Japan, Ukraine start talks on investment treaty, PM says

TOKYO, Feb 19 —Japan said on Monday it had started negotiating an investment treaty with Ukraine and vowed to keep up support for the reconstruction of the country almost two years after Russia’s invasion.

Japanese Prime Minister Fumio Kishida also pledged a new bilateral tax treaty, support for venture capital companies in Ukraine and an easing of visa controls as he hosted his Ukrainian counterpart Denys Shmyhal in Tokyo.

Kishida did not give more details on the investment treaty but Shmyhal later said on Telegram that Japan would allocate 1.25 billion euros ($1.35 billion) to support Japanese investors in Ukraine in a programme in two parts.

“These are, in particular, guarantees for Japanese investors, as well as a credit line for Japanese goods export to implement projects to restore Ukraine,” Shmyhal said.

Shmyhal said that he hoped to see major carmakers, including Toyota 7203.T, create production facilities in Ukraine.

Since Russia invaded Ukraine on Feb. 24 2022, Japan has pledged more than $10 billion worth of financial aid. It cannot provide direct military support under its own regulations.

Shmyhal added that Ukraine expects to receive a $4.7 billion grant from Japan by the end of February. The countries had previously announced aid of around that much, but had not confirmed when it might arrive.

The funds from Japan are critically important for Kyiv as budget aid from other allies has been delayed.

The meeting follows months of wrangling in the United States over a $95.34 billion military aid package for Ukraine and others, with President Joe Biden pushing for its passage amid opposition from Republican hardliners.

“Japan has stood with and continues to stand with Ukraine,” Kishida said in a speech opening the talks.

Kishida said government agency JETRO would open a new office in Kyiv.

About 50 Japanese companies signed deals with Ukrainian counterparts at the conference, in areas including agriculture, energy and infrastructure. The total value of the deals was not disclosed.

Both men said they were preparing the ground for the Ukraine Recovery Conference in Germany in June in a joint communique issued after the meeting.

Ukraine President Volodymyr Zelenskiy later thanked Kishida and the Japanese people for the support.

“The Ukraine-Japan cooperation is gaining momentum and we are looking forward to further realizing its full potential in many areas, including recovery, where Japan has unique expertise and experience,” Zelenskiy said on X. —Reuters

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