BANGKOK, Thailand - It's a summit that's supposed to be dedicated to economies and Japan's is the second largest in the world behind the United States. But as the annual gathering of Pacific Rim leaders wrapped up last Tuesday, Japanese Prime Minister Junichiro Koizumi found himself largely relegated to playing follow-the-leader.

Instead of economy and trade, the summit - formally known as the Asia-Pacific Economic Co-operation forum - was dominated by US President George W. Bush's anti-terrorism agenda.

China, not Japan, was being looked to as the regional powerhouse. And, on the main non-security issue raised - free trade agreements - Japan remained a cautious outsider.

"Japan is not exercising leadership in Asia commensurate with the size of its economy," said Mitsuru Saito, chief economist at UFJ Tsubasa Securities, a Japanese brokerage in Tokyo. "Japan's government is more concerned with preserving good relations with the United States than with taking a leadership role in Asia."

Perhaps nowhere was the gap between Japan and the APEC mainstream more apparent than on the issue of how to deal with North Korea.

While agreeing with the US and others on the need to continue six-way talks bringing together North and South Korea, China, Russia, the US and Japan, Koizumi struggled to win an explicit vow of support to solve an issue that concerns many Japanese even more than North Korea's nuclear weapons development.

Japan circulated a draft statement specifically calling for a solution to the issue of North Korea's abductions of Japanese citizens - at least a dozen of whom were kidnapped in the 1970s and 80s and taken to North Korea to train spies.

China, in particular, opposed a joint statement to that effect, saying it was a bilateral issue between North Korea and Japan.

"There were some who felt it might exacerbate things," Koizumi acknowledged.

Decreasing influence

Koizumi's troubles started before APEC. Before arriving in Bangkok, Koizumi hosted Bush for an overnight stay in Tokyo. Although the visit followed an announcement by Japan that it was answering Bush's call for money to support the reconstruction of Iraq by pledging US$1.5 billion next year, a senior US official outlining Bush's agenda described the Tokyo stop as a "layover."

In sharp contrast to China, which has seen strong growth, Japan is still struggling to climb out of its economic slump, another factor that has put Koizumi on the defensive.

In the first day of talks, Koizumi, who faces nationwide parliamentary elections next month, tried to reassure the APEC leaders that the worst is over for Japan's economy - a message he has also directed at the voters back home.

"We are finally seeing bright signs," he was quoted as saying by a senior delegation official.

While a Japanese economic recovery is welcome, it is unlikely to sway the long-term regional influence shift towards China, the ascending trading power in Asia.

For all its billions of dollars in official development assistance and foreign investment, and promises by Koizumi to make Japan a more attractive target for foreign investment, Tokyo has lagged behind in efforts to forge free trade agreements, a topic that featured prominently in the talks here.

Koizumi and South Korean leader Roh Moo-hyun agreed to ink a trade pact by the end of 2005. Thailand is also seeking a free trade arrangement with Japan.

Tokyo has not rushed to make deals, however.

Japan currently has just one such pact, with Singapore. Talks with Mexico broke down last week and delegation officials said concerns are already being expressed that an agreement with Thailand could hurt Japanese rice farmers.

In South Korea, meanwhile, the Korea Herald newspaper warned that a trade pact with Japan could make that country "a client."

"Countries are hoping Japan will open its markets further," said economist Saito. "They are disappointed in this respect - and at the same time, Japan's influence may be decreasing."

(Agencies via Xinhua)