the North American Free Trade Agreement as the collective gross domestic product of the three countries will reach $12 trillion, or around 20 percent of the world’s total GDP. The three countries account for 17.5 percent of all global trade and 22 percent of the global population.

The portion compares with the European Union’s 30 percent and the U.S.’ 23 percent. Trade volume among the three Northeast Asian nations amounted to $5.32 trillion in 2010, and their combined population reached 1.52 billion.

The deal among the three Asian powers features the fair treatment of foreign investors, strengthened protection of intellectual property and a ban on toughening investment-related regulations.

It goes into effect a month after the three countries are to notify one another that they have completed their domestic procedures including securing legislative bodies’ ratification.

Under the trilateral FTA, Korea is projected to enjoy the greatest “GDP growth effect” among the three, according to a research report.

The Korea International Trade Association predicted that the FTA will have the effect of boosting Korea’s GDP growth by 3.27 percent to 5.14 percent.

Citing a report by the Korea Institute for International Economic Policy, KITA also said the FTA will provide China and Japan with GDP growth of 0.89 percent to 1.54 percent, and 1.05 percent to 1.21 percent, respectively.

Some trade analysts in Seoul said the three-way FTA, if realized, will play a central role in future talks about the creation of the so-called East Asia community.

“The three-party FTA is expected to form a base to create the East Asian economic integration given that the trio account for 63 percent of trade in East Asia,” said an analyst.

In another positive sign toward creating the regional bloc like the EU, Asia Pacific countries are seeking to launch negotiations to forge what is dubbed the “Regional Comprehensive Economic Partnership.”

The countries participating in RCEP negotiations are expected to be the 10 ASEAN members and their dialogue partners including Korea, China, Japan, India, Australia and New Zealand. The 16 countries have a combined GDP of $19.7 trillion, and their trade volume reaches $10.1 trillion, according to the KIEP.

The U.S. and Russia hope to take part in the negotiations aimed at lowering barriers to trade and promoting a freer flow of goods and services.

By Kim Yon-se (kys@heraldcorp.com)