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Japan and Singapore should conclude a comprehensive bilateral free-trade agreement that covers cooperation in electronic commerce and financial services and the smooth flow of people, according to a report released Friday.

Government officials, academics and private-sector representatives from the two countries submitted the report they compiled on the feasibility of a bilateral FTA to Prime Minister Yoshiro Mori, government officials said. The report outlines the principle and scope of the proposed agreement.

The two governments will start official negotiations based on the report after Mori and Singapore Prime Minister Goh Chok Tong declare the opening of official talks this fall, the official said.

The report dubs the proposed agreement the Japan-Singapore Economic Agreement for a New Age Partnership, reflecting the joint study group’s view that the FTA should go beyond the scope of traditional FTAs and also promote the flow of people, capital and information.

Traditional FTAs usually focus on goods and services.

The report states the importance of promoting the movement of professionals between the two countries as well as of employing and training people to a professional level — including those from third countries — both by Japanese companies operating in Singapore and Singaporean firms in Japan.

The study group also advised that the FTA should cover issues including the removal of tariffs, mutual recognition, the liberalization of services and the simplification of customs and other trade-related procedures.

The report also states that the handling of the agricultural sector should comply with the rules of the World Trade Organization, which require any FTA to “substantially cover all the trade” between signatory countries. This is qualified, however, by mention that “due consideration” should be given to the issue, taking into account that the liberalization of agricultural trade is a politically sensitive issue in Japan.

“The group members hope that the two governments will find a solution that satisfies both parties during official negotiations,” a Foreign Ministry official said, adding that agricultural, forestry and fishery products accounted for only 1.7 percent of trade between Japan and Singapore in 1999. The study group also proposed strengthening bilateral cooperation in financial services, while recommending cooperation in the fields of telecommunications and electronic commerce, including the protection of personal data.

The report states that the two governments should aim to start official negotiations in January 2001 and conclude the agreement at the earliest time without losing momentum.

Japan currently has no free-trade agreements, which is rare for a developed country. Besides Singapore, FTAs with South Korea and Mexico have been proposed.

While Japan has traditionally focused on multilateral frameworks such as the General Agreement on Tariffs and Trade and its successor, the World Trade Organization, Tokyo now regards bilateral and regional FTAs as a means of complementing these frameworks, the official said.

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