• Bloomberg, Kyodo, Staff Report


Prime Minister Shinzo Abe and Russian President Vladimir Putin on Friday agreed to hold a summit in Nagato, Yamaguchi Prefecture, in December where they are expected to finalize some Japanese economic proposals and continue talks on the fate of four Russia-held islands off Hokkaido that have held back bilateral ties for decades.

“I believe the development of the Far East region, with its big potential, is Russia’s top priority issue,” Abe said at the outset of the meeting on the sidelines of the Eastern Economic Forum in the Pacific port city of Vladivostok .

“The growth of the Asia-Pacific leads the global economy. Japan, as Russia’s neighbor, will promote Japan-Russia cooperation in the region strongly,” Abe said.

“It is important that the governments support the initiatives of the private sector,” Putin said.

The summit in Nagato, Abe’s home constituency, will be held on Dec. 15, preceded by another bilateral meeting in November at the annual Asia-Pacific Economic Cooperation conference in Peru.

Russian Foreign Minister Sergey Lavrov said the two leaders would continue talks on the territorial row and publicize the results before year’s end.

At the meeting, Abe was to offer a comprehensive energy aid package, including oil and natural gas development in the Far East and East Siberia, and technology exchanges for decommissioning nuclear power plants, the Nikkei business daily reported Friday. The trade ministry is also considering offering up to ¥1 trillion in funding for Russia’s state-run oil company Rosneft, it said.

Ahead of the summit, Putin, in an interview Thursday, struck a conciliatory tone on the territorial row that has prevented the countries from inking a World War II peace treaty.

Resolving the conflict over four islands occupied by the former Soviet Union in the final days of the war should be part of “setting the stage for the development of intergovernmental relations for the long term,” Putin said in an interview as he prepared to meet Abe at the forum. “We’re not talking about some exchange or some sale, we are talking about finding a solution where neither of the parties would feel defeated or a loser.”

Russia is seeking warmer relations with Japan to woo investment as progress on deepening business ties with China has stalled. The two leaders are discussing the islands, called the Northern Territories by Japan and the Southern Kurils by Russia, for the second time this year after Abe met with Putin in the Black Sea resort of Sochi in May, snubbing an appeal by U.S. President Barack Obama not to visit. Putin plans to travel to Japan in December, the Kremlin said Tuesday, though that could not be confirmed.

Trade with China, Russia’s biggest single partner, contracted 28 percent to $63.6 billion last year, compared with the countries’ joint target of $100 billion. Turnover with Japan, Russia’s eighth-largest partner, declined by almost 31 percent to $21.3 billion, with commodities accounting for more than three-quarters of Russian exports by value, according to the customs service in Moscow.

While “we don’t trade in territories,” Russia “would very much like to find a solution to this problem with our Japanese friends,” Putin said. If it “can reach a similarly high level of trust” with Japan as it now enjoys with China “then we can find some sort of compromise,” he said.

James Brown, an associate professor at Temple University in Tokyo who published a book this year on the territorial dispute, said Putin’s comments suggested “the status quo suits Russia quite well.”

“While he’s happy to keep talking, he’s in no rush to reach any conclusion,” Brown said by phone.

A 1956 treaty signed by the Soviet Union and Japan almost resolved the dispute until “the Japanese side refused to adhere to it and then the Soviet Union basically nullified” the deal, Putin said. “I don’t think it’s closer than in 1956 but, in any case, we resumed a dialogue on this subject.”

Meanwhile, Japanese officials are revisiting an idea to call for the initial return of Shikotan and the Habomai islets, the smallest of the four islands while simultaneously continuing talks on the fate of the two remaining islands — something Tokyo first mooted 15 years ago.

The so-called “two-track” approach was reportedly proposed in March 2001 by then-Prime Minister Yoshiro Mori to Putin.

Taking advantage of an eight-point Japanese economic cooperation proposal, Abe is seeking to urge Moscow, which apparently aims to end the discussion by returning only the two islands, to change its attitude, the sources said.

“The 1956 Japan-Soviet Joint Declaration that specifies the handover of the Habomai (islet group) and Shikotan is the starting point for negotiations. Prime Minister Abe has already conveyed his intention to seek to resolve (the issue) based on the declaration to Mr. Putin,” said one of the sources, referring to the declaration that stipulates Moscow will return the two islands after concluding a peace treaty with Japan.

Another source also said Kunashiri and Etorofu are unlikely to be returned to Japan soon, as Russian troops are stationed on them.

The Soviet Union occupied the islands shortly after Japan surrendered in World War II in 1945.

During Friday’s talks, the two leaders were expected to discuss Japan’s eight-point economic cooperation plan presented to Putin in May, with Tokyo hoping such an offer will prompt the Kremlin to soften its stance in the territorial dispute.

In a rare break with diplomatic protocol, Abe’s trip to Vladivostok is his fourth consecutive visit to Russia without a reciprocal visit by the Russian leader to Japan since April 2013, when Abe became the first Japanese prime minister to officially visit Russia in 10 years and agreed with Putin to revive territorial talks.

Meanwhile, the Foreign Ministry in Tokyo said Thursday that 42 percent of Russians surveyed said both Tokyo and Moscow should mutually agree on the future of the four islands, up from 32 percent in the previous poll in 2010.

The latest telephone survey conducted between March and April covered 3,600 Russians nationwide aged 18 or older, according to the ministry.

After the talks, Putin will follow the Abe meeting with a trip to the Group of 20 summit in Hangzhou, China.

He’ll be eager to show that Russia hasn’t been left isolated by U.S. and European Union sanctions over the crisis in Ukraine, which together with the collapse in oil prices tipped his country into its worst recession in two decades.

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