Japan urges caution on trade liberalization

Japan urges caution on trade liberalization

TOKYO (AFP): Japan's largest business group opposes rapid liberalization of trade and investment in the Asia-Pacific region and is also cautious towards Malaysia's idea for an East Asian Economic Caucus (EAEC).

In a report to be adopted Friday, the Japan Federation of Economic Organizations (Keidanren) said the Asia-Pacific Economic Cooperation (APEC) forum should "deeply consider" the particular situation of each member country.

The Keidanren's interim report on regional trade comes just three months after leaders of the 18-member group met in Indonesia and called for the achievement of free trade in the region by 2020.

Its release also coincides with a series APEC meetings in the southern Japanese city of Fukuoka and comes only days before a trade mission headed by Keidanren chairman Shoichiro Toyoda, also the chairman of Toyota Motor Corp., leaves on a tour of Southeast Asia.

In the report, Japan's most influential business group called for "mutual understanding" between the 18 members of APEC before liberalizing trade and investment. "It is not wise to call on governments to hurriedly introduce such a system," the federation said.

The Keidanren also warned governments against seeking private- sector contributions for APEC projects.

"We should avoid any compulsory measures being applied to the private sector," the report said.

The group also urged APEC to offer most-favored-nation (MFN) status to nations outside the region without any conditions.

"Countries in other regions will regard APEC as protectionist if we attach conditions on MFN status," the report said.

EAEC

The group showed a cautious stance towards Malaysia's controversial EAEC proposal, despite recent indications that Toyoda supported the idea.

"Japan needs to closely monitor future developments on the issue and watch the response of other nations," the business group said, using language strikingly similar to that used by fence-sitting bureaucrats.

The United States has repeatedly expressed its opposition to the EAEC proposal made by Malaysian Prime Minister Mahathir Mohamad four years ago.

The Japanese government has yet to support or reject the proposal, although foreign ministry officials say the idea should have the support of all APEC members and avoid drawing a line between two sides of the Pacific.

Keidanren officials said last month that the business group was unlikely to reach a consensus on whether to endorse the Malaysian plan for several months.

Toyoda is scheduled to leave next week on a tour of Singapore, Thailand and Vietnam. A second Japanese trade mission to Brunei, Indonesia, Malaysia and the Philippines is scheduled for April.

In the report, the Keidanren also urged the Japanese government -- the current chairman of APEC ahead of this year's summit in Osaka -- to deregulate financial services further and take the initiative in APEC economic programs.

The call coincides with meetings of APEC's economic committee and its trade and investment committee in Fukuoka this week. These will be followed by a three-day meeting of senior APEC officials next week, the first of a series of high-level talks ahead of the annual meeting and summit in Osaka in November.

APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, the Philippines, Singapore, Taiwan, Thailand and the United States.