The Asahi Shimbun | Oct. 5 2010

Editorial: Pacific free trade pact

In his Diet policy speech on Friday, Prime Minister Naoto Kan said he will consider Japan’s participation in the negotiations for a regional trade pact known as the Trans-Pacific Partnership (TPP) agreement.

The statement is consistent with Kan’s pledge to pursue a strategy designed to revitalize Japan’s economic growth by concluding free trade agreements (FTA) with many countries. We hope the Kan Cabinet will forge ahead with this strategy with an energy befitting a Cabinet claiming to be committed to delivering on its promises.

The Asia-Pacific Economic Cooperation (APEC) summit to be held in Yokohama in November will offer a great opportunity for Japan to make diplomatic efforts with this aim in mind. The government should make sure that Kan and other leaders attending the summit agree to start negotiations or step up efforts toward a free trade deal.

The TPP is an initiative launched by eight Pacific Rim countries including the United States, Australia, New Zealand and Singapore to create a regional free trade zone. The eight countries, which are sometimes referred to as an "elite club" of free trade partners, are in negotiations to shape a thorough regional trade pact that allows few exempted items.

Japan has been sounded out about taking part in the talks. But the Democratic Party of Japan-led administration has been reluctant. This cautious stance toward the TPP apparently reflects concern about possible political repercussions. The ruling party fears that joining the TPP, which would lead to liberalization of the Japanese market for agricultural products, could cost it the massive farm vote.

For the same reason, the government has been hesitating to enter FTA talks with the United States, a major exporter of agricultural products. Japan’s FTA negotiations with Australia have been hampered and progress toward the proposed East Asian Community has been blocked by the same factor. It has also gummed up efforts to launch negotiations for a trilateral FTA among Japan, China and South Korea, which should be the core of the regional bloc.

Japan must tackle the issue of how to capitalize on demand in growing overseas markets in Asia and other parts of the world in order to revive its stalled growth after two decades lost to economic stagnation. The government should assume responsibility to improve the environment for Japanese business by promoting an effective FTA strategy.

South Korea, which has sharply increased its presence in world markets for automobiles and information technology products, is expected to put free trade pacts with the United States and the European Union into effect as early as next year. That will put Japanese companies at a serious disadvantage in competition with their South Korean rivals in exports to the U.S. and EU markets, because Japan doesn’t have an FTA with these regions. If this situation prompts Japanese exporters to accelerate moves to shift production overseas, there will be even more job losses at home.

Canada and South Korea are also expected to join the TPP. Japan must avoid being left out of the rush to take part in the regional trade agreement. Japan’s participation in the TPP could provide impetus to the efforts for an FTA between Japan and South Korea and among Japan, China and South Korea.

Both the ruling and opposition parties are to blame for Japan’s delay in pursuing an FTA strategy, because they put priority on electoral strength and have postponed the important trade talks. Both sides should think carefully about this mistake and embark on nonpartisan efforts to put Japan into the lead in the FTA race.

Taking part in the TPP requires Japan to make the gutsy political decision to open its markets for rice and other farm imports. The government needs to take measures to prevent cheap agricultural imports from delivering a serious blow to domestic farmers.

The government should make effective use of the program to compensate for income losses of farmers to help them boost the competitiveness of their products against imports. Participation in the TPP should be taken as a cue to make fresh efforts to re-energize the nation’s agriculture as an industry.