Japan must act fast to make up lost time in TPP talks

At last Japan has entered talks on the Trans-Pacific Partnership multilateral trade agreement, which have so far been conducted by 11 countries, including the United States.

Regarding Japan's participation in the TPP negotiations, Prime Minister Shinzo Abe has stressed, "We will make full use of our negotiating power to protect what needs protecting and push for what we want, to seek the best way to serve national interests." To ensure that this country can make up for the time lost due to its late entry into the TPP talks, the government must beef up its defensive and offensive strategies.

The latest round of TPP negotiations took place in Malaysia from July 15, and Japan joined the talks as the 12th member for only two and a half days in the final phase of the round that ended Thursday.

By taking part in the talks, Japan received for the first time a pile of texts on the TPP negotiations comprising 29 chapters on such subjects as abolition of tariffs, intellectual property rights and investment.

It is of great significance that Japan can now grasp the entire picture of issues that have been discussed among TPP members.

The next TPP gathering is scheduled for late August in Brunei, while consultations on the TPP between Japan and the United States will be conducted in parallel with the Brunei round from August on.

The government must waste no time working out how to deal with the increasingly accelerating pace of the TPP talks by making a detailed analysis of the assertions of each participant country.

The US and some other TPP participants have set a goal of finalising a basic agreement in the negotiations by October and concluding the talks by the end of the year.

However, the TPP countries are still at loggerheads regarding the abolition of tariffs, the main point of contention, which has apparently caused the negotiations to stall.

Given the current pace of the talks, it is unlikely they will be concluded by the end of the year. Indications are that the negotiations may continue into next year.

Although Japan, as a late starter, remains in a difficult position in the negotiations, prolonged talks may give Japan more room to make up for lost time.

In its platform for the recent House of Councillors election, the Liberal Democratic Party pledged to "give top priority to securing exemption of five agricultural products", including rice and wheat, from tariff abolition.

In the upper chamber election, Toshio Yamada of the Central Union of Agricultural Cooperatives (JA Zenchu) secured his re-election as one of the highest-ranking winners in the proportional representation contest. Yamada has pledged to press the government to protect national interests without fail in the TPP talks.

While some LDP legislators remain firmly opposed to the TPP, the government and the LDP must buckle down to swiftly push ahead with concrete measures for improving the competitiveness of the nation's agriculture, in preparation for further opening of the domestic farm market to foreign competition.

Given that the TPP is aimed at a high degree of trade liberalisation, protecting rice and other farm products as exemptions from tariff abolition will not necessarily secure Japan's national interests.

A well-balanced strategy must be hammered out in this respect.

Of higher importance for Japan is to "go on the offensive" by increasing exports of motor vehicles and electronics through tariff abolition, as well as establishing an environment conducive to business activity through such steps as lifting restrictions on capital investment from abroad.

The envisaged TPP pact will constitute a huge free-trade zone, accounting for about 40 per cent of the world's gross domestic product.

Japan must utilise the TPP to tap the vigor of other economies in Asia, to spur the nation's economic growth.

July 28, 2013

Source: Yomiuri