China, Japan and South Korea will set aside bitter maritime territorial rows and launch talks on Tuesday for a free-trade agreement, diplomats said.

The trade ministers of the three Asian economic dynamos are scheduled to meet on the sidelines of an 18-nation East Asian Summit, in the Cambodian capital of Phnom Penh, to "formally" launch the negotiations.

The meeting will be held on Tuesday afternoon at a hotel where the leaders of the three nations are staying, South Korean and Japanese diplomats told AFP.

If successful, the three-way talks involving the world's second and third biggest economies, China and Japan, as well as Asian powerhouse South Korea are expected to create one of the world's biggest free-trade zones.

Three-way trade totalled $514.9 billion in 2011, according to the Japanese government.

The start of the talks come amid deep tensions between China and Japan over competing claims to islands in the East China Sea.

Japan and South Korea are locked in another row over different islands in the East China Sea. Tensions boiled over in August after a surprise visit by South Korean President Lee Myung-Bak to the islands.

Officials and diplomats said they hoped that deepening trade relations would help ease the territorial tensions or, at least, the pact talks would be able to push ahead despite the rows.

"We have to take the FTA of Japan, China and South Korea in a broader context, that is East Asia cooperation," Chinese foreign ministry spokesman Qin Gang told reporters in Phnom Penh on Monday.

"We believe that the FTA will be a very important vehicle in forging a broader trade arrangement in this region."

Analysts said a China, Japan and South Korea FTA could be a linchpin for a wider Regional Comprehensive Economic Partnership (RCEP) agreement also to be launched on Tuesday in Phnom Penh that will involve 16 Asia-Pacific countries.

RCEP will cover all 10 members of the Association of Southeast Asian Nations (ASEAN) as well as Australia, China, Japan, India, New Zealand and South Korea.

All the countries have bilateral FTAs with ASEAN on which they can build on.

ASEAN chief Surin Pitsuwan said the countries were trying to ensure the maritime disputes did not hinder the trade negotiations.

"The effort is to try to isolate the two issues. Economic integration will have to go forward... because everybody is going to benefit from this new architecture," he told AFP on Sunday.

China says US overtakes EU as its top export market
Beijing (AFP) Nov 20, 2012 - China said Tuesday that the United States has overtaken the European Union as its biggest export market, as the continent's debt crisis has sent demand slumping.

"The biggest is the US and the EU is second," Commerce Ministry spokesman Shen Danyang told reporters at a regular briefing. "The EU used to be the biggest."

China's exports to the United States in the first 10 months of this year totalled $289.3 billion, while shipments to the EU came to $276.8 billion, according to Chinese customs figures.

Weak demand from both Europe and the US has been a big factor as China's economic growth has slowed over the past seven quarters to the end of September.

Economic growth in the United States remains weak but is expanding, while the eurozone's debilitating debt crisis has dragged it back into recession.

Shen also said the Association of Southeast Asian Nations had moved past Japan as China's third-biggest export market. Japan, which is in the midst of a diplomatic row with China that has hit trade between the two nations, slipped to fourth place.