Koizumi Seeks to Boost Trade Ties in Asia

Japanese Prime Minister Junichiro Koizumi, who ends a tour of Southeast Asia today, is hoping improved trade with the region will help pull the second-largest economy out of its third recession in a decade.

Koizumi, in a speech in Singapore today, is expected to outline his vision of closer trade ties with the Philippines, Malaysia, Thailand and Indonesia. On Sunday, Koizumi and Singapore’s prime minister, Goh Chok Tong, signed a free-trade agreement that may serve as a model for the rest of the region.

Japan will have to work hard to overcome the pull of China, which is building stronger ties in the region even as its entry into the World Trade Organization draws away foreign investment. In November, China and the 10-nation Association of Southeast Asian Nations agreed to form a free-trade area within a decade.

Improved trade ties with ASEAN would boost Japan’s $100 billion of two-way commerce with the region and help companies such as Sony Corp. and Matsushita Electric Industrial Co. expand sales. Southeast Asia buys a fifth of Japan’s electronics exports.

Koizumi’s tour comes as the region’s economies are showing signs of recovering from a slump caused by tumbling exports of semiconductors and other goods to the U.S., the biggest market for most of Asia. Singapore’s economy grew an annual 4.3% in the fourth quarter after shrinking at a 10% pace in the first nine months, the government estimates.