Truly liberalize for FTAs: METI

Kyodo

The government must do more to reduce items still subject to tariffs under free-trade agreements, because FTAs will be vital to achieving sustainable economic expansion in graying Japan, the industry ministry said in a trade white paper released Friday.

Tokyo has so far forged FTAs with 12 countries and one region, with its liberalization rate standing at around 86 to 87 percent on the basis of items not subject to tariffs, compared with the nearly 100 percent liberalization achieved in recent FTAs among other developed countries, the report said.

Japan’s trade with countries and regions with which it has formed FTAs accounts for 18.6 percent of its total trade by value, far below South Korea’s 33.9 percent. It is also lower than the 39.0 of the United States percent and the European Union’s 28.6 percent, the rates of trade with economies with which they have formed or signed FTAs.

“If a larger number of items are exempt from trade liberalization, it will be more difficult to reach an agreement with negotiating countries on the liberalization on items in which our country is interested . . . and talks could face stalemate,” said the paper released by the Ministry of Economy, Trade and Industry.

“To alleviate Japan’s delay in its efforts to form economic partnership agreements and free-trade agreements, it would be essential to sharply reduce the number of items exempt from the liberalization,” the paper said.

The report singled out Germany as a model for Japan to emulate in its quest to boost trade.

Germany enjoys solid economic expansion with its successful branding strategy at a time neighboring countries face economic stagnation amid the European sovereign debt crisis.

German companies have succeeded in making products with high brand value and that sell well in emerging countries while largely avoiding harsh price competition, the paper said.