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ASEAN-Japanese FTA to take effect Dec. 1

Japan Times

ASEAN-Japanese FTA to take effect Dec. 1

22 October 2008

Kyodo News/A comprehensive free-trade agreement between Japan and the 10-member ASEAN will enter into force Dec. 1, beginning with Japan and countries that have completed domestic ratification procedures by the end of this month, the Foreign Ministry said Tuesday.

Japan on Wednesday will notify the Association of Southeast Asian Nations on the completion of its ratification of the ASEAN-Japan Comprehensive Economic Partnership Agreement, Japan’s first FTA with a regional bloc. From the ASEAN side, Singapore and Laos have also finished their procedures.

Japan has been eager to catch up with China and South Korea amid an intensifying race for regional FTAs. The accord with ASEAN is not only an FTA for goods but also covers services and investment.

It will enable Japanese companies that are expanding their markets in Southeast Asia to reduce trade costs.

For example, the tariffs in place on Japanese exports from one ASEAN country to another will be removed.

In particular, electronics and automobile manufacturers will benefit as parts from various countries in the region can be assembled without tariffs being levied.

Japan will repeal tariffs on 93 percent of imports from ASEAN by value within 10 years of the deal taking effect. Meanwhile, six major ASEAN members - Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand - will eliminate tariffs on 90 percent of imports from Japan, including automobiles, within 10 years.

A more gradual tariff elimination table has been set for the remaining four ASEAN members with smaller economies - Cambodia, Myanmar, Laos and Vietnam.

The deal with ASEAN, signed in April, is Japan’s eighth FTA, following bilateral agreements with Singapore, Mexico, Malaysia, Chile, Thailand, Indonesia and Brunei.

The government established a new ambassadorial post in charge of ASEAN affairs last Friday and appointed former Ambassador to Israel Yoshinori Katori to the job.