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US demands complicate Japan’s plans for regional trade pact

The Asahi Shimbun 2010/10/28

US demands complicate Japan’s plans for regional trade pact

Concerns and demands from Japan’s closest trade partner, the United States, have complicated Tokyo’s increasingly contentious plan to enter negotiations for the creation of an Asia-Pacific free trade zone.

The situation has become so tangled that trade minister Akihiro Ohata, Japan’s main proponent to join the Trans-Pacific Partnership (TPP), has had to tone down his enthusiasm.

"My understanding is that we are not putting our top priority on pursuing a TPP," Ohata told a news conference Tuesday.

Members of Prime Minister Naoto Kan’s Cabinet and the ruling Democratic Party of Japan have raised concerns that entering the TPP could hurt Japanese farming households through an influx of cheaper agricultural produce from abroad.

The debate related to the TPP has also brought to the fore trade issues with the United States.

Washington, which plans to double U.S. exports to shore up its economy, is calling on Japan to remove its beef-import restrictions.

Japan introduced a blanket ban on U.S. beef imports after the discovery of bovine spongiform encephalopathy (BSE), or mad cow disease, in the United States in December 2003.

The ban was partially lifted to let in beef from calves 20 months old or younger and whose spinal cords and other high-risk parts had been removed. But the restrictions remain in place.

Officials with the U.S. Trade Representative’s Office have also voiced concerns about the Kan administration’s plans to expand the operations of the privatized group of postal companies while involving the government in their management.

The U.S. officials said if Japan Post Bank Co. and Japan Post Insurance Co. start providing housing loans and medical insurance for cancer patients while benefitting from government backing, they would deprive foreign financial companies of business opportunities. Such a situation would likely violate World Trade Organization stipulations, they said.

USTR officials have asked their trade ministry counterparts to resolve those issues before discussing the TPP.

On Wednesday, Tatsuo Hirano, a senior vice minister of the Cabinet Office tasked with evaluating the regional trade arrangement, acknowledged that Japan’s announcement of its intention to join the TPP "will not come easily."

Hirano pointed out that Japan has not even entered negotiations to gain approval from nine nations currently involved in the TPP discussions.

"There are many hurdles left to clear," he said.

Foreign Minister Seiji Maehara, another proponent of joining the TPP, expressed frustration over the current situation.

"The window of opportunity is closing on the TPP. If Japan decides to suspend discussions on the matter and (later) concludes that it wants to join, it might be too late for Japan to be allowed to enter negotiations," Maehara told a news conference Tuesday.

Maehara, referring to fears of the TPP from within the agriculture industry, noted: "Japan’s farming policy has hit a dead end. The farming policy needs a fundamental turnaround."

Full-fledged negotiations to design the structure of the TPP started this year. Representatives from the United States, Australia, Singapore and six other countries plan to discuss the issue Nov. 11, ahead of the Asia-Pacific Economic Cooperation summit in Yokohama the same month.

On Nov. 9, a working-level meeting will convene to hear from representatives of Canada, China and other countries that have yet to announce their intention to join the TPP arrangement.

Maehara has already said he intends to have a Japanese representative at that meeting.

"The APEC (meeting) will likely be the decisive point, and we need to take a step forward," said Koichiro Genba, state minister in charge of national policy.

Ohata said committing to a multilateral arrangement that removes all tariffs would be an "enormous task" for Japan.

He said it would require "those involved to first discuss matters bilaterally, and only after resolving all issues would they be able to join the TPP."

Ohata and other government officials said problems aside from domestic agricultural issues could require countermeasures.

 source: Asahi Shimbun