Japan wants to dwarf both the NAFTA and EU trade blocs by creating the
world’s biggest economic community which would comprise 16 Asian countries.
The bloc, which Japan hopes will integrate
economies in the region better, would contain nearly half the global
population, a large portion of which would be due to India and China which also
happen to be the world’s most rapidly developing economies.
Japan's
Ministry of Economy deputy director, Takeshi Fujimoto, revealed that ASEAN countries would be included in the new community and
that a press release regarding the plans would be released on Thursday.
Fujimoto
said he hoped that talks regarding the bloc would be completed by 2010.
Japan have
laid nearly all the groundwork for the upcoming talks and according to their
data the new trade agreement would benefit the nations involved with an
increase of GDP to the tune of 30 million yen.
It is only
Japan’s frosty relationship with China that has stopped the trade group forming
in the past, most of the angst stemming from World War Two, when a substantial
number of Chinese were killed by the Japanese.
Chinese
authorities were unimpressed by a recent visit by the Japanese PM to a shrine
dedicated to dead soldiers which happens to include hundreds of war criminals
in the list of deceased “heroes”.
Regardless
of the political hostility between the two nations, there are plenty of calls
from the private sector for a trade agreement between the two economic giants
and the rest of the region.
Stuart Poulson, Head of Corporate trading
at Nikko-Desjardins Asset Management, who manage over $5 billion of funds in
the region, said in a phone interview, “Japanese corporations are highly
motivated to push the government forward with these plans. It’s obviously in
their interest to build up an EU type financial community, especially in the
industrial sector.”
Poulsen added that the agreement will be a
“mighty challenge” because of the pure scale and that it will be difficult to
please everyone in the first round of talks.
“It’s interesting that Japan wants to
include Australia and India, two very strong economies. Could this be intended
as a check on China?” Poulsen said.
Both China and Japan have agreements
already in place with various neighbours.
