Malaysia, Japan on course for FTA pact

Malaysia, Japan on course for FTA pact

Agence France-Presse, Tokyo

Malaysia's prime minister in waiting said Friday his country is on course to forge a free trade agreement (FTA) with Japan as it is determined to maintain its "Look-East" policy of learning from the rest of Asia.

"The (FTA) talks are progressing very well," Malaysian Deputy Prime Minister Abdullah Ahmad Badawi told a news conference here. "There has been no difficulty."

Abdullah said he expects a "positive" result from a third round of Malaysia-Japan FTA talks in September, involving a study group which has been expanded to include government officials, private-sector representatives and academics.

Japan set up its first-ever FTA in November 2002, with Singapore, and is working on similar pacts with other members of the Association of Southeast Asian Nations (ASEAN) as well as South Korea and Mexico.

Abdullah said the progress of Malaysia's FTA talks with Japan is "going faster" than that of the Thailand and the Philippines.

Abdullah has been tapped by the ruling United Malays National Organization (UMNO) party to succeed Prime Minister Mahathir Mohamad in October.

Dubbing it an "over-arching policy," Abdullah said Mahathir's two-decade-old Look-East policy would "remain a very important basic policy" for Malaysia with any adjustments necessitated by changing circumstances.

Mahathir, 77, who pledged last year to retire after 22 years in power, has pioneered the policy to adopt eastern labor ethics, morale and management practices to spur Malaysia's economic and social development.

Abdullah said he agreed with Japan's Finance Minister Masajuro Shiokawa to press for the establishment of an Asian bond market "as soon as possible" when they met on Thursday.

He added that there was debate over which currency should lead the proposed Asian bond market.

Business leaders are considering a "multi-currency" bond market, Abdullah said, adding that the original concept of the scheme was to have the "most popular, strongest and most stable currency" play a central role.

In October, Thailand first floated its idea of an Asian bond market where Asian countries voluntarily contribute one per cent of their reserves to a fund to purchase Asian bonds, a scheme that could be immune to currency speculation and capital flight.

Asked about the possibility of introducing a single Asian currency modeled on the euro, Abdullah said: "Maybe it's a little bit too early to have that; there has been much talk about the yen as a (pan-) Asian currency."