The head of Japan’s largest business organization on Thursday urged Banri Kaieda to show leadership in moving the government toward negotiations on a Pacific free-trade agreement as the two met for the first time since Kaieda became trade minister.
At the meeting with Hiromasa Yonekura, chairman of the Japan Business Federation (Nippon Keidanren), Kaieda stressed the significance of “opening up” Japan and noted his ministry is pushing hard to join talks on the Trans-Pacific Partnership Agreement.
In a sign that Prime Minister Naoto Kan is gearing up to seek free-trade agreements with other countries, Kaieda replaced Akihiro Ohata as minister of economy, trade and industry in the Jan. 14 Cabinet reshuffle, apparently because Kaieda is more positive about joining the TPP talks.
“To realize the opening-up of our country during the Heisei Era, as said by Prime Minister Kan, we want (the trade minister) to make all-out efforts to deal with such issues as the TPP participation, the promotion of high-level economic partnerships . . . and regulatory reforms,” Yonekura said at the meeting.
“The business community will also cooperate as much as we can so the minister’s policies produce major results.”
Keidanren officials also called for overhauling the tax and social security systems and said the 5 percent consumption tax should be raised “in stages” to at least around 10 percent while monitoring the condition of the economy, a trade ministry official said.
Kaieda agreed that if the government actually raises the sales tax, it should do so gradually to lessen the impact on the economy.
The TPP originated as a free-trade agreement among Brunei, Chile, New Zealand and Singapore. Negotiations are under way to expand the framework by including other Asia-Pacific countries, such as major agricultural exporters Australia and the United States.
The TPP envisions a “high-level” free-trade agreement, with members required in principle to reduce all tariffs to zero within 10 years.