Japan to draft Asian trade plan

Japan to draft Asian trade plan

Elaine Lies, Reuters, Tokyo

The Japanese government is set to begin drafting an action
plan to push for the signing of a comprehensive economic
cooperation accord with Southeast Asian nations, including a
free-trade agreement, media said on Monday.

The move appears to be at least partly in response to a recent
agreement between China and the Association of Southeast Asian
Nations (ASEAN) for a free-trade area within 10 years, action
which prompted speculation Japan may be losing Asian influence to
its giant neighbour.

According to government sources quoted by the daily Yomiuri
Shimbun newspaper, the plan would aim at concluding the economic
accord within 5 to 10 years.

Japanese Prime Minister Junichiro Koizumi departs on a
whirlwind tour of five ASEAN nations from January 9, and he is
expected to propose to their leaders that work on the action plan
begin as early as the end of January.

The sources were quoted as saying that Japan hopes to win
official approval for the plan at a Japan-ASEAN summit meeting
scheduled to be held in Cambodia next autumn.

The action plan is expected to specify what areas the accord
will cover, as well as lay down a timetable of negotiations, the
Yomiuri said.

Japan is also hoping to include provisions to improve the
investment environment between Tokyo and ASEAN, as well as
agreements on energy security and intellectual property rights.

No independent confirmation of the report was immediately
available, but Koizumi has hinted before that he was not totally
averse to the idea of a free-trade agreement.

Japan has been reluctant up to now to embrace such a plan,
which is likely to run into strong resistance from areas such as
the nation's protected agriculture sector in the face of a
possible flood of cheap Asian imports.

It has currently concluded only one free trade agreement, with
Singapore, as the core of an economic cooperation accord signed
in October.

However, Japan also hopes to avoid any diminishment of its
influence and leadership in Asia, which many observers feel may
face a significant challenge from China.

The contrast between economically robust China and Japan,
struggling with an economy in recession, were painfully evident
at the November gathering in Brunei of ASEAN leaders plus Japan,
China and South Korea at which the trade agreement was reached
with China.

Koizumi had to tell the group that Japan's main task was
improving its troubled economy, while China was buoyant following
a wave of triumphs that included entrance into the World Trade
Organisation and being chosen to host the 2008 Olympics.

However, in a news conference following the meeting, Koizumi
downplayed any fears that Japan would be left behind and appeared
guardedly positive about a free-trade agreement.