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Japan, India agree to begin trade talks

The Associated Press | Dec. 15, 2006

Japan, India Agree to Begin Trade Talks

TOKYO - The leaders of Japan and India agreed Friday to start talks on forging a bilateral free-trade agreement within two years and to increase cooperation between the two countries’ navies and coast guards.

The accord, signed by visiting Indian Prime Minister Manmohan Singh and Prime Minister Shinzo Abe, bolsters economic and military cooperation between Asia’s biggest economy and its second-most populous nation.

After meeting Friday, the two leaders released a joint statement calling for the immediate start of negotiations aimed at reaching a free-trade agreement within two years. The accord would address trade issues and also promote increased Japanese investment in India as well as cooperation in the South Asian country’s banking, insurance and capital markets sector.

Japan also agreed to continue designating India as a top priority for overseas development aid.

"The India-Japan comprehensive economic partnership marks a new phase in our economic relations, which will enable us to develop full potential and promise," Singh told reporters.

The move is part of Abe’s push to deepen ties with India, one of Asia’s fastest-growing economies. It comes as China, a longtime ally of India’s rival Pakistan, also makes overtures to New Delhi to improve ties.

The economic cooperation dovetails with Japan’s drive to form free-trade agreements with neighboring countries. Japan is also pursuing talks with Australia and South Korea and has recently reached accords with Indonesia, Vietnam and the Philippines.

India and Japan also agreed to cooperate in promoting stability and security in Asia and fight terrorism. The two countries will undertake joint exercises of their navies in 2007, the statement said.

The two leaders also endorsed regular exchanges between their coast guards, particularly through combined exercises.

But Abe also expressed concerns about India’s nuclear capabilities, and urged India to abide by international rules and address worries about proliferation.

The Indian leader, accompanied by a business delegation, arrived Wednesday and is to leave Saturday.

 source: Houston Chronicle