JOC 27/8/07

Japan and the Association of Southeast Asian Nations (Asean) have reached a free-trade agreement to eliminate import tariffs on more than 90 percent of goods traded between them by value.

The agreement came during a meeting between Japanese economic minister Akira Amari and his counterparts from the 10 Asean nations in Manila on Saturday. The agreement is expected to be signed by top Japanese and Asean leaders during a meeting in Singapore in November and then to take effect next spring.

The pact will be the first that Japan has concluded with a regional bloc.
Asean groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Trade between Japan and Asean totaled 16.4 trillion yen (about $141
billion) in 2005, making Asean Japan's third-largest trading partner after the United States and China. Japan estimates that liberalizing trade with the group will help expand Japan's gross domestic product by 1.1 trillion to 2 trillion yen.

Under the accord, Japan will eliminate tariffs on 90 percent of imports by value immediately after it takes effect. Of the other 10 percent, Japan will repeal the 3-percent portion within 10 years and lower tariffs on 6 percent. The remaining 1 percent, which includes some farm products like rice, sugar and dairy goods, has been excluded from the deal.

Six major Asean members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- will eliminate tariffs on 90 percent of imports from Japan within 10 years in terms of both value and the number of items.

A more gradual timetable has been set for the less developed members -- Cambodia, Myanmar, Laos and Vietnam.