South Korea and China can conclude free trade negotiations in two years, and the deal can be expanded to include Japan, President Lee Myung-bak said in an interview broadcast Saturday, stressing the ambitious three-way trade pact can be reached earlier than expected.

The three countries agreed earlier this month to launch free trade negotiations this year. The ambitious 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 and 17.5 percent of all global trade.

Separately, South Korea and China have kicked off bilateral free trade talks this month.

“Right now, South Korea and China have agreed to engage in negotiations for a bilateral free trade agreement. Once we have sorted out an FTA framework between South Korea and China, which I think may happen in about two years, Japan can then join in,” Lee said in an interview with CNBC television.

“That’s why I think that a trilateral FTA may happen much sooner than expected. Because if the three countries were to negotiate from scratch, then this will take quite a bit of time due to their different economic sizes, as well as priorities and necessities,” he said.

The three-way pact, if realized, will not only benefit the countries involved, but also help speed up the global economic recovery as their economies are not only big in size but also growing at a much stronger rate than those of U.S or European countries, Lee said.

Lee said it took many years for South Korea to conclude free trade talks with the U.S. and put the pact into force due to “a lot of political oppositions to that deal,” but he believes a free trade deal with China won’t take such a long time as “there isn’t much of a negative sentiment towards a Korea-China FTA.”

On North Korea, Lee urged Pyongyang to learn from countries like China and Vietnam and open up to the outside world.

“North Korea should look at the example of the countries like Vietnam. Vietnam is now working closely with countries that it fought against decades ago. Its economy is vibrant. China is another great example. I believe that if North Korea opens up the way that Vietnam and China did, I’m sure the North can develop very quickly,” he said.

If North Korea opens up into the international community, its economy would be able to stand on its own, after which, a peaceful reunification between the two Koreas would be “most ideal,” Lee said.

Lee expressed concern about the debt crisis in Greece.

“The countries around the world are worried about what’s happening in Greece as well as Spain in the eurozone crisis ...

What’s most important at this juncture is that the European leaders need to be in an agreement on a resolution, if not, the situation will have global ramifications,” he said.

“The South Korean government is seeking financial and fiscal soundness. We have laid out numerous steps in case the situation deteriorates ... But if Greece exits the eurozone, this is going to be a huge global problem and it will affect South Korea,” he said. 

(Yonhap News)