NUSA DUA, Indonesia – Leaders of Japan and the Association of Southeast Asian Nations agreed Wednesday to begin formal negotiations in early 2005 to establish a regional free-trade area by 2012.
Prime Minister Junichiro Koizumi and leaders of ASEAN member nations signed a framework for their comprehensive economic partnership after a gathering held on the Indonesian resort island of Bali.
A draft of the framework had been approved last month by economic ministers of both sides, following the leaders’ joint declaration in November expressing their political desire for such an alliance.
After a year of consultations on the liberalization of trade in goods, services and investment — especially the rules of origin — the economic partnership, including elements of a free-trade agreement, should be completed as soon as possible by 2012 for Japan and six of the 10 ASEAN members.
The leaders reaffirmed the economic levels and sensitive sectors of each country, including allowing an additional five years’ time for the newer ASEAN members to implement the partnership.
The six ASEAN members are Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. The less-developed newer members are Cambodia, Laos, Myanmar and Vietnam.
On trade liberalization, both sides had earlier confirmed that the partnership should be consistent with the rules and disciplines of the
World Trade Organization and would exclude no particular sector, including agriculture, which is politically sensitive in Japan.
The facilitation measures would include customs procedures, standards and conformance, and nontariff measures. Cooperation would be promoted in such fields as financial services, information technology, tourism and energy, according to their earlier agreement.
When realized in 2020, the economic partnership is expected to boost ASEAN’s exports to Japan by $20.63 billion, or 44.2 percent of those in the base year of 1997. Japan’s exports to ASEAN would also be increased by $20.02 billion, equivalent to 27.5 percent of that in the base year.
The alliance is expected to boost economic growth for ASEAN nations by 1.99 percent and 0.07 percent for Japan.
Japan and ASEAN have a combined population of 590 million — 11 percent of the world’s total — and a combined gross domestic product of $4.9 trillion, or 18 percent of global GDP.
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