http://www.atimes.com/atimes/Japan/GE17Dh01.html
May 17, 2005


 Japan, Malaysia expected to sign FTA soon

TOKYO - Japan and Malaysia are expected to sign a free-trade agreement (FTA) 
by the end of May now that both sides are ready to make concessions on the 
liberalization of trade in automobiles and other manufactured goods, The 
Nihon Keizai Shimbun learned on Sunday.

A tentative agreement is seen at a vice ministerial meeting set to start in 
Malaysia on Tuesday, and the Japanese government hopes that the accord will 
be formally sealed when Prime Minister Junichiro Koizumi meets with his 
Malaysian counterpart, Abdullah Badawi, in Tokyo on May 25.

Japan has already signed bilateral FTAs with Singapore, Mexico and the 
Philippines.

An FTA with Malaysia is expected to lift Japanese real gross domestic 
product by 0.06%, according to a Cabinet Office estimate.

Negotiations over trade in farm and marine products have already been 
settled, leaving talks on autos and steel products to continue.

In a gesture to move the negotiations forward, Malaysia has signaled that it 
is ready to cut the 50% tariff rate on imports of full-sized cars from Japan 
or phase the duties out, according to Japanese sources close to the talks. 
Malaysia has been manufacturing subcompacts, but not larger sized cars.

Japan, for its part, will express its intention to expand technical 
cooperation with Malaysian auto parts makers and help them train their 
engineers in line with Malaysia's request, the sources said. Tokyo wants to 
expand the scope of automobiles and auto parts whose tariffs will be reduced 
or abolished altogether.

A trade liberalization accord is expected to increase Japan's exports of 
auto parts to Malaysia, where Toyota Motor Corp and other auto makers have 
operations.

Negotiations on the trade of steel products as well as the investment and 
service sectors have yet to be concluded.

(Asia Pulse/Nikkei) 



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