Taiwan, Japan might sign comprehensive trade pact: report

• By Sam Garcia / Staff writer

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Taiwan and Japan might sign a wide-ranging trade agreement by the end of this year, which could help break a deadlock in Taiwan’s trade diplomacy if completed, Nikkei Asia reported yesterday.

Japan is negotiating with the administration of President William Lai (賴清德) to reach a comprehensive economic agreement modeled after the Enhanced Trade Partnership Arrangement finalized by the UK and Taiwan in 2023, it said, citing two sources familiar with the matter.

“The Enhanced Trade Partnership between the UK and Taiwan sets a precedent for Japan to follow,” one of the sources told the media outlet.

The national flags of Taiwan, left, and Japan are pictured in an undated photograph.

Photo: Lin Tsuei-yi, Taipei Times

The framework leaves room for future agreements tailored to specific regions or industries, while reducing political sensitivities and giving Tokyo a degree of protection against backlash from Beijing, the source said.

The current draft covers five areas of cooperation: economic resilience and innovation, industry cooperation on disaster risk reduction, digital trade, trade facilitation and sustainability, Nikkei Asia said.

Disaster risk reduction would encompass drone cooperation, mainly to respond to natural disasters, it said.

The agreement with Japan could encourage other countries, particularly Canada and the Philippines, to pursue their own agreements with Taiwan, one of the sources said.

Katsuya Yamamoto, director of the strategy and deterrence program at the Sasakawa Peace Foundation think tank, told Nikkei Asia that Japan has traditionally been reluctant to establish a broader economic framework with Taiwan, but the strategic and economic landscape had changed significantly.

“Economic security has become a major policy priority, and both Japan and Taiwan share an interest in strengthening the resilience of critical supply chains, particularly in advanced technologies and semiconductors,” Yamamoto said.

Asked about the report, Minister of Foreign Affairs Lin Chia-lung (林佳龍) said he would welcome such a development, adding that previous models with the US, Canada and the UK serve as valuable references.

Taiwan and Japan share exceptionally close economic, trade and investment ties, he told reporters.

Taiwan’s semiconductor industry has already invested in manufacturing facilities in Japan, and bilateral industrial cooperation is already helping to safeguard supply chains and economic security, he said.

While Taiwan and Japan have already signed nearly 100 cooperation agreements and memoranda of understanding, the Ministry of Foreign Affairs would be happy to see a more structured and comprehensive framework for bilateral economic and trade cooperation, he added.

Taiwan’s Office of Trade Negotiations yesterday declined to comment on the Nikkei Asia report, but said that Japan is one of the nation’s key trade partners, and that strengthening economic ties and expanding mutually beneficial cooperation with Japan have long been government priorities.

Over the past year, the two sides have held a series of meetings, including the Taiwan-Japan Economic and Trade Conference, discussions on cooperation in third-country markets and two meetings of the Taiwan-Japan Economic Partnership Committee, it said.

The meetings focused on issues of mutual concern and included exchanges on the global economic outlook, with the aim of further deepening bilateral economic and trade cooperation, it said.