1. The Prime Minister of Japan, His Excellency Mr. Junichiro Koizumi, and the President of the Republic of the Philippines, Her Excellency Mrs. Gloria Macapagal-Arroyo, held a meeting on 04 December 2002 in Tokyo during her visit to Japan as Japan's state guest, and discussed the importance of ongoing efforts for the establishment of a Japan-Philippines Economic Partnership (JPEP).

2. The two leaders stressed the long-lasting close economic ties between the two countries which have developed through fruitful cooperation over many years. They shared the recognition that such close ties have resulted in a variety of economic benefits to both countries. They underscored the desirability of further strengthening their economic partnership.

3. The two leaders underlined the need to strengthen the complementarities as well as the competitiveness of the two economies, particularly in this era of globalization, and acknowledged that these could be enhanced through greater economic partnership between the two countries. They recognized that trade and investment liberalization and facilitation, along with enhanced cooperation in other related areas, would accelerate cross-border flow of resources and provide greater opportunities and larger economies of scale for Japanese and Philippine businesses.

4. The two leaders acknowledged with great appreciation the important work of the Working Group on the JPEP, which was established by the two sides at the Informal Preparatory Meeting held in Tokyo on 14 August 2002, as well as the progress achieved by the Group during its first two formal meetings held on 18-19 October 2002 in Manila and on 25 November 2002 in Tokyo.

5. The two leaders noted with satisfaction that discussions in the Working Group have covered areas of cooperation ranging from trade and investment liberalization and facilitation to various other bilateral partnerships and linkages. They also noted that the envisaged JPEP would include a possible free trade agreement and other components covering services, investment, human resource development and other forms of economic cooperation.

6. The two leaders reaffirmed that JPEP should be consistent with the rules of the World Trade Organization. They also recognized that JPEP, as a novel form of economic partnership, could play a catalytic role in accelerating global trade liberalization and rule-making. They further shared the view that JPEP should seek to develop and enhance the ASEAN-Japan Comprehensive Economic Partnership, which could pave the way toward the establishment of an East Asian Free Trade Area.

7. The two leaders have therefore instructed relevant ministries within their respective governments to work more closely and to advance the establishment of the JPEP. They looked forward to the expeditious commencement of the next stage for the realization of the JPEP.

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