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Japan, S. Korean business leaders agree on free trade.

TOKYO, Jan. 25 Kyodo

Business leaders from Japan and South Korea agreed Friday that the two countries should sign a bilateral free-trade agreement (FTA) at an early date, providing an impetus for both governments to launch a full study on the issue, Japanese participants said.

''We agreed the two countries should create a new, common market of 170 million people by integrating the two economies,'' said Jiro Ushio, chairman of Japan's Ushio Inc., after a one-day, closed-door meeting of the Japan-Korea FTA Business Forum at a Tokyo hotel.

''This is a historic agreement,'' said panel member Yoshitaka Ishii, chairman of Kyushu Railway Co.

Ushio headed the Japanese delegation at the forum. Park Yong Sung, chairman of the Korea Chamber of Commerce and Industry, led the Korean delegation. Some 30 business executives from the two countries participated.

The business forum was set up in March 2001 after the two countries agreed in a September 2000 summit meeting to explore the possibilities of a bilateral free-trade accord.

Then Japanese Prime Minister Yoshiro Mori and South Korean President Kim Dae Jung agreed that the two countries would jointly examine the possibility of an FTA by first holding private-level talks before launching government-level negotiations.

During the Friday meeting, the participants adopted a joint statement calling on Tokyo and Seoul to ''make utmost efforts to start government-level negotiations on the bilateral FTA and sign it at an early date.''

The statement said the projected Japan-South Korea FTA should be no mere lowering of tariffs between the two countries but a comprehensive economic partnership agreement.

It also said the bilateral FTA should be expanded in the future to cover China and the Southeast Asian nations.

Ushio said he will submit the statement to Prime Minister Junichiro Koizumi early next week.

The Japanese and the South Korean business groups will present a set of recommendations to their respective governments, possibly in early February, so the bilateral FTA can be on the agenda before U.S. President George W. Bush visits the two countries in the middle of that month, he said.

The participants of the business forum also expect that Tokyo and Seoul will formally begin talks on the issue when Koizumi visits Seoul, tentatively slated for March, he said.

The Japanese participants said business leaders in both countries were first opposed to the idea because the FTA would have a detrimental effect on certain sectors of both economies.

But the atmosphere changed after the overall bilateral relationship improved thanks to the scheduled co-hosting of the World Cup soccer finals, they said.

Deterioration in economic conditions of the two countries also played a part in creating more FTA advocates, they said.

''Combining the strong points of Japan and South Korea will provide a tremendous boost to their respective economies,'' according to Ushio.

Ushio said the two nations should first try to bring their peoples closer, something their young are already doing.

''Korean culture, including food and fashion, is gaining popularity among young Japanese, especially women,'' he said.

On Jan. 13, Japan signed its first-ever FTA with Singapore three months after the two countries reached a basic accord on its framework.
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Publication:Asian Economic News
Date:Jan 28, 2002
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