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ASEAN-Japan FTA: More talks but no progress?

Updated On: Apr 14, 2006

After eight months of stalled talks, Japan and the 10-member Association of Southeast Asian Nations continued formal negotiations in Tokyo on a free-trade agreement (FTA). This was the third series of talks after April 2005. Japan’s strategy was to first tap the ASEAN countries with the most advanced economies and then move on to an integrated FTA later. This strategy was viewed suspiciously by ASEAN as the member countries felt that it could divide their bargaining power and unity as a negotiation bloc. This could be an issue because Japan does not intend to sign bilateral FTAs with the remaining three less-developed ASEAN economies of Cambodia, Laos and Myanmar, but will offer various cooperation measures to them within the multilateral FTA negotiation framework. Japan has agreed to provide duty-free and quota-free market access following an accord at the World Trade Organization (WTO). Another possible stumbling block was Japan’s proposed plan to remove trade barriers on more than 90 percent of goods between the two sides. However, ASEAN proposed a 100-percent tariff cut in all of the goods from the grouping to Japan, while seeking some exceptions in goods from Japan. The third obstacle is that ASEAN, which has been in FTA talks with such countries as China, South Korea, Australia and New Zealand in addition to Japan, have created tariff-cutting frameworks in their respective negotiations. In those frameworks, the parties can unilaterally declare a limited number of items to be excluded from trade liberalization so that politically sensitive goods would be immune to drastic tariff reductions. But, Japan does not want to adopt this practice and instead is seeking to discuss tariff elimination of each item by exchanging requests and offers. After two days of talks, the proposed ASEAN-Japan FTA ended with no major progress on outstanding issues, according to the Vietnam state press. However, ASEAN and Japan did agree on the need to hold a workshop in June for further brainstorming. ASEAN members will provide feedback to the FTA negotiations during the workshop, in particular to the requests put forward by the Japanese side. To achieve the goal of concluding the FTA talks in March next year, the two parties also reached an accord to hold official negotiations every two months in principle. Japan has also put on table proposals for cooperation programs for capacity building in ASEAN and intellectual property rights protection (IPR). There is also a possibility that Japan and the regional body could hold the fourth round of official FTA negotiations by the end of June somewhere in ASEAN states. Sources: ASEAN, Japan hope to ink FTA by early '07 (Japan Times, 11 April 2006) Japan-ASEAN FTA talks end without major progress (Vietnam News Agency, 12 April 2006) Japan, ASEAN talk FTA negotiation format, to hold workshop in June (Japan Economic Newswire, 11 April 2006) Japan, ASEAN Agree to Speed Up FTA Talks (Jiji Press, 11 April 2006) Japan to Be Less Demanding on FTAs with Myanmar, Cambodia, Laos (Jiji Press, 10 April 2006)