SEOUL, March 23: The South Korean and Japanese leaders on Friday launched a study into setting up a free trade zone, but analysts warned the single market dream was a long way off.

South Korean President Kim Dae-Jung and Japanese Prime Minister Junichiro Koizumi announced the official launch of the joint government study after a summit.

Industrialists in the two countries have been pressing for moves toward a joint market with 170 million consumers and gross domestic product totalling some five trillion dollars.

“We confirmed the launch of a study group comprising government officials, business leaders and academics,” Kim Dae-Jung told a joint press conference with Koizumi.

Koizumi, who first proposed the free trade agreement (FTA) study, said in a later speech that “Japan and South Korea have the potential to become a huge single economic zone.”

Stronger ties between the rival neighbours are important after China last year agreed with the Association of Southeast Asian Nations to create the world’s most populous free trade bloc within 10 years, covering two billion consumers.

South Korea is Japan’s third largest trading partner after the United States and China.

Japan’s exports of goods and services to South Korea totalled 3,072 billion yen ($23 billion) in 2001 against imports of 2,088 billion yen, according to Japanese statistics.—AFP