Japan and India have signed a free-trade agreement. They are trying to make it easier to sell
goods between the two countries. Japan is trying to build greater trade links since it was
recently overtaken by China as the world’s second biggest economy. Roland Buerk reports.
The agreement is intended to boost trade between Japan and India, which share a mutual
concern about the growing economic clout of China. Within 10 years, tariffs will be
abolished on 90% of Japanese exports to India and 97% of India’s exports to Japan.
The Prime Minister of Japan, Naoto Kan, has said opening up the country to trade is a top
priority. Japan’s population is ageing rapidly and the economy is mired in deflation. Earlier
this week, Japan was eclipsed by China as the world’s second biggest economic power.
Meanwhile South Korea is an increasingly formidable rival, using free-trade agreements to
make its electronics and other sectors more competitive.
Japan’s government is considering joining talks on the Trans-Pacific Partnership, a huge freetrade
area around the Pacific rim. But it faces strong opposition from rice farmers, who are a
powerful political constituency and protected by very high tariffs. Rice is not included in the
free-trade deal with India.
Roland Buerk, BBC News, Tokyo

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