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Tokyo in push on trade deals

Financial Times, UK

Tokyo in push on trade deals

By David Pilling in Tokyo, Amy Kazmin in Bangkok and Roel Landingin in Manila

17 January 2005

Japan will push to conclude a basic bilateral trade agreement with Thailand and Malaysia within the next few months, according to a senior trade official, who denied suggestions from a member of his own ministry that talks with those two countries had stalled.

The leaders of both Thailand and Malaysia had expressed a strong desire to sign agreements quickly, prompted by Japan’s conclusion of a framework agreement with the Philippines in November, he said.

Japan, taken aback by China’s overtures to Asian neighbours, has accelerated efforts to strike trade agreements, but critics say these fall well short of promoting real free trade.

“These are not 100 per cent free trade agreements,” the senior Japanese trade official conceded. “They are a mixture of liberalisation and economic and technical co-operation.” Advisers to Junichiro Koizumi, prime minister, have stressed the importance of such accords in helping to build ties with Asian neighbours as a bulwark against China’s growing influence.

In particular, Japan is keen to negotiate an agreement with the 10-member Association of South East Asian Nations, with talks set to begin in April. The research institute unit of the Japanese trade ministry estimates that cementing an FTA with Asean could add Y1,100bn-Y2,000bn ($10.8bn-$19.6bn, €8.2bn-€15bn, £5.8bn-£10.5bn) a year to economic growth and create 150,000-260,000 jobs.

The Japanese trade official said talks with Thailand focused on several contentious issues, including access to Japanese markets for Thai sugar, chicken and starch. Bangkok also wanted Japanese health insurance to cover treatment for Japanese patients in Thailand, and the chance to send some workers to Japan.

Thai officials said they had made a big concession by withdrawing their request to liberalise Japan’s rice market, but the gesture had not been reciprocated. With Malaysia, talks have centred on how to open up Kuala Lumpur’s domestic car industry, though little progress had been made.

Even with the Philippines, where talks have gone more smoothly, big differences remain before the accord can be finalised in June. Additional reporting by Mariko Sanchanta in Tokyo