If Japan joins the U.S.-backed Trans-Pacific Partnership free-trade agreement and tariffs on highly protected farm products are lifted, it would greatly benefit consumers by boosting imports and lowering product prices, a point often overlooked amid recent intensifying debates, experts said in a recent panel discussion.
They added, however, the question is whether the government can find the financial resources to compensate farmers who are likely to be most affected by the agreement.
“Many people say it is good that the current surplus increases and bad that imports increase. But that’s not true,” economist Nobuo Ikeda said during a Friday discussion in Tokyo, where experts from various fields both for and against the TPP gathered to discuss the controversial trade pact.
If the extremely high tariffs on farm products like rice and wheat are lifted, consumers can purchase cheaper products, so “it will clearly benefit consumers. It is worth joining the TPP from just this point of view,” said Ikeda.
He said that the U.S. tariffs are already quite low, and that Japan’s exports to the United States would not be pushed very hard at the TPP talks.
Shinji Hattori, a researcher at the Nippon Agricultural Research Institute, who opposes the TPP, admitted consumers would benefit, but the problem is that the government has not estimated the extent of damage farmers would suffer and how much compensation would be needed.
He said his own estimate is about ¥2.2 trillion.
Considering that the country’s fiscal deficits are mounting due to social security spending amid the graying population and disaster reconstruction costs caused by the March 11 earthquake and tsunami, “it’s impossible to find financial resources, so Japan should not join the TPP.”
The debate also touched on different aspects including whether it would be beneficial to join the TPP talks with the current member countries.
The trade targets the Pacific Rim, but it does not include China, South Korea or Taiwan, whose economies are rapidly growing.
“If Japan wants to grow its economy by trade, it won’t be the U.S. More important partners are East Asian countries and BRICS,” said Ukeru Magosaki, a former Foreign Ministry official, who is against the TPP.
Satoru Matsubara, an economics professor at Toyo University, admitted the TPP is controversial when looking at the economic power balance of the nine participants, as the U.S. is far more powerful than others.
However, he stressed that free trade is important. Whatever the background is, “it is really crucial for Japan to proceed in negotiations for economic partnerships with the U.S. and European Union,” he said.
Magosaki said the most important point of the TPP is not the elimination of tariffs, but possibly opening up other fields like medical care and finance that could drastically change the structure of Japanese society.
And there are no countries in the TPP that can have tough negotiations with the U.S., stressing the concern that the U.S. would push its requests in those fields.
Kotaro Tamura, a researcher at the U.S.-based think tank Rand Corp., brought some perspectives from the U.S., noting the TPP is a really minor issue there and many people do not even know what it is, as the U.S. government has other issues, such as employment, to deal with.
“It was hard to get information about the TPP, since it has not been discussed,” said Tamura, a former Diet member.
He said the partnership with Japan has become more important to the U.S. to counterbalance China, so Japan should join the talks and push its interests.