Most Singapore exports to Japan are already tariff-free due to the trade agreement that the two nations signed in 2002.

Five other Asean members also have their own deals with Japan, but yesterday's deal is likely to be of greater gain to those that do not - Cambodia, Laos, Myanmar and Vietnam - by removing tariffs for about 90 per cent of goods.

The real benefit of the deal - the Asean-Japan Comprehensive Economic Partnership Agreement - to nations like Singapore is likely to be more diplomatic than economic.

'Beyond the tangible gains are strategic benefits, as the agreement is a building block from the Japan-Singapore trade agreement,' said Trade and Industry Minister Lim Hng Kiang. 'Deepened Asean-Japan relations...means another essential link between Asean and a key economic partner in the wider regional architecture.'

Japan is Asean's second-largest trading partner and Singapore's fifth-largest, and the deal will cover 96 per cent of the Republic's trade volume.

The deal also includes new guidelines on rules of origin and health safeguards for food exports.

More relaxed origin rules will allow Asean manufacturers to source raw materials from anywhere within the region but not encounter tariffs when exporting products assembled from these materials to Japan. Previously, tariffs would have been levied on such exports.

It will also be easier for Japanese manufacturers to do business in the region.

'It's better for Japanese multinationals with regional headquarters covering the Asean region. Japanese manufacturers often assemble their products in several Asean countries. This deal will make it easier for them to comply with rules of origin,' said Mr Eiji Hisatomi, deputy managing director of the Japan External Trade Organisation's Singapore office.

Food and health regulations that are a problem for many firms in the food and beverage industry will also be addressed in greater detail.

It will mean good news for companies such as barbecued pork maker Fragrance Foodstuff, which has been deterred from exporting to Japan because of its stringent standards.

'The agreement will definitely be a great help for us, and we will be looking at selling our product in Japan, if these issues can be resolved.' said Mr Tan Cheng Kwee, 23, the son of Fragrance's owner.

Asean inked free trade deals with China in 2002 and South Korea in 2005, and is in talks with India, Australia and New Zealand for new agreements. Asean will also continue to negotiate with Japan on terms regarding the services and investment sectors.

'Deepened Asean-Japan relations... means another essential link between Asean and a key economic partner in the wider regional architecture.'

TRADE AND INDUSTRY MINISTER LIM HNG KIANG, on one benefit of the trade deal between Asean and Japan