Iran’s “nuclear development problem can’t be ignored by the world, so from that perspective we understand the U.S. actions,” Finance Minister Jun Azumi told reporters after meeting with U.S. Treasury Secretary Timothy Geithner, who was visiting Tokyo after two days in Beijing.
“We plan to start reducing this 10 percent share as soon as possible in an orderly manner,” he said.
Japan‘s quick agreement contrasts with China’s public silence on the matter during Geithner’s visit there. A diplomat who briefed reporters about an upcoming Middle East trip by Premier Wen Jiabao repeated earlier government statements rejecting sanctions as a way to resolve the dispute with Iran.
Geithner’s trip to Asia’s two largest economies is part of a global lobbying effort to win support for the sanctions aimed at halting what Western governments say is Iran’s effort to develop nuclear weapons. The sanctions, targeting the oil industry, would bar financial institutions from the U.S. market if they do business with Iran's central bank.
Iran has threatened to respond to sanctions by shutting the Strait of Hormuz, a transit route for a fifth of the world’s oil.
Geithner told reporters in Tokyo that the U.S. was working closely with “countries around the world to substantially increase the amount of pressure we bring on Iran” by cutting off “the central bank from the international financial system and to reduce the earnings Iran derives from its oil exports.” He characterized the effort as being “in the early stages.”
China has criticized the new sanctions, approved by President Barack Obama on New Year’s Eve, as improper and ineffective. Beijing supported U.N. sanctions on Iran’s nuclear program but says action should be multilateral.
“To place one country’s domestic law above international law and press others to obey is not reasonable,” Foreign Ministry spokesman Liu Weimin said Wednesday.
Experts said Tokyo’s move to reduce imports from Iran would likely have limited negative impact on Japan‘s economy as the country would probably be able to increase imports from other major oil producers such as Saudi Arabia and the United Arab Emirates.
But the sanctions — and accompanying geopolitical tension — could raise global oil prices and undermine the world economy.
“We’re more concerned about the risk of the Iran problem becoming bigger and possibly leading to global economic instability through a possible increase in oil prices,” said Hiromichi Shirakawa, chief economist for Japan at Credit Suisse in Tokyo.
The timing is also bad for Japan as it already faces an energy crunch. Most of its 54 nuclear power plants are offline because of routine inspections, mechanical problems or stress tests after last March’s radiation crisis at the Fukushima Dai-ichi plant.
The U.S. intends to send a team to Tokyo to consult with Japanese officials on how they will carry out the plans, Geithner told public broadcaster NHK later.
China, the world’s biggest energy consumer, depends on Iran for 11 percent of its oil imports. China bought about 600,000 barrels of Iranian crude per day in November, nearly one-third of Iran’s daily exports of 2.2 million barrels, making Chinese cooperation key to the success of sanctions.
A U.S. Treasury official also traveling in Asia said Thursday he discussed the sanctions with Philippine and Thai officials, but no commitments were made.
Deputy Treasury Secretary Neal Wolin told reporters in Manila that among the two countries’ officials, there appears to be “a broad desire to be helpful here and cooperative.”
“The leaders of Europe appear to be making some progress in containing their crisis,” Geithner said, adding that the U.S. was “fully prepared to support a more substantial role” by the International Monetary Fund in supporting the European response.
In a veiled reference to China, Geithner said the U.S. wants to see a stronger commitment by emerging economies in the Group of 20 to flexible exchange rates. The U.S. contends Beijing keeps its yuan undervalued, giving its exporters an unfair price advantage.
“We want to see those emerging market currencies that are undervalued continue to appreciate against the major currencies, against the dollar, the yen and the euro,” Geithner said.
• Associated Press writers Joe McDonald and Louise Watt in Beijing, Selcan Hacaoglu in Ankara and Teresa Cerojano in Manila contributed to this report.
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