Fukuda to hold trade talks in Moscow

RUSSIA: YASUO FUKUDA, Japan's prime minister, flies to Moscow today for talks aimed at strengthening the two countries' growing…

RUSSIA:YASUO FUKUDA, Japan's prime minister, flies to Moscow today for talks aimed at strengthening the two countries' growing commercial relationship and winning Russian support for Japan's stance on global warming.

He will have separate meetings with Vladimir Putin, Russia's outgoing president, and Dmitry Medvedev, who will succeed Mr Putin next month. Mr Putin has pushed closer commercial ties with Japan as part of his policy to bolster Russia's underdeveloped Siberia and Far East regions, where Japan is seen as offering a counterweight to China's growing influence.

Though Japan and Russia are still technically at war, having failed to resolve claims to four disputed islands, trade has soared in recent years, rising from little more than $4 billion (€2.55 billion) in 2002 to $21 billion last year.

Mr Putin has also raised the possibility of tapping Japanese finance and technical expertise for a trans-Siberian oil pipeline and a high-speed train. Talks over the oil pipeline have been difficult, with Japanese officials accusing Moscow of playing Japan off against China.

READ MORE

Russia has become an important market for Japanese cars, capital goods and electronics. Toyota has opened a factory near St Petersburg, where Nissan and Suzuki are also building plants.

Japan had 302 companies operating in Russia in 2006, the latest year for which figures are available, against just five in 1999.

Trade figures published this week showed exports to Russia rising more than 50 per cent year on year, even as shipments to the United States sank 11 per cent. Japan imports crude oil from Sakhalin in Russia's far east, from where it will soon import 8.5 per cent of its total liquefied natural gas requirements.

One foreign diplomat based in Tokyo with knowledge of both Russia and Japan said part of the reason for Mr Fukuda's trip was to see whether Mr Medvedev shared Mr Putin's vision of closer links with Japan. Tokyo has held out the prospect of stepping up its commercial co-operation if Russia moves towards a political solution over the islands, known as the Northern Territories in Russia and the Southern Kuriles in Japan. The islands were seized by Russia towards the end of the second world war.

A Japanese foreign ministry official said Japan would also be seeking Mr Medvedev's support for its "sectoral" approach to cutting greenhouse gas emissions. Tokyo regards this industry-by-industry approach as better than setting mandatory emissions targets and more likely to win the support of developing countries. -