Japan, Philippines ink free trade agreement

On September 9, 2006, Japan and the Philippines signed a free-trade agreement (FTA) that will remove tariffs on 94 percent of bilateral trade value. This FTA is the first for the Philippines and the fourth for Japan, which has signed FTAs with Singapore, Mexico and Malaysia. Prime Minister Junichiro Koizumi and President Gloria Macapagal Arroyo said in a joint statement at the signing ceremony that the two countries will “promote the development of our economies which will bring about prosperity and stability to both of our countries and help lay the foundations for building an East Asian community.” The FTA is expected to take effect by the end of 2007 after ratification by each nation's legislatures. As previously reported by SteelOrbis, the two countries had several negotiations on the FTA in 2004; however, negotiations failed several times due to certain subjects, including steel tariffs applied by the Philippines on Japanese steel products. The agreement is expected to push up Japan's gross domestic product by as much as 0.03 percent and the Philippines' by up to 3.03 percent.