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In October 2003, the governments of Japan and of the 10-country Association of South-East Asian Nations (ASEAN) signed a general framework for a bilateral free trade agreement. In November 2004, they agreed to initiate the negotiating process. The talks started in April 2005 and ended in November 2007, and the agreement came into force on 1 December 2008.

For the Japanese government, this FTA was an important target as it tries to achieve a stronger position in Asia vis-à-vis China, Korea and United States. The finalisation of the US-Korea FTA talks in April 2007 jolted Tokyo into higher gear to get this deal completed.

The Japan-ASEAN FTA (officially a Comprehensive Economic Partnership) is a comprehensive one, covering trade in goods, services, investments, rules of origin, dispute settlement, sanitary and phyto-sanitary regulations, technical barriers to trade, economic cooperation and, on Japan’s request, intellectual property rights. For groups in Southeast Asia, it is seen as formalising ASEAN’s role as a regional manufacturing hub for Japanese corporations. It is now easier and cheaper for Japanese firms to move components (of automobiles, electronics, etc) from one ASEAN country to another, in a regional assembly line.

last update: May 2012