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Friday, Dec. 12, 2003

Japan, ASEAN trio plan FTA talks but hurdles seen

Thailand, Malaysia, Philippines come to the table


By TOMOKO OTAKE and KANAKO TAKAHARA
Staff writers

Japan formally agreed Thursday to enter government-level negotiations on bilateral free-trade agreements with Thailand, Malaysia and the Philippines, raising its tally of ongoing FTA talks to five.

The accords were struck as Prime Minister Junichiro Koizumi held separate summits with Thai Prime Minister Thaksin Shinawatra, Malaysian Prime Minister Abdullah Ahmad Badawi and Philippine President Gloria Macapagal Arroyo on the sidelines of the two-day Association of Southeast Asian Nations summit that started Thursday.

Japan hopes to hold the initial FTA meetings in January, with the goal of completing them in around a year, according to a Japanese official who briefed reporters.

But the talks are sure to face several roadblocks, because Japan must open up its markets in the politically touchy farm and labor sectors if it is going to gain more access to Asian markets.

Japan, which has only one FTA, with Singapore, is accelerating efforts to clinch more. It recently resumed talks with Mexico after failing to meet the original goal for a basic agreement in October. Government-level talks with South Korea, capping years of preparatory steps, are to start later this month.

Compared with the Mexico and South Korea talks, negotiations with ASEAN nations could be even more challenging, as some will demand that Japan accept immigrants in exchange for an increased flow of industrial goods.

"There might be difficult issues, but the point is to start the talks," Thaksin was quoted by a Japanese official as telling Koizumi.

Thailand is keen to expand access of such farm goods as rice, chickens, sugar and starch. It is also interested in various service sectors, including hospitals and Thai massage. The Philippines is demanding Japan accept its nurses and caregivers.

The biggest point of contention with Malaysia, meanwhile, is the maximum 300 percent tariff it currently levies on Japanese cars.

The key in these talks will be whether Japan can resolve its oft-criticized lack of coordination on trade policy, observers said.

During marathon talks with Mexico in October, Japanese negotiators -- sent over from the Foreign Ministry, the Ministry of Economy, Trade and Industry and the agricultural ministry -- often sat on their hands on key proposals so they could take them back to their respective ministries for further consultation.

Japan will face an even bigger challenge coordinating its policy on labor issues, as the Health, Labor and Welfare Ministry and the Justice Ministry will join in.

"There should be a mechanism where negotiators can reach a conclusion right at the negotiating table," said Tsutomu Sugiura, director of Marubeni Research Institute, a think tank affiliated with the major trading house.

The ASEAN leaders also acknowledged Koizumi's decision to send Self-Defense Forces personnel to engage in reconstruction and humanitarian efforts in Iraq.

Koizumi stressed that the troops will not engage in combat, including U.S.-led operations to stamp out terrorists, according to a Japanese official.

"The cooperation of the international society is important," Arroyo was quoted as saying. "Therefore, we welcome Japan's involvement."

Thailand, Singapore and the Philippines have also dispatched troops and government officials to Iraq and its neighboring countries.

Malaysia's Abdullah, who opposes the U.S.-led coalition authority in Iraq, said Japan's decision will not affect relations with his nation.

"Although we have a certain opinion on U.S. activities, the decision of the SDF dispatch was made by Japan," Abdullah said.

But he added that international society should take part in Iraq's reconstruction efforts, with strong involvement from the United Nations.



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