Russian-Japanese trade takes precedence over the territorial dispute

President Putin started the main day of his visit to Japan by attending a Russian-Japanese business forum. He then spent almost three hours in talks with Prime Minister Junichiro Koizumi. Eighteen agreements were signed in the presence of the two leaders.

Gas and oil have outweighed the islands: such are the results of President Vladimir Putin’s visit to Japan. Putin spent almost all of yesterday talking to Prime Minister Junichiro Koizumi, and afterwards Koizumi mentioned the “unprecedentedly good atmosphere” which is “developing in bilateral relations.” Eighteen agreements were signed in the presence of the two leaders, along with a protocol indicating the completion of Russian-Japanese talks on Russia’s accession to the World Trade Organization. Analysts are saying that this is the most Putin could have hoped to achieve in Japan. But Koizumi also achieved his objective: a public assurance from Putin that the search for a solution to the territorial dispute will continue.

Putin started the main day of his visit by attending a Russian-Japanese business forum. This is entirely consistent with Moscow’s chosen tactics in relations with Tokyo: if we focus on the economy rather than the islands, it might then become easier to discuss the islands (until recently, Japan maintained that trade volumes should depend on the amount of concessions made by Russia with regard to the “Northern Territories”). Executives at the forum were entirely supportive of these tactics. One forum participant said: “For us, the islands and business are separate issues. Let the politicians sort out the disputed territories, while we trade with Russia.”

The executives handed Putin a document entitled “Requests for the Government”; in return, he promised to take account of all requests, and set off to meet with Prime Minister Koizumi. Their conversation lasted almost three hours, rather than the scheduled two hours. Both leaders then moved to the press conference hall. Before their press conference, however, the joint documents had to be signed.

Whether due to confusion or deliberately, Koizumi suddenly invited Putin to sit down at the table (the plan was for ministers and business executives to sign the documents in the presence of Putin and Koizumi), thus causing a slight commotion – only the most important agreements are signed by heads of state. But the hitch was quickly resolved; Putin remained standing, and so did Koizumi.

Most of the agreements were entirly economic. From 2008, according to Putin, liquefied natural gas from Russia will start being delivered to Japan; the contracts regarding volumes have already been signed.

But in order to acquire this gas, Japan will have to invest in building new gas processing facilities in the Russian Far East; the agreements cover this possibility. Another reason for Koizumi’s remark about an “unprecedentedly good atmosphere” was the Taishet-Nakhodka oil pipeline (Japan had competed with China for some time regarding this pipeline’s destination); it was mentioned repeatedly yesterday.

These two projects were enough to make Putin and Koizumi use the mildest possible expressions in talking about the islands publicly. “I am absolutely sure that given goodwill, and such goodwill does exist in Russia, we will find an option that satisfies both sides and the residents of those territories,” said Putin, quoting himself from a transcript of an earlier statement. Koizumi politely declined to answer a question about whether he likes joint agricultural activities in the Kuriles. “I won’t speculate about how consultations will develop, or what kind of joint projects there may be, but consultations at various levels will continue,” said Koizumi.

Nevertheless, Japan is not going to wait too long. “It is the objective of both leaders to solve the problem of the Northern Territories and to sign a peace treaty,” Koizumi declared yesterday. That means that Koizumi intends to find a solution in the foreseeable future – ideally, before Russia’s presidential election in 2008. But Putin maintains that time is not the issue. Resolving such a complicated problem is unlikely to be easy; it requires mutual goodwill, a long-term view, and statesmanlike thinking.” The answer to such a “sensitive” question, according to Putin, should be sought “on the basis of partnership, mutual respect, and reciprocal trust.”