2011/10/07
One important trade policy question facing the government is whether Japan should participate in talks on a Trans-Pacific Partnership (TPP) agreement.
Nine Pacific Rim countries, including the United States and Australia, are currently engaged in negotiations with an eye to striking a deal on an outline of the agreement in November.
This target date sets a timeframe for Japan to decide whether to join the TPP talks.
We have been calling on the government to join the talks. The TPP accord has the potential to become the foundation for free flows of goods and services in the fast-growing Asia-Pacific region.
Japan has an obvious interest in helping to develop the TPP rules if it wants to avoid being at a disadvantage in regional trade.
It should at least join the negotiations. If it then concludes the trade pact doesn't serve its interest, it can simply decide not to sign it.
The government had said it would wait until June to announce whether it will join the talks. But the decision was put off due to March 11 Great East Japan Earthquake.
In the meantime, a broad array of concerns about the TPP has been raised by various people and businesses in Japan.
To put the process of developing Japan's policy for the trade talks on track, the government needs to explain the current state of negotiations so that cool-headed, fact-based debate on the issue can be held.
The main obstacle to Tokyo's participation in the TPP negotiations lies in the agricultural sector, where many products are protected by high tariffs from international competition in the domestic market. Rice is the most notable example.
One of the TPP's basic principles calls for trade liberalization without an exception. In the actual negotiations, however, the participating countries are seeking to exempt certain items to ease opposition to free trade in the products from related industries.
The United States, which is leading the talks, has had some farm products, including sugar, exempted from its bilateral free trade agreement with Australia. Washington has also made sure that the process of phasing out the tariffs on many other products will be stretched over a period longer than the 10-year limit imposed by the principles for trade talks.
The United States has adopted a similar strategy for the TPP negotiations.
Japanese farmers and others in the agricultural sector have voiced concern that participation in the TPP could lead to the immediate scrapping of tariffs on all products. But that fear is unfounded.
Japan should adopt a strategic approach to deal with the challenge. The government should act swiftly to put together a package of policy measures to bolster the international competitiveness of Japanese agriculture, including steps to promote larger-scale farming. It also should seek through the negotiations to secure the time and terms that allow it to implement such measures.
But concerns over the trade pact are not limited to the abolition of tariffs.
Some TPP critics warn that the agreement would lead to massive inflows of unskilled foreign workers, while others predict that Japan would be forced to fundamentally revamp its public health care system.
Opponents also argue that the pact would undermine Japan's efforts for environmental protection while forcing the nation to import food products from countries that don't adopt food safety standards that are as strict as those in Japan.
These opponents are raising issues of so-called social regulation, or government regulation that addresses specific social problems such as pollution and product safety. These issues should be discussed from viewpoints other than the revitalization of the economy, which is the principal justification for most arguments for deregulation.
Based on information they have collected, Japanese trade officials claim that many of the concerns that have been raised in relation to the TPP are not founded in the actual topics at the negotiation table.
To allay unnecessary anxiety about the TPP, the government should offer detailed explanations about how the talks are going and its own thoughts about the trade agreement.
With the yen stuck at historically high levels against other major currencies, there is mounting concern about the hollowing-out of Japanese industries.
Besides the elimination of tariffs, the TPP talks are also addressing many issues that are important from the viewpoint of promoting Japanese exports, such as the simplification of trade procedures.
Policymakers should explore ways to overcome the differences in domestic opinion over the TPP, which are simplified as conflict between agriculture and manufacturing. They need to figure out a formula for using the TPP as a means to re-energize Japanese industry. That is a key trade policy mission for the administration of Prime Minister Yoshihiko Noda.
--The Asahi Shimbun, Oct. 5
One important trade policy question facing the government is whether Japan should participate in talks on a Trans-Pacific Partnership (TPP) agreement.
Nine Pacific Rim countries, including the United States and Australia, are currently engaged in negotiations with an eye to striking a deal on an outline of the agreement in November.
This target date sets a timeframe for Japan to decide whether to join the TPP talks.
We have been calling on the government to join the talks. The TPP accord has the potential to become the foundation for free flows of goods and services in the fast-growing Asia-Pacific region.
Japan has an obvious interest in helping to develop the TPP rules if it wants to avoid being at a disadvantage in regional trade.
It should at least join the negotiations. If it then concludes the trade pact doesn't serve its interest, it can simply decide not to sign it.
The government had said it would wait until June to announce whether it will join the talks. But the decision was put off due to March 11 Great East Japan Earthquake.
In the meantime, a broad array of concerns about the TPP has been raised by various people and businesses in Japan.
To put the process of developing Japan's policy for the trade talks on track, the government needs to explain the current state of negotiations so that cool-headed, fact-based debate on the issue can be held.
The main obstacle to Tokyo's participation in the TPP negotiations lies in the agricultural sector, where many products are protected by high tariffs from international competition in the domestic market. Rice is the most notable example.
One of the TPP's basic principles calls for trade liberalization without an exception. In the actual negotiations, however, the participating countries are seeking to exempt certain items to ease opposition to free trade in the products from related industries.
The United States, which is leading the talks, has had some farm products, including sugar, exempted from its bilateral free trade agreement with Australia. Washington has also made sure that the process of phasing out the tariffs on many other products will be stretched over a period longer than the 10-year limit imposed by the principles for trade talks.
The United States has adopted a similar strategy for the TPP negotiations.
Japanese farmers and others in the agricultural sector have voiced concern that participation in the TPP could lead to the immediate scrapping of tariffs on all products. But that fear is unfounded.
Japan should adopt a strategic approach to deal with the challenge. The government should act swiftly to put together a package of policy measures to bolster the international competitiveness of Japanese agriculture, including steps to promote larger-scale farming. It also should seek through the negotiations to secure the time and terms that allow it to implement such measures.
But concerns over the trade pact are not limited to the abolition of tariffs.
Some TPP critics warn that the agreement would lead to massive inflows of unskilled foreign workers, while others predict that Japan would be forced to fundamentally revamp its public health care system.
Opponents also argue that the pact would undermine Japan's efforts for environmental protection while forcing the nation to import food products from countries that don't adopt food safety standards that are as strict as those in Japan.
These opponents are raising issues of so-called social regulation, or government regulation that addresses specific social problems such as pollution and product safety. These issues should be discussed from viewpoints other than the revitalization of the economy, which is the principal justification for most arguments for deregulation.
Based on information they have collected, Japanese trade officials claim that many of the concerns that have been raised in relation to the TPP are not founded in the actual topics at the negotiation table.
To allay unnecessary anxiety about the TPP, the government should offer detailed explanations about how the talks are going and its own thoughts about the trade agreement.
With the yen stuck at historically high levels against other major currencies, there is mounting concern about the hollowing-out of Japanese industries.
Besides the elimination of tariffs, the TPP talks are also addressing many issues that are important from the viewpoint of promoting Japanese exports, such as the simplification of trade procedures.
Policymakers should explore ways to overcome the differences in domestic opinion over the TPP, which are simplified as conflict between agriculture and manufacturing. They need to figure out a formula for using the TPP as a means to re-energize Japanese industry. That is a key trade policy mission for the administration of Prime Minister Yoshihiko Noda.
--The Asahi Shimbun, Oct. 5
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