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July 24, 2008

Japan, Asean reaffirm plan for FTA
Japan reaffirmed with the 10-member Asean on Wednesday their aim for a comprehensive free trade agreement to take effect by the end of this year, and gave assurances that preparations are under way to appoint an ambassador to Asean once the group's landmark charter is ratified.

At ministerial talks in Singapore, Japanese Foreign Minister Masahiko Komura also told his counterparts that Japan will provide an additional stockpile of the antiviral drug Tamiflu that could treat 500,000 people to be distributed to members of the Association of Southeast Asian Nations, a Japanese Foreign Ministry official said.

The provision will double Japan's total contribution of Tamiflu to Asean to help prevent a pandemic in the region, which is vulnerable to deadly strains of bird flu. The earlier stockpile of the drug is being stored in a warehouse in Singapore.

"Japan would like to work with Asean for the FTA to take effect as soon as possible before the end of this year," Komura was quoted as saying at the meeting, which was part of a series of annual talks hosted by Asean with its key dialogue partners this week.

The Asean ministers expressed hope of further cooperation with Japan and welcomed Tokyo's promise to appoint an ambassador, the official said.

"The growth of cooperation and support from Japan for Asean has been phenomenal," Asean Secretary General Surin Pitsuwan said. "Japan is still the largest supporter of Asean integration in Asean community building."

Malaysian Foreign Minister Rais Yatim said he urged Japan at the meeting to continue to play a role in keeping the Malacca Straits a "peaceful passage." In particular, he noted at a news conference that Japan, along with South Korea, is "technically well advanced" in providing help such as on early warning systems for tsunami.

The Asean-Japan Comprehensive Economic Partnership Agreement, Japan's first FTA with a regional bloc, is to come into force on the first day of the second month after Japan and at least one of the 10 Asean members complete domestic procedures to ratify it. Japan's parliament endorsed it on June 21.

Foreign ministers of Cambodia, Indonesia, Laos, Malaysia and the Philippines took part in the meeting with Komura, while ministers of the other five Asean countries attended similar talks with Australia held concurrently on Wednesday morning.

Japan has been eager to catch up with China and South Korea amid an intensifying race for regional FTAs. The accord with Asean is not only an FTA for goods but also covers services and investment.

It will enable Japanese companies that are expanding their markets in Southeast Asia to reduce trade costs. For example, tariffs on Japanese exports from one ASEAN country to another will be removed.

In particular, electronics and automobile manufacturers will also benefit as parts from various countries in the region can be assembled without tariffs being levied.

Japan will repeal tariffs on 93 percent of imports from Asean by value within 10 years of the deal taking effect. Meanwhile, six major Asean members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- will eliminate tariffs on 90 percent of imports from Japan such as automobiles within 10 years.

A more gradual tariff elimination table has been set for the remaining four Asean members with smaller economies -- Cambodia, Myanmar, Laos and Vietnam.

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