Singapour japon 13jan02

Japan, Singapore in Free-Trade Deal

By STEVEN GUTKIN, Associated Press Writer

SINGAPORE (AP) - The leaders of Japan and Singapore signed a pact Sunday eliminating tariffs on almost all their trade, Japan's first bilateral free-trade pact with any country.

Japanese Prime Minister Junichiro Koizumi, who signed the deal with Singapore Prime Minister Goh Chok during a visit to the wealthy city-state, said it will be a ``model ... for Japan's economic relations with Asia.''

In addition to removing tariffs on goods covering 98.5 percent of the two counties' trade, the pact also provides for cooperation in science and technology, financial services, tourism and training, Goh said.

``What we have signed is not a conventional free-trade agreement,'' he said at the signing ceremony in Singapore's lavish presidential palace. He also said it would lead to stronger ties between Japan and the rest of Asia.

Singapore was Koizumi's last stop on a five-nation tour designed to galvanize ties with Southeast Asia. China signed a free-trade agreement with a group of countries in the region last year, raising fears in Japan that its influence in Asia may soon be overshadowed by Beijing's.

Koizumi visited Indonesia, the Philippines, Malaysia and Thailand, and is scheduled to return to Japan on Tuesday. Much of the trip has been dominated by talk of a Japanese proposal to set up a massive free-trade zone incorporating Southeast Asia, Japan, China and South Korea (news - web sites).

But Koizumi has not made details of the proposal public, raising questions about whether Japan is serious about opening up its coddled industries.

Koizumi has pledged broad reforms to improve Japan's struggling economy, but his government is under tremendous political pressure to protect the country's agricultural exports.

One reason Singapore was able to make a free-trade deal with Japan was that ``we don't pose a problem for the agricultural sector,'' said Lim Chin Beng, Singapore's chief negotiator for the pact. It may prove difficult for Japan to cut tariffs on farm products from other Asian nations.

Singapore, which has 4 million people and virtually no natural resources, exports mainly high-tech products such as computer parts. It depends heavily on foreign trade and has been aggressively seeking free trade pacts with other nations, including the United States.

During his Southeast Asian tour, Koizumi has faced some protests over Japanese human rights abuses during World War II.