Japan has opened negotiations with Burma on an investment treaty, the trade ministry said on Wednesday, as corporations around the world scramble to do business as political reforms are underway.
Japan, which occupied Burma during World War II, will seek most-favored-nation status, meaning Burma would have to grant Japan at least as favorable conditions it grants to other nations, the official said.
The earliest possibility for an agreement would be in November during a summit of the Association of Southeast Asian Nations and Japan in Cambodia, the ministry said.
“Since many Japanese private companies are trying to do business with Burma, we want to reach the agreement as soon as possible,” a ministry official told Japanese media.
The United Stated last week suspended most sanctions against Burma, except for arms sales. Earlier, the E.U. and many other nations suspended or lifted sanctions.
In early April, Japan said it would forgive $3.7 billion of Burma's debt to Japan and resume aid as a way to support the country's democratic and economic reforms.
This week, the U.N. announced that Japan has donated US$ 10.6 million to the United Nations World Food Programme for its operations to fight hunger in Burma.
Japan also pledged $7.4 billion in development aid to five Southeast Asia nations in an effort to promote cooperation with countries in the Mekong region.
Japanese Prime Minister Yoshihiko Noda said the stability of East Asia is not possible without the stability and development of the Mekong region.
Burma’s reformist, quasi-civilian government took office a year ago and has started overhauling the economy, easing media censorship, legalizing trade unions, allowing public demonstrations, freeing political prisoners and agreeing to cease-fires with ethnic minority rebels.
Nobel Peace Prize laureate and pro-democracy leader Aung San Suu Kyi now has a seat in Parliament. Businesses are eager to enter Burma to take advantage of its energy and mining resources and to exploit its low-cost labour market.