Prime Minister Yoshiro Mori and visiting Singaporean Prime Minister Goh Chok Tong agreed Sunday to formally launch negotiations on a bilateral free-trade agreement in January and conclude the negotiations by the end of 2001.
In talks held at the Prime Minister’s Official Residence, the two leaders agreed that the talks would be based on a joint study compiled last month by a panel of experts that outlined key areas of the pact, a Foreign Ministry official said.
The new agreement with Singapore would mark a shift in Japan’s trade policy, which has long focused on engaging in multilateral trade frameworks, such as the World Trade Organization.
But with many countries engaging in regional FTAs amid the rapid globalization of the economy, the government decided that it is time for Japan to also engage in such regional trade agreements, the official said.
“The new agreement should cover a wide range of areas that would fit this new age (of globalization) and also complement the WTO framework,” the official quoted Mori as saying.
Goh, in reply, said he has felt that Asia was being too slow in concluding FTAs at a time when many countries in other regions have been striking such alliances.
Goh proposed setting the target date for conclusion of the new treaty as the end of next year, in order “not to lose (current) momentum,” the official said.
Mori agreed, saying: “It is not good to take a slow stance when things are moving very fast,” according to the official. He added that he himself wants to “actively engage in the negotiations,” the official said.
The two leaders also agreed to cooperate in pushing for an early launch of the next round of WTO negotiations on trade liberalization, the official said.
The joint study, compiled by government officials, academics and business representatives from the two countries, says the proposed FTA should not only cover traditional areas such as the removal of tariffs in goods and services, but also promote the flow of people, capital and information.
It recommends enhancing cooperation in financial services by such means as coordinating rules on capital markets, establishing common rules in electronic commerce, as well as training professionals and increasing their mobility between the two countries.
Goh said the agreement on e-commerce and other information technology-related areas should be made as soon as possible because progress in this area is rapid, the ministry official said.
The study also says the handling of Japan’s politically sensitive agricultural sector in the FTA should comply with the WTO rules, which require any such pact to “substantially cover all trade.”
But Japanese officials said farm trade will not be a major obstacle to the talks because agricultural, forestry and fishery products account only for 1.7 percent of bilateral trade, a major reason Japan chose to discuss an FTA with Singapore first.
The city-state is Japan’s ninth-largest trade partner, while Japan ranks third among Singapore’s trade partners. Singapore is also the base for many Japanese companies that operate in Southeast Asia.
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