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Tuesday, Oct. 26, 2010

India, Japan agree on broad trade deal

EPA will offset fallout from China; nuke pact pending


Staff writer

Prime Minister Naoto Kan and visiting Indian leader Manmohan Singh officially agreed Monday in Tokyo to activate an economic partnership agreement as soon as possible and to speed up talks on civilian nuclear cooperation.

The deal to strengthen economic ties between Japan and India, a fast-growing democratic nation with a population of 1.2 billion, comes at a time when Asian nations are becoming increasingly concerned about China's activities in the East China and South China seas.

"We were able to confirm and believe firmly in the deepening of the strategic global partnership between Japan and India," Kan said at a news conference after the summit. "We also confirmed that we will strengthen cooperation in the field of our security and economy."

Prime Minister Singh stressed the common fundamental values Japan and India share, including democracy.

"Our annual summits have set the pace and direction of this partnership, which rests on the firm foundations of the shared values of democracy, rule of law, and respect for fundamental human freedom," Singh said.

The two countries will continue working-level preparations for signing the EPA. Tokyo aims to sign it around the end of the year so it can be submitted to the Diet early next year for ratification, Japanese officials said.

Under the EPA, the two countries will abolish a wide range of tariffs on products ranging from car components and electronic goods to bonsai plants. Broader than a free-trade agreement, the EPA is a more comprehensive pact on economic and trade cooperation that also includes promoting investments.

"This is a historic achievement that signals the economic alignment of two of the largest economies in Asia," Singh said. "It will open up new business opportunities and lead to a quantum increase in trade and investment flows between our two countries."

Japan and India began discussing the possibility of a civilian nuclear energy deal in June that would allow Tokyo to export its nuclear power technology to New Delhi. But India is not a signatory member of the Nuclear Non-Proliferation Treaty, and it is unclear how soon the two nations can conclude a deal, given the strong antinuclear sentiment here.

According to a joint statement signed by the two leaders, Singh "reiterated India's commitment to a unilateral and voluntary moratorium on nuclear explosive testing."

Singh "expressed his understanding over the Japanese public sentiment, being a victim of a nuclear bomb, and we agreed to accelerate negotiations on the civilian nuclear cooperation," Kan said.

The two leaders also agreed to explore the possibility of bilateral cooperation on developing rare earth metals.

Japan relies heavily on China for the crucial metals and has been seeking alternatives ever since China apparently halted shipments to Japan over the Senkaku Islands spat. The isles are under the administrative control of Japan but are also claimed by China and Taiwan.

The EPA will eliminate tariffs on 94 percent of two-way trade in 10 years after the pact takes effect. The tariffs to be abolished include those on Japan's exports of car components, DVD players, video cameras, peaches and strawberries, while India would get better access to most industrial products, as well as be able to boost exports of durian, curry, tea leaves and shrimp.



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