The leaders of Japan and Australia agreed Wednesday on the necessity of five-nation talks on the North Korean nuclear issue and the importance of liberalizing bilateral trade.

They also said “dialogue and pressure” are needed to resolve the North Korean nuclear standoff.

During their meeting, Prime Minister Junichiro Koizumi and visiting Australian Prime Minister John Howard signed a joint statement on antiterrorism measures and an economic framework agreement aimed at boosting bilateral trade in the areas of food, information technology and customs cooperation.

Under the economic framework agreement, the two countries will set up a joint committee chaired by deputy ministers and launch a joint study group to examine the pros and cons of opening up bilateral trade and investment. The group will study the possible effects liberalization will have on such fields as goods, services and investment.

The group will wrap up discussions within two years after also studying issues like government procurement and competition policy.

Although Australia reportedly hoped to begin negotiating a bilateral free-trade agreement, Japan was reluctant to do so as the two nations are at loggerheads over agricultural tariffs, mainly on rice, in ongoing World Trade Organization talks.

In a meeting with Foreign Minister Yoriko Kawaguchi earlier in the day, Howard stressed the need to pressure North Korea by, for example, reinforcing vessel inspections. At the same time, however, peaceful solutions should be sought through diplomatic means, Japanese officials quoted Howard as saying.

Australian authorities raided a North Korean ship off Australia’s coast in April for allegedly smuggling 50 kg of heroin.

“I believe balance (between dialogue and pressure) is important,” Kawaguchi was quoted as saying.

The meeting took place amid intense efforts by Japan, South Korea, the United States and China to urge North Korea to resume dialogue soon.

Howard told Kawaguchi that the abduction of Japanese nationals by North Korean agents was an unbelievable act and that Australia shares Japan’s anger over the issue, the officials said.

Howard also protested Japan’s move to increase tariffs on imported beef from 38.5 percent to 50 percent beginning Aug. 1. But Kawaguchi said it is unlikely Japan will reconsider its decision.

Under a 1993 WTO safeguard, Japan can increase tariffs if there is a sharp year-on-year increase in imported beef on a cumulative quarterly basis.

Beef imports surged in the April-June quarter after plummeting in the same period last year due to the discovery of bovine spongiform encephalopathy, or mad cow disease, in Japanese cattle in September 2001.

Howard also requested Japan’s support for Australia’s planned dispatch of 2,000 troops to the Solomon Islands, saying that financial assistance from Japan would help resolve the ethnic dispute there. Kawaguchi said she will consider the matter.

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