Israel asks Japan for free trade agreement

TOKYO, April 12 (AFP) -

Israel on Tuesday called on Japan to launch talks for a bilateral free trade agreement as the world's second largest economy expands investment in the Jewish state.

Deputy Prime Minister Ehud Olmert said he told Prime Minister Junichiro Koizumi in a meeting here he was "very encouraged" by the level of Japanese business interest in Israel.

"It only proves what I say to the prime minister that time has come for Israel and Japan to sign a free trade agreement," Olmert told reporters after the meeting.

"I hope that we will be able to inquire and examine this possibility soon with the government of Japan in order to step forward together into possible cooperation in the future," he said.

Japan only has free trade pacts with strategically placed Mexico and Singapore, but it has begun talks to form pacts with a series of other countries including the Philippines, South Korea and Thailand.

Japan's exports to Israel stood at 125.7 billion yen (1.2 billion

dollars)

in 2004, according to the finance ministry. More than 50 percent of Japanese goods to Israel are cars.

Japan's imports from Israel, mainly optical instruments, electronic devices and diamonds, came at 85 billion yen last year.

Japan, which is heavily dependent on Middle Eastern oil imports, maintains cordial ties with Israel but has also vocally backed the Palestinian cause and helped bankroll the Palestinian Authority.

Koizumi told Olmert that Palestinian Authority President Mahmoud Abbas would come to Japan in mid-May and extended his invitation to Israeli Prime Minister Ariel Sharon to visit for a three-way summit.

But Olmert said Sharon would likely stay in Israel during that period as he plans to celebrate the country's national day.

"At this point, I think, within the near future, just because of time constraints, it could be very difficult," Olmert said.

"But of course we understand the significance of such meeting and the desire of the prime minister of Japan is registered very well with us," he said.

Koizumi praised Sharon's plan to withdraw from the Gaza Strip, saying he hoped the move could accelerate peace in the region, said a foreign ministry official who attended the Koizumi-Olmert meeting.

US President George W. Bush, at a meeting with Sharon at his Texas ranch on Monday, voiced support for the Gaza pullout but urged the Israeli premier to stop all expansion of Jewish settlements in the West Bank under the Mideast peace roadmap.

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