Indonesian president leaves Japan with promises of aid

Reviewed by Hitoshi URABE

Article:
"Indonesian president leaves Japan with promises of aid"
The Star
http://thestar.com.my/news/story.asp?file=/2003/6/25/latest/12640Indonesian&sec=latest

Comments:

The brief article reports that the Indonesian President Megawati was generally pleased with the accomplishments upon her visit to Japan to meet Prime Minister Koizumi. The two leaders agreed on many political and economic subjects, and acknowledged there were no serious issues between the countries that needed immediate attention.

On the economic front, as mentioned in the article, Ms Megawati was happy to be confirmed of the assistance Japan would continue to provide, and the agreement to pursue a Free Trade Agreement (FTA) between the two countries.

A concern is, however, is Japan ready to pursue a free trade pact, as Japan has a very poor track record when it comes to FTA's.

Japan is supposed to be well aware that the country prospers on trade with other countries. In fact, the people literally depend on trade to survive. Accordingly, it had long been Japan's policy to promote free trade, and in order not to be considered partisan in any way, that by sticking to universal movements, namely GATT and then WTO.

It was a little less than a decade ago, still amid the euphoria of Marrakech agreement which gave birth to WTO, when senior officials of the government became aware that other countries were already far ahead, with bilateral and regional FTA's already abound. Japanese government changed its policy to cast off the stale strategy and promote FTA's.

Accomplishment since then? Meager, to say the least.

A trade pact between Japan and Singapore was signed early 2002. It is called an FTA only unofficially, however, as the government still hesitates to endorse referring the treaty as such for technical and political reasons. The major reason for the government in hesitating to admit it as a de-facto FTA is that the agreement makes very little reference to farming. This is understandable as there would not be much trade anyway between Japan and Singapore, but ironically, this has made the agreement possible for Japan only with Singapore so far. Another reason for the government's reluctance is the fear of stimulating anti free-trade movements by the farming sector, very marginal in population and production, but with a huge political clout.

Japan began FTA talks with Mexico in 1999. But it is at a halt as Mexico wants to sell its farm products to Japan while Japan wants to exclude them from the agreement so that imports could be controlled. Talks with South Korea began in 2001 is stuck, as there are strong oppositions in both countries. Incidentally, South Korea is the only developed country aside from Japan with just one FTA agreement, that with Chile.

Thailand, Philippines, and Malaysia have asked for free trade pacts with Japan, and preparatory talks are supposedly under way. Earlier in the month, Thai Prime Minister Thaksin Shinawatra visited Japan. Mr Thaksin's initial plan was to agree with Mr Koizumi to sign an FTA by the end of the year. Japanese government, however, was careful not to commit to commencement of a formal negotiation. An official in the Thai delegation was later reported to have commented that Thailand would then be obliged to prioritize trade talks with China and the US.

Outlook is gloomy if any progress FTA talks with Indonesia would take place in the near future, and for that matter, other ASEAN countries or the ASEAN itself. Japan apparently senses no urgency while China is making aggressive moves in establishing a free trade zone in Eastern Asia.

Japan needs to do something about its domestic opposition forces in order to expedite free trade talks with other countries, or else it could become isolated from the rest of the world, leading to a land full of suffering people.