Press Briefing 11 December 2003

Bilateral meetings of Prime Minister Junichiro Koizumi and Minister for Foreign Affairs Yoriko Kawaguchi

Press Secretary Hatsuhisa Takashima: Good afternoon everyone and thank you very much for coming to the briefing. My name is Hatsuhisa Takashima and I am the Press Secretary of the Ministry of Foreign Affairs of Japan. I would like to give you a briefing on an on-the-record basis of the bilateral meetings that Prime Minister Junichiro Koizumi has had with five leaders of Association of Southeast Asian Nations (ASEAN) countries and also one bilateral meeting Minister for Foreign Affairs Yoriko Kawaguchi had with her counterpart from Malaysia.

Start of negotiations on economic partnership agreements (EPA) with ASEAN countries

Mr. Takashima: We have already distributed the joint announcement or statement on the initiation of negotiations on the economic partnership agreements (EPA) with Malaysia, Kingdom of Thailand and the Republic of the Philippines. This joint statement is one crowning product of the bilateral talks which Prime Minister Koizumi had with those three leaders.

Let me touch first upon this EPA agreement. Japan has been conducting preliminary talks with Malaysia, Thailand and the Philippines on the possibility of the initiation of a free trade agreement (FTA) or we would call it an EPA, and finally this morning when Prime Minister Koizumi met separately with firstly the Prime Minister Abdullah Haji Ahmad Badawi of Malaysia and then Prime Minister Thaksin Shinawatra of Thailand and then President Gloria Macapagal-Arroyo of the Philippines. They all agreed that the start of official negotiations of the EPAs was important for each of them and they agreed that they would try to reach agreement at the earliest possible date.

Indeed, Japan has been intending to have an overall EPA with all ASEAN nations within ten years' time and we already had an EPA signed January last year with Singapore. Reviewing the result of this economic partnership with Singapore, Prime Minister Goh Chok Tong of the Republic of Singapore and Prime Minister Koizumi this morning agreed that the economic partnership has truly worked well for the promotion of better, deeper and wider economic relations between Singapore and Japan.

Indeed, since the signing of this EPA between Japan and Singapore, Japan's imports from Singapore have increased 30 percent so far, and investment both ways has been increasing. Despite the fact that the economy in Southeast Asia slowed down because of Severe Acute Respiratory Syndrome (SARS) and also the economic slowdown of Japan, the EPA between our two countries has worked so well. Therefore, Japan expects that with this initiation of official negotiation with three countries in ASEAN, the economic relations between Japan and ASEAN would be enlarged when the agreements are signed and the economic partnership would be further promoted.

For your information, I can give you some statistics. Trade between Japan and ASEAN as far as Japan is concerned is the second largest behind that of Japan and the United States. The annual total amount of trade between Japan and ASEAN exceeds US$120 billion or 13 trillion yen. Of that, 95 percent of the volume of trade between Japan and ASEAN are done between Japan and five major countries of ASEAN or the original five countries of ASEAN, namely Thailand, Singapore, Philippines, Malaysia and Indonesia. The three countries with which Japan today agreed to start the commencement of negotiation of EPAs, namely Thailand, the Philippines and Malaysia, the trade between Japan and these three countries accounts for about 75 percent of the total trade between Japan and ASEAN.

Therefore, we believe that with the possible future commencement of negotiation with Indonesia, of which President Megawati Soekarnoputri and Prime Minister Koizumi basically agreed, as soon as the current preliminary talks are concluded and with the already working agreement with Singapore, Japan believes that the overall EPA with all ASEAN countries would become more possible and more workable.

Difference between EPA and free trade agreements (FTA)

Mr. Takashima: More information that I think I should share with you is the difference between EPA and FTAs. If you read the text of the statement distributed to you on today's agreement, it says something on that but basically FTAs are part of EPAs. EPAs are not necessarily limited to trade and investment, but also include other economic activities such as tourism, the standardization of regulations and intellectual property among other things. So it covers a wider range of economic relations and we hope that this concept of having wider economic relations between Japan and ASEAN countries would enhance the possibility of forming what we envisage as an East Asian community in the future which may include the People's Republic of China, Republic of Korea and even Australia or New Zealand.

Issues discussed at bilateral meetings between Japan and the five countries

Mr. Takashima: Among others, the bilateral talks with the five leaders which Prime Minister Koizumi had, I should give you some of the issues discussed between the leaders.

Firstly, with Prime Minister Abdullah of Malaysia, Prime Minister Koizumi discussed the further progress in creation of the Malaysia-Japan International University on Technology, which is a joint project which the Japanese Government and the Malaysian Government have been promoting, and the Japanese group of scholars are now in Malaysia to discuss with their counterparts in Malaysia the formulation of curricula for this very ambitious project of setting up an institute of technology to be used by not only Malaysia but all ASEAN countries.

With the Prime Minister Goh Chok Tong of Singapore, Prime Minister Koizumi discussed the current results of the EPA and also the importance of having tighter and deeper economic relations between the two countries.

With Prime Minister Thaksin Shinawatra of Thailand, Prime Minister Koizumi promised him that Japan would continue the regional development program, especially in the Mekong Delta region which includes not only Thailand but also the Kingdom of Cambodia, Union of Myanmar and the Lao People's Democratic Republic, and which would contribute to narrowing the economic gap between Thailand and the three neighboring countries.

Prime Minister Koizumi and Prime Minister Thaksin also agreed that the promotion of the partnership agreement between Japan and Thailand for the empowerment of officials as well as trainers of various sectors should be promoted further, and the two also agreed to have close consultation on Myanmar issues in order to resolve this issue as quickly as possible.

With Sultan Haji Hassanal Bolkiah of Brunei Darussalam, Prime Minister Koizumi emphasized the importance of the promotion of tourism between our two countries and Prime Minister Koizumi also said that he expected the various events to be held next year, since next year would be the 20th anniversary of the commencement of diplomatic relationship between our two countries

With President Arroyo of the Philippines, Prime Minister Koizumi praised the Philippines' effort to fight against terrorism and promised that Japan would extend as much support as possible for this cause.

Japan's dispatch of Self-Defense Forces (SDF)

Mr. Takashima: Prime Minister Koizumi pointed out that the Japanese Government recently decided to dispatch the Self-Defense Forces (SDF) and also civilians to Iraq for the assistance of Iraqi reconstruction and rehabilitation work, and he emphasized that this dispatch of the SDF is not intended to conduct any sort of combat or fighting but simply to assist the reconstruction work.

He also emphasized the importance of international unity and the continuation of the fight against terrorism.

Foreign Ministers meeting

Mr. Takashima: Foreign Minister Kawaguchi's meeting with her Malaysian counterpart was not so different from the meeting between Prime Minister Koizumi and Prime Minister Abdullah, so I think I had better skip that, but let me add one thing.

From 11:00 to 12:00 noon this morning, all foreign ministers attending this Japan-ASEAN Commemorative Summit Meeting got together at the Imperial Hotel and made final preparations for the summit meeting.

During the course of discussions, the foreign ministers agreed that the Commemorative Summit Meeting was very significant in the promotion of further relations between Japan and ASEAN, and they all agreed that they should try their best to bring about a successful meeting.

As the significance of this summit meeting, Foreign Minister Kawaguchi, who is co-chair of the Foreign Ministers Meeting, made five points.

Number one, that ASEAN and Japan should become a core for regional development and cooperation in East Asia, which would lead to the creation of an East Asian community in future.

Number two, the EPA should be agreed upon as quickly as possible and this will become the key factor for the further collaboration among nations in East Asia

Number three, Japan would put priority on Official Development Assistance (ODA) in ASEAN areas and would continue to assist ASEAN's effort to narrow the gap between the new members and the rich members of ASEAN. Japan would also be committed to cooperating with the effort of ASEAN to integrate itself.

Number four, ASEAN and Japan should promote the dialogue, not only in the economic field, but also in political as well as security areas, and to have more cooperative effort on the government level and at the think-tank level.

Number five was the exchange of people. Importance is attached to the exchange of youth, but it is not limited to that. The wider exchange of people between Japan and ASEAN countries would become the basis for the further consolidation of the relations between Japan and ASEAN.

Those were the significant points that Foreign Minister Kawaguchi as a co-chair emphasized during the Foreign Ministers meeting and all other foreign ministers attending that conference agreed on them. They all praised the action plan as well as the basic document which will be called the Tokyo Declaration and will be a very significant document and project.

They all emphasized the importance of implementation and follow-up to those action programs. At the same time, many members of ASEAN countries, many foreign ministers of ASEAN countries praised the Japanese decision to join the Treaty of Amity and Cooperation (TAC), which is regarded as a basis for the ASEAN movement

Question on the Treaty of Amity and Cooperation (TAC)

Q: When will Japan actually sign the Treaty of Amity and Cooperation?

Mr. Takashima: It will be tomorrow. At the end of the summit meeting, there will be a signing ceremony of the basic document. As I have said, it will be called the Tokyo Declaration and also the action plan. There will be another signing ceremony of the document which acknowledges Japan's intention of accession to the Treaty of Amity and Cooperation which will be held at the State Guest House.

Q: This will be the actual treaty, or is it a document that Japan will sign the treaty in the near future?

Mr. Takashima: The document confirms that Japan is joining the treaty in due course and the signing will be done by the Japanese Foreign Minister and possibly one of the ASEAN foreign ministers.

Questions on the Asian bond market

Q: There are not too many references along the Asian bond market.

Mr. Takashima: Yes, that was one of the topics discussed between Prime Minister Thaksin of Thailand and Prime Minister Koizumi. Prime Minister Koizumi promised that Japan would cooperate fully with the idea of the creation of an Asian bond market and also Prime Minister Koizumi said that the Japanese Government would encourage Japanese private sectors to issue the bond in Thai currency with the help of trade insurance provided by the Japanese system.

Q: I understood Prime Minister Koizumi said that there would be some new initiative announced at this meeting. Are you expecting this?

Mr. Takashima: I think the latter one was the initiative that Japan was taking.

Q: Encouraging the private sector to use the Thai baht?

Mr. Takashima: Yes.

Question on EPA

Q: I think there have been academic papers that have been drawn up to show that the benefits of FTA or EPA between Japan and the various countries that you mentioned. Have those been released? Can we see them?

Mr. Takashima: Actually, the decision was taken after careful examination of the papers submitted by each study panel between Japan and the Philippines, Japan and Thailand, and Japan and Malaysia. They all said that the initiation of the negotiation of EPA is feasible, workable and desirable. The papers are here; let me check.

Q: Thank you. Could you talk a little bit about potential obstacles with the three countries? There are always obstacles to these agreements, be it agriculture or the movement of people. What are the foreseeable obstacles?

Mr. Takashima: No one can deny that in negotiation of FTA or EPA, there are some very sensitive areas for each economy. But how to overcome these sensitivities is one of the very important, very challenging issues that we have to tackle.

For example, anyone would recognize that agriculture is one of the major sensitive areas that Japan has as well as the acceptance of foreign workers in the area of health care or nursing. But the Japanese Government is trying to implement the reform in various areas so that these sensitive areas do not become the real obstacles for reaching the agreement. We are trying our best.

Question on Official Development Assistance (ODA)

Q: Since Japan will give priority to ASEAN countries for ODA, is there a figure to it?

Mr. Takashima: We have not shown any sort of exact figure, but 30 percent of Japanese ODA has been provided to ASEAN countries and this represents the fact that Japan put the priority on development assistance to ASEAN countries. The renewed pledge to do the same would indicate that Japan would continue to give as much as possible for the ASEAN countries for ODA.

Let me hasten to add that ODA is something which should be based on needs and requests, so if we have better projects, then there is a good possibility that more money will be poured in.

Q: How much do you expect ODA to shrink in next year's budget compared to the last two or three years?

Mr. Takashima: The Ministry of Finance is still considering the figure and we have not gotten any sort of response from them. As a matter of fact, we made the request of a slight increase, but unfortunately, it may not be materialized. But we are still negotiating with the Ministry of Finance.

Question on bilateral meeting between Prime Minister Koizumi and President Arroyo

Q: Do you have any information on Prime Minister Koizumi's discussion with President Arroyo?

Mr. Takashima: Not very much, actually. When I came out of the office, it was shortly after the meeting, but do you have any particular issues?

Q: In particular, I was wondering if they discussed Japan's accepting health care workers from the Philippines.

Mr. Takashima: My understanding is that President Arroyo has already discussed with Prime Minister Koizumi at an earlier stage, but I do not know if they touched upon it specifically today. They have other subjects to discuss such as the development in the island of Mindanao and other regional development projects as well as the fight against terrorism.

Q: Could you explain Japan's position on the possibility of accepting workers in health care and nursing?

Mr. Takashima: The Government has not decided if it would accept or not, but my understanding is that some industry group, the Japanese Nursing Association and so forth are very cautious on this issue because of the size of the market.

Follow-up question on EPA

Q: You mentioned that Japan is hoping to have partnership agreements with all ten ASEAN nations within ten years. What about Japan-ASEAN economic partnership? Is there are a target date for that? Is that 2012?

Mr. Takashima: I think that was 2014. But as you know, ASEAN is not the European Union (EU). They do not have any single negotiating mechanism, so the economic partnership agreement should be reached separately and individually with the members of the ASEAN countries. Also, as you know, the size of the economies is so different among ASEAN countries and therefore, we do not know if that target date would be met at this moment, but we made a pledge to make utmost efforts to do that.

Q: On the possibility with an EPA with Indonesia, you said as soon as preliminary talks are concluded. What preliminary talks are those?

Mr. Takashima: Indonesia and Japan are holding preliminary dialogue to find out if both of us are ready to go into the formal negotiation on EPA. In other words, are our systems ready for the initiation of the negotiation? As far as the three countries are concerned, the panel of specialists all confirmed that they are ready.

Question concerning Japan's dispatch of the SDF

Q: What is the Malaysian prime minister to Japan's dispatch of troops to Iraq?

Mr. Takashima: My understanding is that there was no specific response from him.

Q: Did any of the ASEAN leaders raise concerns about the dispatch?

Mr. Takashima: Not to my knowledge. Firstly, the bilateral talks are very short, 30 minutes each, and there were so many issues to be discussed. The dispatch and the reconstruction of Iraq was mainly raised by Prime Minister Koizumi by explaining the Japanese Government's decision.

Q: This is outside the ASEAN context. Has China made official statement or made any official contact about the dispatch?

Mr. Takashima: My understanding is that China emphasized the importance of Japan to maintain the so-called "Peace Constitution." They expressed some sort of desire to see that the Japanese Government keep their position as such. I think I should refer you to the statement made by the Deputy Press Secretary of the Ministry of Foreign Affairs of China because I think he made an announcement yesterday.

Question on trade with Singapore

Q: You said that in the talks with Prime Minister Goh Chok Tong that there was reference to Japan's imports from Singapore increased by 30 percent. I think that was only on certain products.

Mr. Takashima: I have that figure, but there has not been any mention on the specific items. My understanding is that especially Japan's imports of chemical products from Singapore have increased dramatically. Indeed, 95 percent of the goods and services traded between Japan and Singapore have been liberalized because of the EPA.