Manila, Philippines - Japan and the Association of Southeast Asian Nations (ASEAN) economic ministers (AEM) hope to finish a road map this year to double trade among these countries in 10 years.
The road map will focus on five priority areas, namely trade and investment liberalization, facilitation and promotion; system harmonization; improvement of logistics and distribution networks; narrowing development gaps; and promoting advanced industrial development.
It will be presented for approval at a meeting of ASEAN and Japanese economic ministers in Cambodia in August this year. A follow-up mechanism for implementation of the road map will also be established.
On ASEAN connectivity, Japan has on many occasions expressed its strong support to this initiative, according to the ASEAN Secretariat. Even at the 14th ASEAN-Japan in 1995, the ASEAN leaders already acknowledged and appreciated Japan’s strong commitment for enhancing connectivity under the visions namely “Formation of the Vital Artery for East-West and Southern Economic Corridor” and “Maritime Economic Corridor” as well as projects of soft infrastructure throughout ASEAN region.
Japan had identified 33 flagship projects related to the three ASEAN corridors namely, East-West Corridor, Southern Economic Corridor and Maritime Economic Corridor.
Meanwhile, Japan continues to support ASEAN’s integration and community building efforts, including narrowing the development gaps in ASEAN through various sub-regional development endeavours. Japan has extended assistance to various projects under the Initiative for ASEAN Integration (IAI), covering human resources development in the areas of energy, transportation, vocational training, industrial relations, environmental protection, irrigation system management, and management programs for senior officials of Cambodia, Laos, Myanmar and Vietnam (CLMV).
Japan has also supported other sub-regional development areas within ASEAN such as the Greater Mekong sub-region and Brunei Darussalam-Indonesia-Malaysia-Philippines-East ASEAN Growth Area (BIMP-EAGA) to promote economic and social development of the sub-regions.
ASEAN and Japan signed the ASEAN-Japan Comprehensive Economic Partnership (AJCEP) on April 14, 2008 and entered into force on Dec. 1, 2008. As of March 2009, all ASEAN member states and Japan have ratified the agreement.
The AJCEP agreement is comprehensive in scope, covering trade in goods, trade in services, investment and economic cooperation. The AJCEP would strengthen the economic ties between ASEAN and Japan and would create a larger and more efficient market with greater opportunities in this region.
All these efforts, programs and projects underscore the fact that ASEAN and Japan are important trading partners. After a decline of 25 percent in 2009 due to the global economic and financial crisis, total trade between ASEAN and Japan increased 32 percent in 2010, amounting to $103.1billion from $78.1 billion in 2009 according to the ASEAN secretariat website.
Total trade grew 26.7 percent, amounting to $203.9 billion in 2010. Japan is ASEAN’s third largest trading partner in 2010 with 10 percent share of ASEAN’s total trade. On the other hand, ASEAN is Japan’s second largest trading partner after China.
On the other hand, foreign direct investment from Japan to ASEAN increased significantly 124.3 percent from $3.8 billion in 2009 to $8.4 billion in 2010. Japan remained an important source of foreign direct investment with a share of 11.4 percent of total inward investment to ASEAN in 2010.