Friday 22 June 2018

Japan to join talks on Pacific trade accord

Tokyo, March 16, 2013

Prime Minister Shinzo Abe yesterday announced that Japan will join talks on a Pacific trade pact that would oblige the country to open up sheltered industries, including farming, long a bastion of protectionism.

The decision to seek participation in the US-led Trans-Pacific Partnership, or TPP, raised protests from farmers, who are a traditional bastion of support for Abe's Liberal Democratic Party.

Many in Japan, however, see the pact as a way to overcome stubborn resistance to reforms essential for reviving the stagnant economy. In a national address, Abe said Japan has no choice but to opt for the growth that comes with freer trade or lose out to other countries that are capitalising on such market opening.

"Japan has run into a big wall - low birthrate, aging and lingering deflation - and we have turned inward looking," he said. "If Japan becomes the only one that turns inward, there is no chance for our growth. No businesses would want to invest in such a country and talented people would not be interested."

"Joining TPP would be the beginning of a new Japan," Abe said.

He repeatedly pledged to guard Japan's national interest and ensure that the trade pact would benefit farmers as well as other Japanese.

"What we really should fear is doing nothing," Abe said. "I promise you that we will guard our sovereignty as we pursue our national benefit through these negotiations."

Despite such promises, Japan's tariffs on farm products would likely have to come down: the average tariff on imported rice is nearly 800 per cent, while rates for butter and sugar are more than 300pc.

The decision to join the talks dovetails with his "Abenomics" economic strategy, which is based on easing monetary policy, boosting public spending and longer-term reforms.

Japan's agricultural lobby is small but politically powerful. However, after two decades of stagnation, calls by big business groups such as the Keidanren to join the trade pact or miss out on easier access to key export markets appear to have outweighed objections from farmers.

Reports yesterday said the government estimates that joining the Pacific trade agreement would boost Japan's GDP by as much as three trillion yen ($31 billion) a year, equal to about 0.7 per cent of GDP in the first year.-Reuters

Tags: Japan | Pacific |


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