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FTA talks with Thailand, Korea still divided

Asia Times, Hong Kong

FTA talks with Thailand, Korea still divided

21 June 2005

TOKYO - Prospects for Japan signing free-trade agreements (FTAs) with Thailand and South Korea are being stymied because the countries remain seriously divided on issues concerning key industrial and farm sectors, diplomatic sources have said.

Talks between Economy, Trade and Industry Minister Shoichi Nakagawa and Thai Deputy Prime Minister Somkhit Chatusiphithak held here last Thursday produced no tangible results regarding tariff cuts.

The Japanese negotiating team called on Thailand to abolish tariffs on steel and car imports by 2010, a request that Thai officials countered with an offer to exempt more than 90% of those products from reductions.

On Saturday Nakagawa said: "I intend to continue the negotiations in the belief that my good relationship with Mr Somkhit will help produce an agreement in July."

Thailand, however, hinted at wanting to renegotiate trade issues affecting primary goods, on which the two countries reached an accord this March, unless Japan moderates its demands on car and steel trading.

A senior official with the Ministry of Economy, Trade and Industry said the vice ministerial meeting scheduled for later this month was likely to make little progress.

FTA talks with South Korea were suspended last November, but the two countries are expected to agree to restart them at a meeting between Prime Minister Junichiro Koizumi and South Korean President Roh Moo-hyun on Monday.

Seoul earlier criticized Tokyo for offering too modest a tariff cut on imports of primary goods. It is not yet clear whether South Korea will tone down its demands.

The two sides are likely to continue to differ greatly on many issues, particularly those regarding marine products, thereby clouding prospects for striking a deal this year.

(Asia Pulse/Nikkei)