Japan balances between US, China over trade, security

NUSA DUA, (Indonesia), Nov 19 (Reuters): Japan assured Asia and key ally United States this week that Tokyo is not choosing sides between Beijing and Washington over sensitive trade and security issues, in a delicate balancing act to avoid past perceived mistakes of upsetting its partners. With rivalry between the United States and China in the spotlight at Saturday's East Asia Summit, Japan welcomed the recent announcement of greater US military presence in Australia while seeking stronger strategic ties with Beijing. Prime Minister Yoshihiko Noda also said that what it ultimately wants is a greater Asia-Pacific free trade area. A US-led plan for a Trans-Pacific Partnership (TPP), which it promoted last week at an APEC meeting in Hawaii, and an East Asia free trade area, which China wants, should both lead to that end. The comments underscore Noda's desire to avoid the perceived mistakes of his two immediate predecessors, one of whom strained US-Japan ties, while the other lurched into a bitter territorial feud that chilled relations with top trading partner China. "I welcome that the United States is deepening its presence in Asia-Pacific but that should not be simply taken to mean that it's a threat to China," Noda told reporters Friday. "On the other hand, we will seek to deepen the mutually beneficial relationship based on common strategic interests with China. China's development is an opportunity for Japan." Japan needs to balance its US-centred diplomacy with the need to boost ties with Asia, whose economic potential is essential for Japan's future growth. China in 2009 replaced the United States to become Japan's biggest trading partner. Last weekend, Noda said Japan was interested in joining the United States and eight other nations in negotiating the TPP, which in principle eliminates all tariffs within the zone. But it does not include China for now. As Obama builds up some momentum for the TPP, Noda assured Asian counterparts at weekend summits on the Indonesian resort island of Bali that Tokyo was still committed to Asia's own free trade area proposals. They include the East Asia Free Trade Area (EAFTA) for the 10-member Association of South East Asian Nations plus Japan, China, South Korea (ASEAN+3), originally pushed by China, and the Comprehensive Economic Partnership in East Asia (CEPEA) for ASEAN+3, Australia, India and New Zealand, promoted by Japan. Noda said Japan and China, in a rare joint move, proposed to set up a committee to work on promoting free trade in Asia. "They (TPP, EAFTA and CEPEA) won't contradict each other," Noda told reporters, adding that all those ideas will help Tokyo's ultimate goal to create a wider Asia-Pacific free trade area, involving the United States and China among others. The East Asia Summit (EAS) brings together leaders from the 10-member ASEAN and its eight dialogue partners, including two new members the United States and Russia. President Barack Obama is the first US president to attend the EAS.