• Kyodo

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Japan and the Association of Southeast Asian Nations will start negotiations next year to bolster economic ties, with discussions expected to include the creation of a regional free trade area, according to an internal document.

A copy of the report, compiled by the Japan-ASEAN Closer Economic Partnership Experts Group, was obtained by Kyodo News on Saturday. It says the envisaged partnership would cover not only trade and investment but information technology, the environment and energy.

It would also enhance mutual cooperation in such fields as competition policy, small and medium-size enterprises, industrial standards, intellectual property and statistics, the report says.

The report is to be submitted at a meeting of Japanese and ASEAN economic ministers in Brunei’s capital on Friday. It demonstrates that the alliance, if realized, would increase gross domestic product by 1.99 percent for ASEAN and 0.07 percent for Japan.

Export volume from the 10-member ASEAN to Japan would shoot up 44.2 percent while the figures from Japan to ASEAN would increase 27.5 percent, according to the report.

“In the event of ASEAN and Japan realizing a CEP that covers a wide range of areas for economic cooperation, including elements of an FTA, it is expected that there would be significant economic effects on the economies of both ASEAN and Japan,” it says.

Japan and ASEAN have a combined population of 590 million, or 11 percent of the world’s total, and a combined GDP of $4.9 trillion, or 18 percent of global GDP.

The planned initiative appears to be an attempt by Japan to compete with China, which is expected in November to seal a framework agreement with ASEAN for a 10-year FTA.

As the first step toward the creation of the CEP, Japan and ASEAN will establish a committee comprised of government officials from both sides to consider a framework providing a basis for concrete plans and contents ahead of a Japan-ASEAN summit in fall 2003.

The CEP Experts Group, which held its fifth round of talks from Wednesday to early Friday, left the target date for completing negotiations to their economic ministers.

Its report puts down two possible options, with one suggesting the talks should be concluded “within 10 years” and the other indicating the negotiations “shall not go beyond 20XX.” The target date was not specified.

The report says the CEP would have “substantial sectoral coverage” and not exclude any particular sector as a whole. The liberalization of Japan’s agricultural sector is a politically sensitive issue at home.

During past CEP talks, the Japanese side repeatedly said a Japan-ASEAN FTA would not exclude the agricultural sector. But it also called on ASEAN to wait until the end of the ongoing multilateral trade negotiations under the World Trade Organization for any commitment in the sector.

Under the CEP initiative, Japan and ASEAN will also look into developing regional “Mega Projects” as part of efforts to strengthen their economic relations.

“With a view to enhancing the economic partnership further, it is also important to explore possible areas for large-scale cooperation projects, or Mega Projects, between ASEAN and Japan,” the report says.

Although the report does not elaborate on the projects, some officials said they had preliminary discussions on exploring the formation of an aerospace consortium between Japan and ASEAN that would be similar to Airbus. The creation of an Asian television network along the lines of the U.S. cable TV network CNN was also mentioned.

Japan and the ASEAN countries would pool resources and expertise in their new partnerships if any large projects are accepted, officials said.

ASEAN consists of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

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