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Japan-ASEAN: Step back to save deal, says researcher

Bangkok Post, Bangkok

27 September 2004

Step back to save deal, says researcher


Asean and Japan should take a step back from the thorniest issues under discussion in order to move forward toward a fruitful free trade area (FTA) agreement, according to a prominent researcher from the Thailand Development Research Institute (TDRI).

Closer trade ties between the 10-nation trading bloc and Japan, the largest foreign investor in Southeast Asia, would leave both parties stronger as a result. Both would also benefit from improved economies of scale, increased production efficiency and competitiveness, said Dr Chalongbhop Susangkarn, the TDRI president.

Asean and Japan pledged to launch the Asean-Japan Comprehensive Economic Partnership (AJCEP) in late 2002, a step behind China, which signed a framework agreement on a future FTA with Asean in the same period. Tokyo does not want to lose its leadership in the region to China.

Unfortunately, the Asean-Japan negotiations have ground to a halt, failing to reach agreement on a number of deadlocked issues. Asean has struck a nerve by touching on sensitive issues for Japan, such as tight sanitary standards for farm products and high import tariffs on agricultural goods.

For its part, Japan’s request that Asean liberalise its service sector, review trade competition policies and increase transparency for government procurement has left many Asean members cold.

"We agreed to not negotiate any more this year and will restart official negotiations next April. We have discussed the same [deadlock] areas repeatedly since early this year without any success," a Trade Negotiations Department official close to the negotiations said.

Dr Chalongbhop said that in fact, bowing to Japan’s requests would benefit Asean as they would increase efficiency and move the bloc forward in line with its plan to create an Asean Economic Community by 2020.

As for Asean’s demands, the group would be better off negotiating for increased market access through the World Trade Organisation, where positive movements on global farm trade have been made in recent months.

"It is quite important for large Japanese firms in Asean to help the bloc increase its effectiveness," Dr Chalongbhop said.

"Tokyo should be eager to forge closer ties with the Southeast Asian group, otherwise China will take over leadership in the region from Japan."