Koizumi pledges aid but rebuffs Vietnam on trade
HANOI - Japanese Prime Minister Junichiro Koizumi concluded a visit to
communist Vietnam on Sunday, pledging to maintain or even boost aid but
rejecting Hanoi's overtures for a trade pact.
Koizumi, who visits East Timor on Monday to meet Japanese soldiers that are
part of a U.N. peacekeeping operation, is on a week-long tour of the region
aimed at boosting Japanese influence in the face of mounting competition
from China.
Vietnam's Prime Minister Phan Van Khai hailed the visit as a new stage in
relations based on a long-term "reliable partnership" and said Hanoi
supported Japan's inititive to boost ties with the Association of South East
Asian Nations (ASEAN).
Koizumi called their countries "sincere friends in Asia".
But while pledging to maintain and even expand high levels of aid in his
talks with Khai, Koizumi made clear Japan was not ready to pursue a
Vietnamese proposal for a trade pact that would give greater access for
Vietnamese farm products.
Investment treaty first
A senior Japanese government official said Koizumi did not respond when Khai
expressed Hanoi's wish to export more rice, shrimps and coffee to Japan.
While Japan "did not exclude the possibility" of a trade pact in future,
Tokyo's view was that it would be better to conclude an investment treaty it
has been pressing for, then look for other areas of cooperation, he said.
Japan is seeking a treaty that would guarantee it equal market access to
that secured by the United States under a historic pact that took effect
last year.
The Japanese official said Koizumi stressed Hanoi needed to improve the
business environment if it wanted more Japanese investment. He said Khai
replied that Hanoi wished to conclude negotiations on the investment treaty
by the year-end.
Vietnam is the sixth ASEAN country Koizumi has visited this year, an
illustration of Japan's concerns about an agreement between China and the
10-member bloc to work for a free-trade area within 10 years.
Agriculture difficult
Japan appeared to be offering little in the way of reciprocal access for
farm goods any time soon.
The Japanese official said agriculture remained "difficult" for Japan, given
its powerful, high-cost farm lobby.
"We have to surmount the difficulties we face, but beyond that we were not
in a position at this juncture, at this moment in time, to get into this
problem more in more detail," he said.
Koizumi's response illustrates the problems Japan now faces in its economic
ties with ASEAN countries -- many of which are reliant on commodity
exports -- even as Chinese presses ahead with a plan to secure closer trade
ties with the bloc.
While developing ASEAN states like Vietnam need and welcome Japanese
investment, they want more access for their farm products in return for
opening up their markets to Japan's goods.
Japan did reach a free trade agreement with ASEAN member Singapore in
January, but it is a rich city state and not a major agricultural exporter.
Japanese officials said Tokyo wanted to deal bilaterally with ASEAN members
on trade and preferred to negotiate issue by issue.
In Singapore on Friday, Chinese Vice President Hu Jintao and Singapore Prime
Minister Goh Chok Tong agreed on the need for a quick start to talks on a
free trade area.
At the same time, Goh noted ASEAN concerns about the fast-growing Chinese
economy, which has been sucking up the lion's share of foreign investment
flows in Asia.
Visiting Vietnam earlier this month, Takashi Imai, chairman of Japan's
powerful Federation of Economic Organisations, said Japanese firms intended
to maintain their investment emphasis on ASEAN, even as European and U.S.
firms shifted theirs to China.
After leaving Hanoi, Koizumi will make an overnight stop on the Indonesian
island of Bali before flying to East Timor. He is due in Australia on
Tuesday and New Zealand on Thursday before flying back to Tokyo on Friday.
By David Brunnstrom - Reuters - April 28, 2002
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