Fukuda to Build Ties Before G8

Talks between Japan and Russia this weekend will likely focus on preparations for the upcoming Group of Eight summit, the possible sale of carbon credits by Russian companies and a decades-old dispute over the Kuril Islands, officials from both countries said Thursday.

Prime Minister Yasuo Fukuda, on his first visit to Russia since his election last fall, will focus on establishing a good rapport with outgoing President Vladimir Putin and his successor, Dmitry Medvedev, during talks Saturday, a Japanese diplomat said.

"It is very important for us to establish personal relations with Mr. Putin and Mr. Medvedev," the diplomat said on condition of anonymity.

A Foreign Ministry official involved in the preparations for Fukuda's two-day visit, to start Friday, said the leaders didn't plan to sign any deals. Fukuda is likely to meet with Putin at his Novo-Ogaryovo residence and separately with Medvedev, a Kremlin spokesman said.

Fukuda's talks with Medvedev will focus on the G8 summit in July on the Japanese island of Hokkaido, where Medvedev will meet with British Prime Minister Gordon Brown and other leaders for the first time as president. The summit is expected to focus on climate change and food security.

Japan, a major emitter of greenhouse gases, wants to buy carbon credits from Russia under the Kyoto Protocol's joint implementation scheme. The issue is likely to be high on the agenda this weekend, the Japanese diplomat said.

"Mr. Fukuda also takes seriously the relationship with Mr. Putin, who will bear heavy responsibility as prime minister after he steps down from the presidency," he said.

Fukuda also plans to discuss the decades-old dispute over the Kuril Islands, known as the Northern Territories in Japan, which has kept the countries from signing a peace treaty ending World War II, the diplomat said.

The Foreign Ministry official said the Japanese were welcome to raise any sensitive issues, but added, "We believe these are our territories."

Trade between the countries rose to $20 billion last year, up from $9.6 billion in 2006, according to Russian estimates, while 170 Japanese firms are currently represented in Moscow, up from 70 two years ago.

Marina Pilipenko, a manager at the Moscow-based Japan Center, said the construction of a Toyota plant in St. Petersburg had boosted Japanese businesses in the country.

This week saw the completion of a $50 million fiber-optic cable between Sakhalin and Hokkaido that will link the countries' telecoms systems.

Corruption and a lack of transparency on legal issues remain a major concern for all foreign companies in Russia, Japanese officials said.

Ryuichi Hattori, head of the Japan External Trade Organization in Moscow, said the situation with visas and work permits in Russia was unhelpful for Japanese firms. Foreigners arriving in Japan have 90 days to register with the authorities, Hattori noted, compared with just three days here.