Thursday September 29, 2005

CORRECTED:
Japan, ASEAN trade ministers fail to break impasse in FTA talks

(Kyodo) — Japan and the Association of Southeast Asian Nations failed to narrow their differences on launching free trade negotiations between the two sides during a ministerial meeting on Thursday.

Trade ministers from the 10-member ASEAN urged Japan to soften its position that their free trade negotiations should only be launched after Tokyo has wrapped up bilateral FTA deals with individual ASEAN countries, officials said after the meeting. "Nobody shifted position," ASEAN Secretary General Ong Keng Yong said after the meeting, which was held on the sidelines of an annual gathering of ASEAN economic ministers. "Basically they have not agreed to anything and we also have not agreed on anything."

ASEAN officials said Japanese deputy trade minister Hachiro Okonogi, who is attending the meeting on behalf of Japanese Trade Minister Shoichi Nakagawa, is expected to convey ASEAN’s request back to Tokyo. "We intend on our part to pursue both regional and bilateral negotiations," Okonogi told a news conference.

But he added: "It doesn’t mean we have changed our position. Through the meeting today we have been able to realize once again the importance of regional negotiations but it continues to be our understanding that bilateral negotiations are also important."

ASEAN countries are exasperated at the slow pace of preliminary free trade talks with Japan, which have been bogged down by their differences on rules of origin and by Japan’s insistence to take the bilateral approach, which they say is expected to cause complications.

Japan has inked a bilateral FTA with Singapore, and has nearly concluded bilateral FTA deals with Malaysia, the Philippines and Thailand. It started negotiations for a deal with Indonesia earlier this year.

ASEAN officials said Japan plans to negotiate one single FTA deal with the rest of ASEAN’s 10 member countries, namely Brunei, Cambodia, Laos, Myanmar and Vietnam. It plans to string all these FTAs together into one FTA deal with the grouping as a whole.

Several months ago the group wrote a letter to Nakagawa to express its concern at the slow pace of free trade talks, ASEAN officials said.

The group is under pressure to show that some headway has been achieved when ASEAN leaders meet for an annual summit in Kuala Lumpur in December.

Japan, which has agreed with ASEAN to achieve full trade liberalization by 2012, has been lagging behind China and South Korea.

China and ASEAN have already concluded negotiations to liberalize trade in goods and have started to implement cuts in import tariffs since July this year with the end goal of 2010 for full liberalization.

ASEAN and South Korea have agreed to achieve elimination of tariffs for 80 percent of products by 2009 and the rest at a yet undetermined date between 2010 and 2012.

"I hope we have convinced them that we should do it (bilateral and regional FTAs) concurrently," Ong said. "I don’t think the deadlock can be maintained for a long time."

Ong indicated that ASEAN is willing to show some flexibility on the issue of rules of origin.