Japan, Peru to agree in principle on FTA later this week: sources

TOKYO (Kyodo) --Japan and Peru are set to agree in principle on concluding a bilateral free trade agreement this week when their leaders meet on the fringes of a summit of the Asia-Pacific Economic Cooperation forum, sources close to the matter said Monday.

The Japanese government hopes that the agreement will give impetus to its ongoing negotiations on free trade with Australia and its stalled talks with South Korea.

Under the bilateral agreement with Peru, Japan expects to secure stable procurement of such resources as copper and zinc from the South American country as well as an increase in exports of automobiles to it.

Japanese automakers believe that the Peruvian market has high growth potential as sales of new vehicles there are expanding, according to the Japan External Trade Organization.

Concerns were thus growing in the auto industry as South Korea forged a free trade accord with Peru in August. Peru's abolition of tariffs on South Korean products could make Japanese automakers less competitive.

Peru imposes a 9 percent tariff on imports of automobiles and motorcycles.

Peru is looking to expand its exports to Japan of such farm and marine products as poultry and squid as well as to increase direct investment from Japanese companies.

The agreement, which will be Japan's 13th such bilateral accord following the one with India in October, will likely be reached when Japanese Prime Minister Naoto Kan and Peruvian President Alan Garcia meet bilaterally on the sidelines of the APEC summit scheduled to be held Saturday and Sunday.
Tokyo and Lima launched their negotiations on free trade in May 2009 after Garcia demanded that Japan and Peru conclude such an agreement the previous year when he met with then Japanese Prime Minister Taro Aso on the sidelines of the APEC summit in the Peruvian capital.

November 9, 2010
Source: mdn.mainichi.jp