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. Last Updated: 07/27/2016

Japan Urged to Help Develop the Far East

APMikhail Kasyanov
TOKYO -- Japan and Russia agreed Tuesday that a Japanese plan for an oil pipeline from Eastern Siberia to Russia's Pacific coast was a good idea, but stopped short of making any commitment at this stage.

A statement, issued after talks in Tokyo between Prime Minister and his Japanese counterpart Junichiro Koizumi, said the former World War II foes would continue discussing the idea "actively." The two countries also agreed to form a joint body next year to promote trade and investment.

"The two leaders shared the view that the construction of a pipeline to the Pacific coast is important from the standpoint of the development of Eastern Siberia and Russian Far East, effective use of energy resources in the region and stable energy supply in the Asia-Pacific region," the statement said.

Earlier on Tuesday, Japanese Trade Minister Shoichi Nakagawa told Kasyanov that Tokyo was ready to provide financial assistance to Russia to build the pipeline routed to the Pacific.

But while import-dependent Japan has been trying to persuade Russia to build a pipeline from Eastern Siberia to nearby Nakhodka on Russia's Pacific coast, Russia has steered clear of making any commitment.

"The project must benefit both Japan and Russia. ... I would like to emphasize the importance of the pipeline for Japan," a Japanese official quoted Koizumi as telling Kasyanov.

Japan's hopes for the Nakhodka pipeline, which would cost an estimated $4 billion to $5 billion, took a knock this year when Russia and China signed a declaration that they would strengthen cooperation in the oil and gas sectors, including construction of a huge Russia-China oil pipeline.

Both Japan and China, whose appetite for energy has grown because of its booming, export-driven economy, are keen to see construction of a pipeline begin.

Analysts and Russian government officials have said Russia does not have enough reserves to justify building pipelines to serve both and more exploration was needed.

The Chinese plan calls for a 600,000 barrels per day pipeline to Daqing in northern China. The proposed Japanese pipeline is designed to ship up to one million bpd by 2007-2009.

The new trade body, designed mainly to promote Japanese investment in Russia, will provide information on the investment climate there, offer consultation services to potential investors and help firms prevent or resolve business disputes.

Japan and Russia had two-way trade of $4.2 billion in 2002, according to Japanese government data. Japan's trade with Russia surged 31.4 percent to 318.6 billion yen ($2.96 billion) in the first six months of this year from a year earlier, due mainly to a rise in energy-related deals.

Japan's investment in Russia was $440 million in 2002. Japan's cumulative investment in Russia totaled $990 million as of the end of 2002.

During Tuesday's meeting with Kasyanov, Koizumi repeated Tokyo's call for Russia to ratify the 1997 Kyoto treaty to fight global warming.

The joint statement said Russia would decide whether to ratify the treaty after assessing its impact on the economy.

"We are preparing for ratification of the Kyoto Protocol, although this period is taking longer than we expected," Interfax quoted Kasyanov as telling reporters in Tokyo. "We remain on the course of preparing for ratification."

Russia has pulled back from previous promises to ratify the treaty, apparently worried it might choke economic growth.