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S Korea blames Japan for trade impasse

Financial Times, London

S Korea blames Japan for trade impasse

By David Pilling in Tokyo

Published: June 28 2005

Eighteen months of talks over a proposed bilateral trade agreement between Japan and South Korea are on the verge of collapse because Japan’s Agriculture Ministry has blocked meaningful dialogue on trade in farm and marine products, a South Korean diplomat said yesterday.

"We cannot engage in further negotiations if Japan maintains this kind of attitude," said the diplomat, who declined to be named.

"Japan suffers from an inability to co-ordinate. Somehow they cannot persuade a certain ministry to conform to the general orientation of Japanese policy," he said in a reference to the Agriculture Ministry, which is under pressure from farmers to prevent or limit imports of rice and other products.

The comments, while arguably a negotiating gambit, are in line with observations from other countries with which Japan is discussing bilateral trade agreements.

They mirror the complaints of some officials at Japan’s trade and foreign ministries, who cite what they say are the blocking tactics of the Agriculture Ministry.

Last week, in a tense Japan-South Korean summit that was dominated by squabbling over history, Junichiro Koizumi, Japan’s prime minister, asked Roh Moo-hyun, South Korea’s president, for an early resumption of talks that had stalled.

"It is important to resume negotiations quickly. It is important to hold high-level negotiations," Japanese officials quoted Mr Koizumi as saying.

That proposal "didn’t get anywhere", according to the South Korean diplomat, because of the derisory opening offer from Japan.

Seoul was ready to sign a "high-level, comprehensive" agreement with Tokyo even though that would be painful for many small and medium-size South Korean companies in protected industries, he said.

"We are prepared to weather domestic resistance [to a trade agreement], but if we start on the basis that a certain Japanese ministry offers us, we would be subjected to severe domestic criticism."

Some Japanese officials have accused Mr Koizumi’s government of putting a diplomatic desire to sign bilateral agreements above any real effort to liberalise trade.

In the past few years, Tokyo has launched bilateral trade talks with the Philippines, Thailand, Malaysia, Indonesia and South Korea.

This initiative has more to do with countering China’s growing influence in the region than with a genuine wish to open up protected areas of Japan’s economy, some Japanese officials say privately.

Japan’s trade initiative pits its Keidanren industrial lobby, which wants to gain preferential access to foreign markets, against farmers, who have influence with the ruling Liberal Democratic party.

Tokyo’s attempts to open up Thailand’s steel industry, for example, have been hampered by the resistance of Japanese farmers to allow an increase in imports of Thai products such as sugar, tapioca and chicken.

Rice is so sensitive it was removed from the table before negotiations started.

 source: Financial Times