Thailand, Japan to form trade pact

Thailand, Japan to form trade pact

Associated Press, Bangkok

Thailand and Japan agreed in principle Friday to create a free trade area within one year, a Thai government spokesman said.

The agreement was reached during 45-minute talks between visiting Japanese Prime Minister Junichiro Koizumi and his Thai counterpart, Thaksin Shinawatra. Koizumi arrived earlier in the day on a two-day official visit.

Government's spokesman Yongyut Tiyapairat said the cooperation, under the name Closer Economic Partnership, would cover all areas of trade and investments between the two nations. Many goods would also enjoy lower tariffs and non-trade barriers.

The free trade proposal would apparently bolster Japan's standing in the region following the November signing of an agreement to set up a free trade zone between Southeast Asian countries and China.

"We will soon extend our cooperation to the whole region. That simply means we have to work harder," Yongyut told a news conference. He said a working group will go to Japan to discuss the guidelines for the free trade area. He said no dates have been set.

Thailand is the second country after Singapore to agree on a free trade area with Japan.

It is Koizumi's first visit to Thailand since taking office in April. He is on the third leg of a five-nation tour of Southeast Asia, designed to galvanize ties with the region.

He has already made stops in the Philippines and Malaysia, and after Thailand, will visit Indonesia and Singapore. The other members of Asean are Brunei, Cambodia, Laos, Myanmar and Vietnam.