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Financial Times: Japan and Russia start talks to bolster ‘weak ties’

By Mariko Sanchanta in Tokyo
Published: January 22 2007 02:00 | Last updated: January 22 2007 02:00

Japan and Russia will tomorrow begin their first high-level talks in four years as Tokyo aims to build a stable, long-term energy relationship with Moscow.

The two countries are also set to discuss the contentious issue of four Russian controlled islands that are claimed by Japan, an unresolved dispute that has kept the two governments from formally concluding their second world war clash with a peace treaty.

Shotaro Yachi, Japan’s vice foreign minister, will arrive in Moscow tomorrow for the first round of “strategic dialogue”. Mr Yachi is to meet Andrei Denisov, the first deputy minister for foreign affairs, the first time since 2003 that such a senior Russian official has met his Japanese counterpart in direct talks.

The negotiations are aimed at buttressing ties between Russia and Japan that are “conspicuously weak” in the words of one Japanese government official, as compared with Japan’s links with other G8 nations.

Return of the disputed islands, which were occupied while Japan was under attack in 1945, is a cause célèbre of the Japanese right and a long-standing goal of Japan’s foreign ministry. Shinzo Abe, prime minister, is a strong proponent of stepping up diplomatic efforts to press for the islands’ return.

Japan’s main economic interest in Russia is its supplies of oil and natural gas. Tokyo is desperate to reduce its dependence on oil from the Middle East, whichsupplies more than 90 per cent of Japan’s petroleum.It is estimated that theEast Siberian oil fields could one day provide Japan with as much as 15 per centof its petroleum.

Japanese businesses are keen to transfer technology to Russian companies in exchange for partnerships and tie-ups in oil and natural gas projects.

Energy co-operation suffered a blow last year when, under pressure from the Russian government, trading houses Mitsui and Mitsubishi agreed, alongside Royal Dutch Shell, to halve their stakes in the $20bn Sakhalin-2 liquefied natural gas project to allow state-owned Gazprom to take control in a $7.45bn deal.

Talks between Mr Yachi and Mr Denisov will be based on an action plan agreed by Junichiro Koizumi, Japan’s former prime minister, and Vladimir Putin, Russia’s president, in January 2003. They resolved to focus on six main areas including political relations, a peace treaty and trade and economics.

Harufumi Mochizuki, head of Japan’s Agency for Natural Resources and Energy, will visit Moscow on Wednesday for meetings with Gazprom officials. Mr Mochizuki is also expected to discuss trade and investment opportunities.

Copyright The Financial Times Limited 2007

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