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FTA talks in cards with Malaysia, Thailand and the Philippines - Japan

FTA talks in cards with Malaysia, Thailand and the Philippines

12 December 2003

By MAKOTO USHIDA, The Asahi Shimbun

Japan will hold free-trade talks early next year with Malaysia, Thailand and the Philippines, Prime Minister Junichiro Koizumi said Thursday.

The announcement followed bilateral meetings with Malaysian Prime Minister Abdullah Ahmad Badawi, Thai Prime Minister Thaksin Shinawatra and Philippines President Gloria Macapagal-Arroyo on the sidelines of the Japan-ASEAN Commemorative Summit that ends today.

Japan’s only free-trade agreement (FTA) at the moment is with Singapore.

Koizumi said the leaders had agreed to each raise current working-level preparatory talks to government negotiations. He expressed hope agreements could be reached ``while we have the momentum.’’

While Koizumi did not set targets for the FTAs to be reached, Tokyo aims to complete the process ahead of the 2005 start of FTA negotiations with the 10-nation Association of Southeast Asian Nations (ASEAN).

Japan will formally start talks with the regional body in 2005 in an effort to reach a Japan-ASEAN FTA in 2012 in line with an agreement reached at the ASEAN summit in Bali in October.

A Foreign Ministry official said Thursday that Tokyo views the next ASEAN summit meeting, to be held in Laos in around November 2004, as the likely venue for finalizing the FTAs.

Koizumi on Thursday briefed the leaders on progress to date. He said FTAs with the three nations would eliminate trade barriers and have a positive benefit on gross domestic product for each of the four parties.

With FTAs with Japan in place, it is expected that Thailand’s GDP would increase by 20.1 percent; for the Philippines, the figure ranged from 1.7 to 3.0 percent, and 5.1 percent for Malaysia. The rate of increase for Thailand stands out because some data from before the 1997 financial crisis was included within the basis for comparison.

Meanwhile, the positive GDP benefit for Japan under each FTA is expected to be 0.2 percent in relation to Thailand, between 0.01 and 0.03 percent for the Philippines, and 0.1 percent for Malaysia. Although the levels of increase would appear small, the effect of the FTAs would be sizable because Japan’s absolute GDP value is huge, officials said.

Koizumi also met Thursday with Brunei’s Sultan Haji Hassanal Bolkiah and Singapore Prime Minister Goh Chok Tong.

Koizumi explained Japan’s stance in deploying Self-Defense Forces to Iraq, saying the mission was intended purely for humanitarian purposes and to help with the country’s reconstruction.

Malaysia’s prime minister, whose predecessor Mahathir Mohamad was against the war in Iraq, did not take direct issue with Japan’s decision.

"Japan has the know-how for supporting reconstruction, so it would play a significant role,’’ he said.

(IHT/Asahi: December 12,2003)