TPP bandwagons play tunes not all find pleasing to the ear

by Jun Hongo

First Of Two Parts

The question of whether Japan should join the Trans-Pacific Partnership free-trade talks has taken center stage in the Diet as the chasm grows between TPP advocates, mainly on the side of businesses, and opponents, representing long-protected farming and fishing constituencies.

Agricultural cooperatives have turned in a petition to the government with 11.6 million signatures warning that the TPP would doom domestic farming.

Businesses meanwhile have high hopes, calling the free-trade framework a long-awaited energy shot that will recharge the sagging economy.

Both sides are holding their ground.

“I have requested that the ruling party reach a conclusion” on whether to join the talks on building the TPP framework, Chief Cabinet Secretary Osamu Fujimura told reporters Oct. 3.

Weeks later he acknowledged there hadn’t been much progress.

“We’ve been listening to many opinions, but it’s distressing,” Fujimura told Akira Banzai, chairman of the Central Union of Agricultural Cooperatives on Oct. 24.

While some farmers are staging anti-TPP rallies in front of government buildings, manufacturers and other businesses are lining up behind the trade pact. They fret over missing the trade boat that rival exporting economies are looking to board.

Top business lobby Keidanren in April released an analysis saying trade liberalization is a “minimum requirement for Japanese companies when conducting business through global supply chains.”

Keidanren said the TPP could in the future become a framework that embodies the entire Asia-Pacific region, which currently accounts for 25 percent of Japan’s total trade and 41 percent of its direct investment balance.

Failure to join the pact would cause critical damage because Japan is both a “nation built on trade and investment and one built on technology,” the organization warned.

Keidanren officials have gone so far as to tell the ruling Democratic Party of Japan that snubbing the TPP discussions “is not an option.”

Prime Minister Yoshihiko Noda’s administration appears to be siding with Keidanren, as the government is widely expected to announce this month that Japan will participate in the TPP negotiations.

The government has said that despite Japan’s aging society and chronic deflation, joining the TPP would add about ¥2.7 trillion to the nation’s GDP.

The Ministry of Economy, Trade and Industry also pointed out last year that if Japan fails to join the TPP, it would lose international market share, the economy would contract 1.53 percent and 812,000 people would lose their jobs as a direct result.

The impact of joining the trade pact would reach beyond domestic agriculture and exporting industries. It would provoke deregulation in fields including market access, labor and medicine.

To appease opponents of the TPP, the Cabinet Office last month issued questions and answers, in a file format, in an effort to address any “misunderstandings” certain industries have over the free-trade accord.

For example, on concerns that cheap labor from overseas would result in a loss of jobs, the government said this eventuality is simply “unthinkable.”

An FTA usually works under the assumption that it will permit technical experts and specialists to work freely. But unskilled labor is an exception, the government explained.

Japan would also retain the right to screen specialists, such as lawyers, who seek to work in the country, it said.

On fears that unsafe food and agricultural produce would be imported, the government said an agreement under the World Trade Organization grants the country the right to only purchase products of a certain standard.

“It is hard to imagine that some country will forcefully request another to change its rules” regarding food safety requirements, even under the TPP, the government file pointed out.

The explanations have so far failed to satisfy the TPP opponents, who are trying to put the brakes on the government’s momentum toward the accord.

They argue that reducing the nation’s already-low food self-sufficiency rate would leave Japan hostage to potential diplomatic conflicts.

The agriculture ministry last year calculated that Japan’s food self-sufficiency rate — at 40 percent on a calorie basis — would fall to 13 percent under the TPP.

Whereas Keidanren claims removing tariffs would help stabilize the employment situation, the farm ministry forecasts that joining the trade framework would cost 3.4 million jobs.

“Japan’s territory is limited and the lack of farmland is a handicap in growing cheap produce compared with giant exporters such as the United States and Australia,” the Japan Agricultural Cooperative says on its website.

Lifting tariffs would mean Japanese farmers would be able to sell their produce overseas, but achieving a radical boost in output would not be easy, nor would it occur in short order.

Farmers are still reeling from the March 11 disaster, particularly in the Tohoku region, where there was widespread crop damage and fears persist that produce has been contaminated with radiation.

Asking the industry to take one for the team at this point in time is simply unthinkable, farmers’ associations say.

The Japan Medical Association also worries about the impact of the TPP.

Last year the association’s vice chairman, Toshio Nakagawa, expressed concern that opening the medical industry would result in a fundamental takeover of the market.

“That will ultimately tear down the universal public health care system,” he warned.

The government has claimed that it can limit the involvement of companies whose actions are purely profit-motivated, and that the current health care framework would not be compromised.

But Nakagawa pointed out that liberalizing the medical industry would create a society where only the wealthy will be able to receive the best care, while the less well-off will have to settle for less.

“The Japan Medical Association will do all it can to save the universal health care system,” Nakagawa said in a news conference.

The government is now in a dilemma: pass up the opportunity to join the TPP talks and lose the support of Keidanren, or join the negotiations and face the wrath of farmers.

Even worse, the chasm is beginning to shake the foundation of the government as the DPJ finds itself beginning to fall apart.

“If (the government) really intends to steamroll its way into the TPP negotiations, then the party will break in two,” former farm minister Masahiko Yamada said last month.