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Japan, ASEAN get ready to finalize free-trade deal

The Japan Times

Thursday, April 5, 2007

Japan, ASEAN get ready to finalize free-trade deal

Kyodo News

Japan and the Association of Southeast Asian Nations are likely to wrap up negotiations in early May for the liberalization of trade in goods, paving the way for Tokyo’s first free-trade deal with a regional bloc, government sources said Wednesday.

Economics ministers from Japan and the 10 ASEAN members are expected to meet in Brunei on May 4 or 5 to conclude the negotiations, they said.

The economic partnership agreement, which is expected to take effect in 2008, will establish a free-trade bloc between Japan and the ASEAN, and enable Tokyo to take the initiative in steering Asia’s economic integration.

As a core of talks for an EPA between Japan and ASEAN that started in 2005, negotiators from the two sides had been discussing the liberalization of trade in goods, hoping to wrap them up by the end of last August.

But the negotiations for free trade in goods hit a snag due to differences over tariff reductions for key items — agricultural produce for Japan and industrial products for ASEAN.

In January, Japan proposed eliminating tariffs on 92 percent of some 5,200 goods subjected to the negotiations and put the talks back on track.

Under the proposed free-trade deal, Japan will remove tariffs on almost all industrial products while either reducing or eliminating them on tropical fruit. Rice is expected to be excluded from the deal.

ASEAN will likely eliminate tariffs on steel products and automobiles over 10 years, giving Japan favorable economic effects estimated to be worth 4 trillion yen.

An EPA is more comprehensive than a free-trade agreement, which focuses on the liberalization of trade in goods. An EPA also covers the opening up of the services and investment sectors.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam and has a combined population of 530 million. In 2005, trade between Japan and ASEAN totaled 16.4 trillion yen.

 source: Japan Times