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Corporate boss leads charge for free trade

The Australian

Corporate boss leads charge for free trade

Peter Alford, Tokyo correspondent

January 31, 2007

FUJIO Mitarai, the Nippon Keidanren chairman who leads a powerful business mission to Australia at the weekend, belongs to the Japanese establishment’s inner elite. His position is often described as "prime minister of business".

Because the business establishment aligns so closely with the Liberal Democratic Party, the political establishment, and the Nippon Keidanren (Japan Business Federation) chairman exercises similar sway over his colleagues as the actual prime minister does over his cabinet, it’s perhaps not surprising that close associations form between the two office holders.

Hiroshi Okuda, the Toyota Motor Co chairman who finished his four-year term as Keidanren chairman in May, was very tight with Junichiro Koizumi, who retired in September.

Mitarai, the 70-year-old Canon chairman who as group president oversaw one of the most dazzling turnarounds by a big Japanese corporation in the last decade, appears every bit as influential.

The first Keidanren president not to come from a heavy manufacturer, Mitarai has Shinzo Abe’s ear on economic matters and he in turn strongly supports the Prime Minister’s social views.

So much so that many eyebrows lifted at the pronounced similarities between Abe government policy objectives and "Land of hope, Japan", Keidanren’s prospectus for renovating the Japanese economy, released on January 1.

The document is fairly conventional in its prescriptions for realising economic growth, public sector fiscal consolidation, taxation and labour market reform.

However, the "Mitarai vision" is surprisingly outspoken in its call for educational reform that not only improves technical standards but promotes "Japan’s traditions, culture and history" and nurtures "people’s love for the country and respect for the national flag and anthem".

Almost word for word, that describes Abe’s ideological program for changing the Japanese education system.

At a more practical level, the Prime Minister is keen to strengthen economic and strategic relations with Australia and India. Even before he was elected leader, Abe had resolved to push through a Japan-Australia free trade negotiation, against strong institutional resistance, as a vehicle for closer engagement.

That negotiation is about to begin. In the meantime, Mitarai arrives in Australia on Saturday at the head of 25 Japanese business leaders for a program that includes two days of meetings in Canberra with John Howard, economic and trade ministers and senior policy bureaucrats.

The group includes Nippon Steel president Akio Mimura and Sumitomo Corp chairman Kenji Miyahara, and it is the first Keidanren mission to Australia since 1997. Keidanren officials are reluctant to discuss even the subject of the talks, which, for some obscure reason, they describe as sensitive.

The federation’s managing director, Masakazu Kubota, did at least confirm yesterday that FTAs (economic partnership agreements as the Japanese prefer to term them) would be the core agenda.

There is no stronger supporter in Japan than Keidanren for the Australians’ push for a comprehensive and expedited FTA covering agriculture, services and investment.

Keidanren sees the spread of bilateral, and particularly regional, free trade agreements as an important means of reinvigorating the domestic economy and reasserting Japan’s regional economic influence, which has been badly eroded by China’s rise.

The Australian negotiation is Japan’s first with a first-rank agricultural exporter. Keidanren hopes the agreement will override the domestic farm lobby’s opposition to opening Japan’s food markets.

That would also remove a major impediment to a Japan-US FTA, which is far more important to Mitarai’s members than any Australian deal.

Keidanren’s main objective in this area is an east Asian economic partnership covering the 10 ASEAN nations.

 source: The Australian