Pak-Japan Relationship                  

Japanese

         The diplomatic relations between Pakistan and Japan were established in April 1952. Since then the
bilateral relations had progressed steadily. Both the countries had unanimous views during the Korean War
in early 1950s as well as in the cold war. The understanding between the two counties further enhanced in
the 1980s: during the Afghan conflict; and after the withdrawal of Soviet forces in the late 1980s.

          Although the bilateral relations saw a difficult phase following the nuclear tests conducted
by Pakistan in 1998, the engagement at the political level continued. This was evident by the visit of Prime
Minister Yoshiro Mori to Pakistan in August 2000. This visit clearly indicated Japan's interest to continue
highest level engagement

           In the 2001 year, Pakistani s Foreign Minister and Finance Minister visited Japan in March and
November respectively.

          Following the 9/11,Japan appreciated Pakistan's vital role in the war against terrorism. Senior Vice
Foreign Minister Seiken Sugiura and Foreign Minister Makiko Tanaka visited Pakistan in October and
November 2001 to extend Japan s support toPakistan in the war against terrorism.

          The bilateral relations took upward swing since then. Later Foreign Minister Yoriko Kawaguchi
visited Pakistan on 10-14 August, 2004.

          Foreign Minister Khurshid Mahmood Kasuri visited Tokyo on 21-24 February, 2005. This was
followed by the visit of the Japanese Foreign Minister Nobutaka Machimura to Islamabad to attend the
Fourth ACD Ministerial Meeting on6 April, 2005. Japanese Foreign Minister Taro Aso paid visit to Pakistan
on 4-5 January, 2006.

          Japanese Foreign Minister Masahiko Koumura visited Pakistan on 2-4 May, 2008. The main objective
of the visit was to convey the message to the new Government that Japan attaches great importance to,
and support, Pakistan s efforts for eradicating terrorism, consolidating democracy and sustaining growth.
The visit strengthened the bilateral relations.

High Level Visit

        President Pervez Musharraf visited Japan on 12-15 March, 2002. The two sides agreed to
institutionalize economic and security cooperation between the two countries.

         Japanese Prime Minister Junichiro Koizumi visited Islamabad on 30 April–"^st May, 2005.
The high point of the visit was the First-ever Pakistan-Japan Joint Declaration entitled “Pakistan-
Japan at a new frontier; towards a renewed, enhanced and robust relationship”. The other
significant aspect of the visit was the achievement regarding the resumption of Yen Loan for Pakistan after
a gap of seven years.

          In the same year, Prime Minister Shaukat Aziz paid a visit to Japan from 8-11 August,
2005.                  

Bilateral Consultations

        Currently, the two countries are engaged in negotiations under following mechanism:

        i.       Annual High Level Policy Consultation.

ii.       Security Dialogue.

        iii.     Consultation on Disarmament and Non-Proliferation.

        iv.     Counter-Terrorism Cooperation.

        v.      Economic Policy Dialogue.

        The economic relations began by Japan s Technical Assistance to Pakistan in 1954, Yen Loan in 1961
and grand aid in 1970. In the wake of nuclear tests in May 1998,Japan suspended Yen Loan and grants
except those for humanitarian and emergency purpose.

            However, after 9/11Japan suspended economic sanctions on26 October, 2001. In support
of Pakistan s role in the fight against terrorism, Japan approved emergency economic assistance of Yen 3
billion (approximately .US$ 28 million). Later in November 2001, US$ 300 million as grant aid was
announced, which included US$ 28 million. Earlier, Japan had contributed US$ 1 billion to IMF s Poverty
Reduction Growth Fund (PRGF) of which at least half the amount was intended for Pakistan.

Economic Dialogue

         In order to boost bilateral economic relations President Musharraf and Prime Minister Koizumi
agreed in March 2002 from Economic Policy Dialogue with the objective of eventual resumption of ODA.
In September 2003, a Working Level Pakistan-Japan Economic Policy Dialogue was held in Tokyo. The First
Round of Dialogue was held in February 2004 in Islamabad. The Second Round of Dialogue was held in
Tokyo on21 July, 2005. The Dialogue focused on the Economic Cooperation and Trade and Commercial
Relations including investment.    The Third Round of Economic Policy Dialogue between the Government
of Pakistan and the Government of Japan was held in July 2007 in Islamabad. . The two sides received the
progress and exchanged vies on enhancing economic relations between the two countries. The fourth
round is expected to be held in Tokyo in the second half of 2008

Country Assistance Program for Pakistan

        Japan s Country Assistance Program for Pakistan (2005-2010) declares “construction and
development of a Sustainable Society in Pakistan” as the medium and long term goal of Japanese
ODA. According to program, gender environment and governance assume prime importance.

Yen Loans Resumption

         Prime Minister Koizumi, during his visit to Pakistan on 30 April-1 May, 2005, signaled the
resumption of Yen Loans to Pakistan. In 2005, Japanese Government committed Yen Loan for two projects
amounting to US$ 156 million. However, in 2006 the Japanese Government selected another two projects
amounting to US$ 270 million.

         The amount of ODA for 2007 has almost doubled to US$ 470 million for the five projects. The
necessary procedure for the selection of projects for 2008 is underway.

FTA/PTA

         During the President s visit to Tokyo in March 2002, the two sides agreed to conclude a bilateral
Free Trade Agreement (FTA) or a Preferential Trading Agreement (PTA).

         Later, the Joint Study Group consisting members of the private sector of the both countries, was
constituted. The first Joint meeting of Study Group was held in Tokyo on 25-27 October, 2007. The second meeting was in Karachi on 21-23 July, 2008.

Revision of Double Taxation Agreement

        Pakistan and Japan had concluded Avoidance of Double taxation Convention in 1959. The two
countries started negotiations to revise the convention. Finally on17 May, 2007, the Agreement was
concluded in Islamabad.  While the Government of Pakistan has ratified the treaty, the ratification process
in Japan is expected to be completed by the end of year 2008.

Bilateral Trade

         In 1950s and 1960sPakistan mainly exported raw cotton to Japan and later value added items like
yearn and fabric. However, owing to skill-intensive goods, the balance of trade has always been in the
favour of Japan.

Japanese Investment in Pakistan

         In 1995-96,Japan became the 3^rd largest investor in Pakistan, after the US and UK. The major sectors
of Japanese investment are automobile, finance and power.

         In the wake of8 October, 2005, the Government of Japan dispatched Disaster Relief Teams and
extended emergency assistance. Beginning on10 October, 2005, a 49-member Disaster Relief and
Assistance team conducted search and rescue operation in the earthquake affected areas.

         Initially the Japanese Government provided relief assistance of worth Yen.25 million. Later the
Government of Japan announced an Emergency Grant Assistance of US$ 20 million. Moreover, US$ 50
million was spent on the rescue and relief operation conducted by the Japan Self-Defense Force (JSDF). At
the International Donors  Conference held in Islamabad on19 October, 2005, Mr. Yasuhisa Shiozaki, Senior
Vice Foreign Minister pledged US$ 100 for meeting the financial demand for emergency re-construction.
Later, Foreign Minister Taro also during his visit to Islamabad on 4-5 January 2006 announce grant of
approximately US$ 55 million.

Japan-Pakistan Defense Cooperation

        Japan s Defense Minister Yuriko Koike visited Pakistan on 22-23 August, 2007. It was the first ever
visit of any Japanese Defense Minister to Pakistan.

Operation Enduring Freedom Maritime Interaction Operation (OEF-MIO)

         The Maritime Self-Defense Force of Japan has been providing logistical support to Pakistan Naval
Ships deployed in the Indian Ocean under OEF-MIO.

Education Cooperation