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Gov’t Should Now Decide to Enter TPP Talks (Yujiro Oiwa, Planning Committee Member of JINF and Professor at Tokyo International University)

h0330 / 2013.01.16 (Wed)

Speaking Out #175

The Japanese government has remained vague about Japan's participation in negotiations on the Trans-Pacific Partnership free trade agreement for the reason that the ruling Liberal Democratic Party's manifesto raised opposition to the “elimination of all tariffs without exception” as a principle for the TPP initiative. The purpose of Japan's participation in the negotiations is to secure its national interests over a medium to long term. Then, what does the exception specifically mean? Does the protection of the exception meet national interests?


Protection of vested interests is against national interests
The exception is thought to be applicable to the agricultural sector as a matter of course. Japan's agriculture has lapsed into a moribund condition as a result of the government's agriculture protection policy. The government has provided protection to part-time farmers accounting for the majority of farmers in Japan and agricultural cooperatives for political reasons. The policy has weakened the potential of full-time farmers and the entire agriculture, causing a vicious circle prompting farmers to grow more dependent on government protection. The present protection policy benefits certain groups to the disadvantage of able full-time farmers and consumers, instead of serving national interests.
In order to revitalize agriculture, the government should end stereotyped farming family protection, integrate farmlands, eliminate the rice acreage reduction policy and give full-time farmers the freedom of production. At the same time, it should nurture and enhance full-time farmers by providing subsidies only to full-time farmers vulnerable to price drops and by encouraging them to increase production beyond domestic demand and export surplus output. Such new agriculture policy will serve national interests. To realize the new policy, Japan should positively participate in the TPP which seeks for the expansion of a free competition market and should explore the fast-growing Asian market.
In fact, tariffs will not be eliminated immediately under the TPP agreement. For some products, a tariff adjustment period of at least 10 years will be provided. In the agricultural area, even the United States has sought to except sugar and textile products from the tariff elimination, indicating that some agreement could be reached on exceptions. The Japanese government should avoid any delay in the TPP negotiation participation that could lead Japan to lose an opportunity for reflecting its claims in the rule-making process to the disadvantage of its national interests.


Contributing to sound development of Pacific Rim region
The TPP initiative is designed to create a high-level economic and trade framework suitable for the 21st century among countries that share universal values including democracy and the rule of law. Through its participation in the TPP talks, Japan should cooperate with the United States in promoting a close economic and security partnership and creating rules for trade, investment and intellectual property protection. Such Japan-U.S. cooperation will be indispensable for the Asia-Pacific region’s sound development and help check China’s fast rise.
Japan’s moves toward its participation in the TPP talks have prompted Mexico and Canada to take part in the talks and accelerated Japan-China-South Korea free trade negotiations. Furthermore, Thailand has offered to participate in the TPP talks, accelerating the process for creating a giant free trade market. The TPP talks will make progress even without Japan’s participation. If Japan fails to take part in the talks, however, its political and economic influences will decline substantially.
We must remember that Japan’s participation in the TPP talks and agreement will pave the way for its stable imports of U.S. shale gas, contributing to its stable energy supply as its top priority.
If the government delays its participation in the TPP talks by giving priority to a safer approach on July’s House of Councilors election, it will narrow the room for Japan to reflect its claims in TPP trade and investment rules, affecting Japan’s national interests. The government should put an end to the current unproductive debate confusing national interests with individual interests or benefits and immediately decide to participate in the TPP talks.


Yujiro Oiwa is a JINF Planning Committee Member and Professor at Tokyo International University.