Japan cool to China bid for a free trade accord

The Associated Press, May 20, 2005

Japan cool to China bid for a free trade accord

TOKYO TOKYO: Wu Yi, Chinese deputy prime minister, is urging Japan to start negotiations soon with China on a bilateral free trade agreement, but a Japanese official said Thursday that many barriers to fair trade in China made such a deal unappealing.

Wu made the remarks before about 400 participants, including Japan’s trade minister, Shoichi Nakagawa, at a trade promotion meeting in the central Japanese city of Nagoya, said a spokeswoman for the conference, Makiko Takenoiri.

Wu told the gathering that talks on a free trade agreement would help strengthen economic cooperation between Japan and China. Wu called for bilateral cooperation in energy and industrial strategies, as well as for Japanese investments in Chinese regions that have so far attracted little investment from Japan, Takenoiri said.

Describing Japan as "an important economic partner," Wu said China wanted to develop together with Japan while learning lessons from history - a reference to deep differences between the two countries over interpretations of Japan’s wartime actions.

Violent protests erupted in Chinese cities last month after Tokyo approved a middle-school history textbook that critics including Beijing said whitewashed Japanese atrocities during its military conquests in the 1930s and 1940s.

Vandalism against Japanese companies operating in China, and on Japanese Embassy and consulate buildings there, has cooled Japanese interest in investment and tourism in China.

A Japan-China trade agreement is not expected to emerge any time soon. Tokyo is concerned about barriers to foreign trade in China, such as weak laws on intellectual property and investment rules that are not favorable to foreigners, said Shigetaka Takagi, a trade ministry official.

Takagi added that Japan had given free trade agreements with South Korea, Malaysia and Thailand priority over such a deal with China.

"At this point, we consider there to be more demerits than merits in concluding a free trade agreement with China," Takagi said.

Japan has free trade agreements with Singapore and Mexico, and has reached a basic deal with the Philippines. It is in similar talks with Indonesia, Malaysia, Thailand and the 10-member Association of Southeast Asian Nations.

China and Asean have agreed to begin creating a tariff-free zone over the next five years in their combined market of 2 billion people.

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source: IHT