Tokyo warned of risks from Pacific trade pact
Financial Times | 2 November 2010
Tokyo warned of risks from Pacific trade pact
By Mure Dickie in Tokyo
Japan’s farming sector will suffer “huge damage” if the government bows to pressure to join a trans-Pacific trade pact, a senior agriculture ministry official has warned.
In an interview with the Financial Times, Takashi Shinohara, senior vice minister for agriculture, strongly denied Japanese media reports that Tokyo had already decided to launch talks with the US and other economies on entry to the Trans-Pacific Partnership trade agreement.
Japanese business groups on Monday said Japan risked being left out of “global growth and prosperity” if the government fails to announce its intention to join accession talks to the tariff-cutting TPP this month.
However, Mr Shinohara, who has in recent days mounted a determined rearguard action against trade and foreign ministry counterparts over the issue, insisted that a final decision on TPP entry should be postponed.
“It’s not clever for Japan to announce it will join the TPP at this moment,” the vice minister said. “We need a more cautious procedure to decide something so important.”
Mr Shinohara, an expert on farming issues and former agriculture bureaucrat, underscored growing tensions within Japan’s ruling Democratic party over the trade pact by describing the push for early TPP entry as an example of “unorthodox” and “primitive” governance.
Naoto Kan, the prime minister, signalled in a major policy speech last month that he was interested in announcing during a regional summit this month in Yokohama that Japan will join the US, Vietnam and other nations in negotiations to enter the TPP, which already includes Chile and New Zealand among its four members.
But Mr Shinohara warned that a TPP-required commitment to cut agricultural tariffs to zero over 10 years would overwhelm a system of subsidy payments to farmers introduced by Japan’s new DPJ government this year.
“Mr Kan . . . has supported this policy, so if he pushes TPP so much, he will face a kind of contradiction,” Mr Shinohara said.
The prime minister should find some kind of “in-between” solution, he said, suggesting this could take the form of a “vague” statement that Japan aimed to join the TPP at some later date.
Overly hasty action would destroy Japan’s production of rice, wheat and other staples, he said, adding that even more measured approach would require a major expansion of the subsidies for farmers.
“How long we should wait depends on what kinds of counter measures we can take. If the ministry of finance gives us enough budget, the term can be reduced to five years,” he said.
The vice minister dismissed a report in the influential Nikkei Shimbun business daily that the government had decided to join TPP, saying that his own “strong opposition” had blocked the creation of a cross-ministry consensus on the issue.
The DPJ has made forging free trade agreements a central goal of its foreign policy but many in the party are deeply nervous of alienating rural voters.
