Saturday, April 15, 2006

Japan's call for a vast Asian free trade zone

More than a decade ago, when Malaysia led efforts for an expansive Asian free trade zone, Japan's reluctance to participate stymied progress.

These days it is Japan that is leading the effort. Tokyo's logic back then was that entering into free trade agreements (FTAs) with poorer nations would be to its disadvantage. Now it seems to realize that red-hot growth in the Asian region represents opportunities.

Japan's own policy of going it alone against large trade pacts like the EU and NAFTA has exposed further weaknesses in its chosen path.

Today Japan is negotiating a multilateral deal with the Association of South East Asian Nations (ASEAN) and bilateral FTAs with many Asian nations.

It has also called recently for a massive Asian free trade zone that would include China and India, making it geographically and population-wise, the world's largest.

Some analysts see Japan's move as a response to increasing competition posed by China's rapid growth and influence in the region. However both the Chinese and South Koreans have been sealing deals for FTAs with other nations faster than Japan, and this may have provided a wake-up call for Tokyo.

Japan's moves are a welcome sign that it wishes to integrate, at least economically, with its neighbors and that's a good start.

Japan pushes massive Asian free-trade zone

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