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Japan: FTA talks with 3 nations at crucial stage

Yomiuri Shimbun | 28 October 2004

FTA talks with 3 nations at crucial stage

Japan’s ongoing negotiations over free trade agreements with Malaysia, the Philippines and Thailand are entering a crucial stage.

During Wednesday’s talks with the Philippines in Manila, the government officially presented a plan to accept nurses and nursing-care workers from the country, an important issue for Japan.

Concerned parties in Japan and the three countries have expressed hopes that basic agreements for the FTAs will be reached by late next month, when the Association of Southeast Asian Nations is to hold a summit meeting.

But at the same time, different degrees of progress in the talks with the three nations have become apparent, with Japanese officials predicting that the negotiations with Thailand will see the year out.

The main point of Japan’s proposal about accepting Philippine nurses and nursing-care workers was that in principle, only those licensed in the Philippines would be able to enter Japan, and they would have to obtain Japanese certification to work here.

In past negotiations, the two countries reached a basic agreement on the condition that Filipino license holders would have to obtain Japanese licenses.

In addition, concerning nurses, the two countries likely will agree this weekend to some details that Japan presented in Wednesday’s talks, including:

- Filipino workers to enter Japan on visas covering specific activities, authorized by the justice minister on a case-by-case basis.

- Filipino workers will be able to renew their visas if they gain Japanese certification for their jobs.

An official in the Prime Minister’s Office said the negotiations with the Philippines were the closest to an agreement among ongoing FTA talks with the three countries, in addition to South Korea.

The highest hurdle for reaching the agreement over nurses and nursing-care workers is how many Japan will accept.

Tokyo wants to set the maximum number at about 100 for both categories annually. But a source in the Japanese delegation said, "The gap between the number and the Philippines’ desire is very large."

Analysts said the Japanese delegation did not specify the number of workers to be accepted during Wednesday’s talks.

In talks toward the weekend, it is likely that the two sides will put priority on reaching a framework agreement over the matter, including the issue of licensing, with the exact number of workers to be accepted to be postponed to future negotiations, analysts said.

In other fields, the Philippines has been reluctant to accept Japan’s demand for the elimination of its tariffs on automobile and steel imports.

The Philippines also asked Japan for the liberalization of trade in Philippine sugar and tuna, in addition to bananas and pineapples, which were referred to in past talks.

The focus of attention is on how the sides can narrow differences over the tariffs issue during the current round of negotiations.

In the talks with Malaysia, the main point is Japan’s demand for the elimination of automobile tariffs.

But Malaysia’s policy of fostering and protecting its domestic automobile industry has been an obstacle.

In the bilateral talks held since January, Japan has demanded automobile tariffs be eliminated as soon as possible, but Malaysia has insisted that automobiles be exempted in principle from tariff cuts.

In the next round of talks scheduled from Nov. 4 to 6, no progress is expected over the automobile issue, a source in the Japanese delegation said.

One factor in Japan’s favor is that Malaysian Prime Minister Abdullah Ahmad Badawi, who took office in autumn last year, appears to broadly support opening up the country’s markets.

Abdullah plans to review the automobile industry policy within the year, eyeing some measures to liberalize the car market.

An Economy, Trade and Industry Ministry insider predicted that Malaysia’s policy review would benefit the FTA talks, saying, "It’s possible for the two sides to reach a basic agreement by the end of the year."

In talks with Thailand, the main focus has been on whether Japan will liberalize its controls on agricultural imports.

Japan and Thailand already have agreed that rice—which was seen as the main obstacle in the negotiations—will not be subject to tariff cuts.

But many hurdles still remain as Thailand continues to strongly demand the elimination of Japan’s tariffs on chicken, sugar and starch.

A diplomatic source said, "Thai Prime Minister Thaksin Shinawatra can’t make a bold decision until the country’s general election in February."

As a result, the future of the negotiations with Thailand remains uncertain, the source said.

On Tuesday, the Japan Business Federation (Nippon Keidanren) will dispatch an economic mission led by Chairman Hiroshi Okuda to the three countries.

The mission will hold talks with the countries’ leaders with the aim of encouraging early agreements over FTAs with Japan.


 source: Yomiuri Shimbun