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Japan, Brunei to sign FTA in Tokyo

Houston Chronicle, USA

Japan, Brunei to Sign FTA in Tokyo

By Kozo Mizoguchi, Associated Press Writer

15 June 2007

TOKYO - Japan and Brunei will sign a free trade agreement next week aimed at cutting tariffs and ensuring a stable supply of natural gas to Japan from the Southeast Asian country, an official said Friday.

The accord will be finalized Monday in Tokyo by Prime Minister Shinzo Abe and Brunei’s Sultan Hassanal Bolkiah, said Satoshi Hamaguchi, an official at Japan’s Ministry of the Economy, Trade and Industry.

Abe’s Cabinet approved the accord with Brunei Friday, Hamaguchi said. Hassanal is scheduled to begin an official visit to Japan Sunday.

Japan and Brunei, a tiny sultanate on the island of Borneo, had been in free-trade negotiations for a year, Hamaguchi said.

Under the agreement, Brunei will notify Japan in advance if it introduces any measure to restrict exports of natural gas, Hamaguchi said. Japan currently gets about 10 percent of its total natural gas requirements from Brunei.

The accord also calls on Brunei to abolish a 20-percent tariff imposed on automobiles and auto parts from Japan within three years of the implementation of the agreement, Hamaguchi said. Tariffs on electronics and machinery products, currently set at in a range of 5-20 percent, will be eliminated within five years.

In return, Japan will eliminate tariffs on tropical fruits such as mangos and durians immediately after the accord is put into effect. It will also gradually abolish tariffs on imports of other agriculture and forestry products.

Japan exported 11.5 billion yen ($93.50 million) worth of products to Brunei in 2005, with automobiles and auto parts accounting for 71 percent of the total, according to Japanese government figures. It imported 252.5 billion yen ($2.05 billion) worth from Brunei, mostly natural gas and crude oil.

The accord with Brunei will be the seventh free-trade deal for Japan. The world’s second-largest economy has already struck similar agreements with Malaysia, Singapore, Thailand, the Philippines, Mexico and Chile. Japan is pursuing additional trade agreements with Vietnam, India and Australia.