ASEAN, Japan aim to strike deal on services, investment next year

Mainichi Japan | August 22, 2010

ASEAN, Japan aim to strike deal on services, investment next year

SINGAPORE (Kyodo) — The Association of Southeast Asian Nations and Japan aim to strike a deal on liberalization of trade in services, and investment next year for incorporation into their two-year-old free trade deal, according to the draft of a joint statement for next week’s meeting of their economic ministers in Vietnam.

The two are already working on the services and investment aspects of a free trade deal known as the "ASEAN-Japan Comprehensive Economic Partnership Agreement," the draft of a statement to be issued after their meeting in Danang on Aug. 26 said.

Economic ministers from the 10 ASEAN members will meet Japanese Minister for Economy, Trade and Industry Masayuki Naoshima on the sidelines of the annual meeting of ASEAN economic ministers.

Although ASEAN and Japan signed the AJCEP in 2008 key elements such as trade in services, investment, movement of business persons, government procurement and intellectual property were not ready.

The draft, a copy of which was obtained by Kyodo News, says the ministers "welcomed" the starts of services and investment negotiations.

Aside from the multilateral deal, Japan has also taken the bilateral approach by signing Economic Partnership Agreements with seven out of the ASEAN members — Singapore, Malaysia, Thailand, Indonesia, Brunei, the Philippines and Vietnam.

Trade in services and investment form part of the bilateral free trade deals, but this is not the case for Cambodia, Laos and Myanmar because Japan only signed bilateral investment agreements with Cambodia and Laos in 2008 and has no agreement with Myanmar.

Japan is hoping that by the next ASEAN-Japan economic meeting in 2011 a comprehensive plan for services and investment will be in place that will help to fill the gap in this area in its economic ties with the three.

The draft says the ministers "recognized that the full implementation of the AJCEP Agreement will reinvigorate trade and investment in the region, as well as strengthen economic cooperation among the countries in East Asia."

It adds the ministers will ask officials to "address all implementation issues and concerns" for the AJCEP.

With Japan pushing strongly for an East Asian economic integration framework that is based on the 16 country East Asia Summit framework involving the 10 ASEAN members, Japan, China, South Korea, India, Australia and New Zealand, it has become crucial for Japan to successfully promote freer trade with ASEAN.

In addition, it is important for Japan not to be seen as lagging behind China, which already has an FTA with ASEAN.

The draft says total trade between ASEAN and Japan plunged 25 percent from $214 billion in 2008 to $161 billion last year due to the global economic crisis, but it still accounted for about 10 percent of ASEAN’s trade last year.

Japanese investment in ASEAN rose nearly 14 percent from $4.7 billion in 2008 to $5.3 billion last year, accounting for about 13 percent of investment into the region last year, it adds.

source: Mainichi