Japan has agreed with Brunei in principle to liberalize bilateral trade, seeking to secure a stable energy supply from the resource-rich Southeast Asian country, the government said Thursday.
Japan and Brunei aim to seal the free-trade agreement and put it into effect during the first half of next year, it said.
Brunei is the eighth country with which Japan has reached an FTA. The Japan-Brunei accord came after only six months of talks, the shortest period for FTA negotiations so far held by Japan.
The seven other countries Japan have reached FTAs with are Chile, Indonesia, Mexico, Malaysia, the Philippines, Singapore and Thailand.
The latest agreement is expected to help accelerate Japan's FTA talks with the Association of Southeast Asian Nations as a whole. Brunei is a member of ASEAN.
Japan and ASEAN are seeking to conclude FTA talks next spring.
Imports and exports between Japan and Brunei totaled 263.9 billion yen in 2005. Almost 100 percent of Japan's imports from Brunei are natural gas and oil.
Under the accord, the two countries plan to set up a public-private panel on energy issues and to hold advance talks if Brunei decides to cut exports to Japan.
About 70 percent of Japan's exports to Brunei are cars and auto parts. Under the FTA, Brunei is to eliminate tariffs on most of those products within three years.