Last month, Prime Minister Junichiro Koizumi toured the Philippines, Malaysia, Thailand, Indonesia and Singapore, which belong to the Association of Southeast Asian Nations (ASEAN), in one week. Although the trip was not as rushed as the day trips he previously made to China and the Republic of Korea (South Korea), it was nevertheless an energetic trip he made in a short time.

In Singapore, his last destination, Koizumi signed a free trade agreement with Singaporean Prime Minister Goh Chok Tong. The following day, Koizumi delivered a speech in which he asked for a frank partnership and presented a proposal for comprehensive economic cooperation for Japan to advance together with the Asia-Pacific region, including ASEAN. The proposal was reportedly welcomed and praised by ASEAN leaders and U.S. Secretary of State Colin Powell.

I also think the proposal is right for Japan to build an economic partnership with Asian countries centering on ASEAN. At the same time, however, I wish to address the following problems.

ASEAN 10-plus-5-plus-1

First, the scope of the proposed partnership is too broad. In addition to ASEAN countries, Japan hopes to include China, South Korea, Australia and New Zealand as key members of the partnership. Even if Japan concludes a free trade agreement with ASEAN (JAFTA), it is understandable that Japan would not want to form a closed and exclusionary community because it would run counter to Japan's national interests.

However, ASEAN 10-plus-three (Japan, China and South Korea), ASEAN 10-plus-five (Japan, China, South Korea, Australia and New Zealand) and ASEAN 10-plus-five-plus-one (the United States) have many problems ahead.

At the ASEAN summit in November 2000, South Korean President Kim Dae Jung officially proposed the establishment of the ASEAN 10-plus-three framework. But ASEAN rejected the proposal because of complex problems within Japan and South Korea that have to do with protection of domestic agriculture. I expect the ASEAN 10-plus-five plan will also be immediately met by opposition from Malaysia and China.

The reason is simple. From the time Malaysian Prime Minister Mahathir Mohamad proposed the establishment of the East Asian Economic Group (EAEG, later renamed East Asian Economic Caucus) in 1990, Australia and New Zealand were excluded from the plan, from the viewpoint of regional unity. China, which supported EAEG, has continued to oppose the inclusion of Australia and New Zealand, both officially and unofficially.

There is no doubt the 10-plus-five concept is more difficult to realize than 10-plus-three. On the other hand, the 10-plus-five-plus-one plan that Prime Minister Koizumi is believed to be contemplating is virtually no different from the Asia-Pacific Economic Cooperation (APEC) forum when it is seen from the viewpoint of its members. What is the actual significance of establishing ASEAN 10-plus-five-plus-one? This is difficult to understand.

Actually, in recent years, the significance and role of APEC itself is being questioned. Under such circumstances, the proposal of ASEAN 10-plus-five-plus-one is completely meaningless. The scope of the proposed comprehensive economic cooperative partnership is too broad and ambiguous.

Second, there are no set target dates and clear objectives. I think Japan's decision to make 2003 the year of Japan-ASEAN exchange and the proposal to hold a meeting to discuss an East Asia development initiative are good. But there is no indication whatsoever how long it will take JAFTA to materialize. I think this is fatal. By contrast, China has reached an agreement with ASEAN to realize a so-called CAFTA within the next 10 years.

I think the most unwise thing to do is to put off the matter indefinitely and set ASEAN's teeth on edge.

The Japan-Singapore free trade agreement finally took shape thanks to the efforts of three Japanese prime ministers-Keizo Obuchi, Yoshiro Mori and Koizumi. How many prime ministers and how many years will it take for JAFTA to come into reality?

Even if Japan clearly specified a target date, ASEAN leaders may worry if it can really be met. Since Japan has avoided setting a target date, it cannot be helped if ASEAN thinks it cannot understand Japan's true intentions.

The third problem is that Japan did not present solutions to its domestic agricultural problems. With the exception of Singapore, ASEAN members are basically farming countries. Unless they can promote exports of agricultural products to Japan, having a free trade agreement with Japan has little appeal to them.

Possible trade war

Agriculture is a particularly sensitive issue in Japan because it involves domestic politics. Import curbs on Chinese agricultural products that Japan recently implemented triggered a trade war between Japan and China. Although the dispute has subsided, if trade between Japan and ASEAN advances in the future, a similar situation could develop between them over imports of agricultural products.

In 2000, Japan imported 28.88 billion yen worth of foodstuff (meat, fish, shellfish, fruits, vegetables and alcoholic beverages) and 12.45 billion yen worth of raw materials (lumber, pulp, iron ore and nonferrous metal scrap). Of Japan's total imports from Singapore, foodstuff accounted for 4.2 percent and raw materials accounted for 1.8 percent. However, in concluding the Japan-Singapore free trade agreement, the Japanese government caved in to Liberal Democratic Party lawmakers representing the interests of domestic farmers and failed to abolish tariffs on nearly 2,000 agricultural and fisheries products. The outcome shows how difficult it is to abolish tariffs on such products in realizing a free trade agreement with Japan.

In 2000, Japan imported 541.9 billion yen worth of food and 412.6 billion yen worth of raw materials from ASEAN. Food accounted for 8.5 percent and raw materials 6.4 percent of Japan's total imports from ASEAN. However, once Japan's domestic agricultural and fisheries markets are opened, imports from ASEAN are expected to rise sharply. When that happens, Japan needs to come up with effective measures to deal with the situation. Incidentally, China, which has a farming population of 900 million, announced that it will liberate the farming sector when it proposed CAFTA. If Japan wants to advance JAFTA, it should also show a clear vision.

It has been 25 years since then Prime Minister Takeo Fukuda announced the Fukuda doctrine in Manila in 1977. Since then, Japan and ASEAN have advanced their friendship based on an equal partnership. However, a close international organization has yet to be formed.

While Prime Minister Koizumi stressed that Japan will move forward with ASEAN as a frank partner without concrete proposals and targets, it is unclear what kind of a framework of comprehensive economic cooperation can be realized between them. The prevalent view within the Japanese government is that conclusion of a free trade agreement between Japan and ASEAN is most unlikely since the economic gap between them is too wide. The Asian mass media even let out that ASEAN leaders' commendation of Koizumi's proposal is nothing more than diplomatic language.

Of course, some ASEAN leaders disagree. Philippine Minister of Trade and Industry Manuel Roxas expressed concern that advancing free trade with China would hurt domestic farming and asserted that ASEAN should conclude a free trade agreement with Japan rather than China. Cambodian Commerce Minister Cham Prasith says ASEAN plus-five should form an Asia-Pacific trading bloc within the next 10 years. However, neither views are prevalent in ASEAN.

Indeed, Japan must tackle many problems. The first thing Japan must do to strengthen economic cooperation with ASEAN is to recover the economy of the lost decade. Unless the Japanese economy can get back on a recovery track, ASEAN will be disappointed in Japan. The recent plunge of the yen has brought about confusion in Asian economies, causing Asian leaders to complain and severely criticize Japan.

Unbalanced relationship

The economic relationship between Japan and ASEAN is also unbalanced. In terms of trade, there is always an excess of imports on the part of ASEAN. The excess, which stood at 897.6 billion yen in 1998, rose to 912.7 billion yen in 1999 and 957.6 billion yen in 2000.

Meanwhile, Japan's direct investment in ASEAN is declining year by year. This is basically due to the decrease in Japan's overseas direct investment resulting from the collapse of the asset-inflated economy and a shift to China. Japan's direct investment in ASEAN decreased from 515.9 billion yen in 1998 to 440.4 billion yen in 1999 and 275.1 billion yen in 2000.

Attracting Japanese capital to ASEAN is a problem that needs to be addressed. Both trade and investment should be improved by strengthening Japan-ASEAN economic cooperation.

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Born in Malaysia, the author is a professor and deputy director of the Institute of Asia-Pacific Studies at Waseda University.