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Koizumi tells forum Japan seeks free trade pacts

"I am fully resolved to fulfil these [structural]reforms for the sake of both Japan and all of Asia." Junichiro Koizumi, Japanese prime minister PHOTO: AP

Japanese Prime Minister Junichiro Koizumi said yesterday that Japan would promote free trade pacts, an area where Asia's biggest economy has lagged behind fast-growing China due to opposition from farmers.

His comments are the latest sign of Japan's efforts to step up economic ties in Asia in the wake of China's agreement last November with ASEAN to establish a free-trade area within 10 years.

Speaking at the Boao Forum for Asia, Koizumi emphasized his commitment to painful economic reforms.

Koizumi aims to use the Boao Forum to soothe concerns over competition posed by a weaker yen and ease tensions with Beijing as the two Asian giants prepare to mark the 30th anniversary of diplomatic ties, analysts say.

In his first major speech on Tokyo's Asian policy since an address in Singapore in January -- in which he called for closer economic ties with ASEAN -- Koizumi said Asia needs to tackle challenges such as carrying out reforms and boosting cooperation.

He said he realized it was vital for Asia that Japan, which accounts for 60 percent of Asia's GDP, succeeds in structural reforms including the final disposal of non-performing bank loans over the next few years, and revives its struggling economy.

"I am fully resolved to fulfil these reforms for the sake of both Japan and all of Asia," Koizumi said.

Koizumi noted he had signed a ground-breaking free-trade agreement with Singapore during his regional tour in January and added that Tokyo would be seeking more.

"In the future, Japan will promote economic partnership or free trade agreements with other countries and sub- regions," he said.

Japanese officials said this was the first time Japan had publicly stated it would actively pursue FTAs, which have met with strong opposition at home from protected sectors such as farming.

In addition to the free trade pact with Singapore -- which has no significant agricultural exports -- Koizumi said Japan would study the possibility of separate free trade pacts with South Korea and Mexico.

While the government intends to promote such free trade deals in coming years, protecting domestic farmers, whose votes are vital to ruling Liberal Democratic Party members, remains a sensitive political issue in Japan.
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