Koizumi vows to maintain Vietnam aid

Koizumi vows to maintain Vietnam aid

Steve Kirby, Agence France-Presse, Hanoi

Japanese Prime Minister Junichiro Koizumi has wrapped up a
weekend visit to Vietnam, pledging to protect Tokyo's large aid
program here from budget cuts, but rebuffing Hanoi's calls for
early trade talks.

Koizumi insisted the two governments should complete an
investment agreement safeguarding Japan's commercial interests
here before tackling the thorny issue of access for Vietnamese
goods, a senior aide told reporters.

Vietnamese Prime Minister Phan Van Khai agreed to complete the
investment talks launched last month by the end of the year, the
official said.

"The Vietnamese prime minister wished to have a bilateral
agreement not only on investment but also on trade.

"We said first it was better to conclude our negotiations for
an investment treaty, and then maybe after that there would be a
wider range of fields in which we would be able to cooperate.

"(Khai) said Vietnam wishes to conclude negotiations within
this year."

Like the European Union, Japan has been keen to ensure that
its firms suffer no disadvantage as a result of a landmark 2000
trade deal between Vietnam and former foe the United States.

But it has been reluctant to follow Washington down the trade
agreement path because of the thorny issue of agriculture.

Vietnam is the world's second biggest exporter of rice and a
significant supplier of other agricultural commodities, creating
a direct conflict with Japan's highly protected domestic farm
sector.

The Japanese official insisted Koizumi's rejection of early
talks did not imply any principled objection to a trade deal with
any southeast Asian country.

"It is true that generally speaking we have very large
problems in the agricultural field... We have to surmount the
difficulties which we face."

In its agenda for the visit, Tokyo had touted the Vietnam
investment deal as the "first concrete step" towards a
"comprehensive economic partnership" with southeast Asia which
Koizumi launched in a five-nation tour of the region in January.

But so far Japan has signed a trade agreement only with non-
farming Singapore. Negotiations with Thailand are still at an
early stage, the official acknowledged.

Koizumi even gave "no response" to a request from Khai for
greater interim access for Vietnam's three most important staples
-- rice, coffee and shrimps, the official said.

But he promised Tokyo would "continue or even increase" its
aid program here which accounts for more than 40 percent of all
official development assistance (ODA) to the communist state.

Already last year, Tokyo insulated Vietnam from a 10 percent
cut to its overall aid budget, actually increasing its pledge for
2002 by eight percent.

"(But) Mr. Koizumi did not forget to insist on our
government's wish that Japanese ODA money be used effectively,"
the official said.

Japan is also Vietnam's biggest trade partner with two-way
exchanges totaling US$4.72 billion in 2001. Total registered
capital of $5 billion made Japan Vietnam's third largest foreign
investor after Singapore and Taiwan.