Excerpts from keynote speeches on Japan’s "economic partnerships": June 2004

EXCERPTS FROM PARTICIPANTS’ KEYNOTE SPEECHES

9 June 2004

Yomiuri Shimbun, Tokyo

Takashi Shiraishi

Professor, Kyoto University’s Center for Southeast Asian Studies (Coordinator)

Prime Minister Junichiro Koizumi proposed concluding economic partnerships with East Asian countries as part of the nation’s future policy during his tour of Southeast Asian countries in January 2002.

Since the mid-1980s, the region from Japan and South Korea through to China and Taiwan and on to Southeast Asian countries has economically developed, and ties among these countries have grown closer.

Then, after the 1997-98 economic crisis, awareness over currency stability, free trade and economic integration grew.

Under such circumstances, the idea of ASEAN plus Three (the Association of Southeast Asian Nations plus Japan, China and South Korea) or the establishment of an East Asia community surfaced.

What is important about an economic partnership is that it is more than an FTA. In addition to developing standardized systems on trade and investment, the movement of people and cultural exchanges should be promoted.

The Japanese economy has come to a point in which its relations with East Asian economy cannot be terminated. This is the very reason an economic partnership is important. Stability and prosperity of East Asia will benefit Japan, and an economic partnership will promote stability and prosperity of the region.

Another important point is that Japan has to change its social mechanism in the aging society with a declining birthrate.

An economic partnership can be used as a springboard for reforms.

There is an argument that economic partnership cannot be realized easily because of resistance to liberalization in agriculture and labor market.

However, economic partnerships are an issue that would affect the nation’s long-term strategic perspective.Motoshige Ito

Professor, Faculty of Economics at Tokyo University Graduate Course

I would like to speak first about why economic partnerships are important. Until the early 1990s when the United States and Canada concluded a free trade agreement, countries had to only deal with the international framework called the World Trade Organization.

However, as the world economy became more complicated and it became necessary to address such issues as the movement of people and economic cooperation, the WTO became unable to respond to the reality of the world economy. Thus, countries with close economic relations started to discuss mutual matters prior to a framework within the WTO.

As countries started to conclude economic partnership agreements around the world, countries that only participate in WTO talks were gradually discriminated against.

Furthermore, in the current globalized setting, cross-border economic partnerships naturally progress without agreements. If left unattended, disordered partnership will progress, so it is important to have orderly partnerships.

Then, what kinds of economic partnerships should we create?

They have to address not only tariffs and trade, but also the movements of people, economic cooperation, investment and cultural exchanges, so that there will be suitable mechanisms that can deal with situations in the 21st century.

It is important to think how we can create relations in Asia in a new age.

It is also important to think of how efforts with regard to economic partnership will be related to such domestic issues as the aging society and food supply.

Japan has to create a better system to solve issues concerning the aging society and food. However, it is impossible to do so in a closed society. It is important to think of what sort of country Japan should become through the process of economic partnerships.Uichiro Niwa

President, Itochu Corp.

Japan needs to view the East Asian region, which comprises the 10 Association of Southeast Nations members plus Japan, China and South Korea, as one market because Japan cannot expect its own domestic demand to increase much in an aging society with a declining birthrate. Japan, China and South Korea account for 23.6 percent of the world’s population and 8.6 percent of that of the ASEAN region.

Peace is an inevitable precondition for securing food and natural resources. But peace cannot be maintained only through political national security, and there must be free trade to guarantee peace. To this end, economic partnerships are important factors for national security in the East Asian region.

A milestone for the vision of East Asian free trade was former U.S. President Bill Clinton’s declaration along with other APEC (Asia-Pacific Economic Cooperation forum) leaders seeking an expanded free-trade bloc.

This idea was hampered by the 1997 financial crisis in Asia. But after the crisis, moves seeking to create a regional free-trade bloc have expanded, and last year Japan proposed the creation of an East Asia economic community.

I have the impression that the United States has recently been promoting the justice of power. Terrorism and conflicts are triggered by factors such as poverty and economic disparity. Instead of relying on its military power, the United States should opt for dialogues, the way the European Union does, to promote the free movement of people, goods and money over borders.

If the East Asian community can create a free-trade bloc similar to the EU, it will help national security in the region, contribute to the free movement of labor and bolster Japan’s food security.

In addition to working toward such an East Asian community, Japan should work to act as a bridge between the community and the NAFTA (North American Free Trade Agreement) area and the EU.Pisan Manawapat

Deputy permanent secretary, Thai Foreign Ministry

The 1997 financial crisis in Asia was a wake-up call for countries in East Asia. The leaders of ASEAN, Japan, China and South Korea took landmark decisions to institutionalize a summit meeting among ASEAN, Japan China and South Korea. Since then, the 13 leaders have been meeting to move East Asian regional cooperation onto a higher plane.

But global trends did not wait for these 13 countries to translate political pledges into tangible results. The EU has expanded and more than 250 FTAs have been concluded.

We cannot fight against the trend of liberalization. It has been shown that more and more unrestricted movement of goods, services and labor brings more benefits. It is important for Japan to seize this opportunity.

An FTA is not just about certain agricultural products or the movement of skilled workers. It is much more than that. I would like the Japanese public to understand this, to participate in the process, and not to allow the process to be in the sole hands of bureaucrats.

There is another big reason for such an irreversible trend in this deepening economic cooperation. That is the reality that China is raising to assume its economic might—not only in this part of the world, but in the whole world.

Japan can position itself strategically in partnership with Thailand to increase its positive contributions to Southeast Asia.

It is important to look at an economic partnership agreement as a catalyst for industries to accelerate reform to further enhance the deregulation process.

I hope very much Japan will conclude a meaningful EPA with Thailand—the most natural partner—with more more than 600 years of friendship without conflict.

(Pisan serves as Thailand’s chief negotiator for the Japan-Thailand Economic Partnership Agreement.)Toshio Yamada

Senior executive director, Central Union of Agricultural Cooperatives

I want to talk about an economic partnership from an agricultural viewpoint. Our country is a big dependent on food supplies from overseas, and some say that we can’t import any more agricultural items from overseas than we do now.

Despite such an opinion, in FTA negotiations with Mexico, Japan made concessions to expand agricultural product imports such as pork in return for Mexico’s lifting tariffs on industrial products.

It is expected similar arrangements will be made in negotiations of economic partnerships with East Asian countries.

However, we (JA group) are not simply opposing economic partnerships. We believe we need to prosper together with other Asian countries which have close ties with Japan historically, culturally and economically.

So far, we have carried out a number of projects (to cooperate with Asian countries). For example, we have been holding extensive training programs so that agricultural leaders of Asian countries can learn Japanese agriculture. More than 4,500 people have concluded such programs and now are actively playing roles in agricultural sectors of their countries.

I would like to mention some conditions that Japanese farmers insist on to prevent them from becoming victims of economic partnerships. One is that the nation’s agricultural production is functioning for preservation of environment and lands. We want exemptions from tariff abolition for key agricultural items in economic partnerships.

Secondly, if tariffs should be lowered, we want mechanisms to protect domestic farming. Third, development of ports and roads must be incorporated into domestic agricultural policy.

Fourthly, I want to emphasize broader cooperation, including personnel exchange and education, should be sought in economic partnership to contribute to development of whole Asia.

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