When he roared into office in April, the maverick Junichiro Koizumi vowed to die hard in a fight against old guard forces within his own Liberal Democratic Party. His proclaimed mission was clear: to turn around the decade-long economic slump in the medium and long terms through "bold structural reforms without leaving any sanctuary."
To be sure, Koizumi has translated his words into action during his seven months in office, daring to put on the table as targets of his reform drive one thing after another, many long considered politically untouchable.
The prime minister has advocated privatizing the public postal savings system -- by far the world's largest financial institution in terms of deposits -- and abolishing or selling to private hands state corporations, many of which have been long criticized as inefficient and no longer useful guzzlers of government subsidies.
But there is at least one important field that Koizumi has not spread his reform net over -- unwittingly or deliberately -- despite his pledge to leave no sector immune from his reform drive: Agriculture.
Strangely, the Council on Economic and Fiscal Policy has not even discussed reform of the farm industry, one of the weakest and most heavily protected sectors in the economy. The council is the highest policymaking body on economic affairs. It is chaired by Koizumi himself and includes several outspoken members from the private sector.
Amid the prolonged economic slump at home and intensifying competition from foreign countries, farm-trade protectionism is rising in Japan, as exemplified by the current trade spat with China over cheap agricultural imports.
But nevertheless, reform of the industry is becoming imperative.
If Japan is to prevent itself from being left behind amid an accelerating global trend of forming bilateral or regional free-trade agreements, which already number well over 100, it must take on this sacred cow.
Roughly two-thirds of the existing FTAs have been concluded in the past decade, a period of rapid globalization and increasingly cutthroat competition in the international marketplace.
What is expected of an FTA is not only a smoother flow of trade and investment among partners but also strengthened international competitiveness of their economies as structural reforms are carried out under peer pressure.
Japan is still the world's only major industrialized country that has not concluded an FTA, even though it is now close to signing its first-ever FTA, with Singapore. The other major economies that have not yet joined the growing ranks of FTA signatories are China, South Korea and Taiwan.
Why is Japan so cautious, even timid, about concluding an FTA?
The answer is now obvious. Even government officials do not make a secret of it. The politically powerful farm lobby is adamantly against opening the Japanese agricultural market, especially the rice sector, to foreign competition.
Under a decades-old electoral system, farm households, which now number about 3 million in a country with a total population of 126 million, enjoy disproportionately strong voting power.
To be sure, the Japan-Singapore FTA, which is expected to take effect next spring, following its signing and ratification around New Year's, is significant in that it departs from Japan's traditional policy of pursuing freer global trade multilaterally through the General Agreement on Tariffs and Trade and its successor, the World Trade Organization.
But the Japan-Singapore FTA is no more than a small first step in a new direction for Japan's trade policy. The question is whether -- and when -- Japan can take the next step.
Japan selected Singapore, a city state that produces almost no farm products, as a guinea pig to test the FTA waters.
As it turns out, the water might be too hot. Despite Singapore's negligible agricultural exports, farm trade had to be exempted from tariff liberalization due to vehement objections from Japan's farm lobby and the LDP politicians backed by it.
"There was strong pressure from the LDP and the farm lobby on the government not to agree to make any further liberalization of the agricultural market in negotiating an FTA with Singapore," a Japanese government official who was involved in the negotiations said, requesting anonymity. "They were afraid that once Japan made a market-liberalization commitment to Singapore, it would be forced to do the same thing with other countries."
While Japan maintains a cautious approach toward concluding FTAs, more and more foreign countries are beginning to court the world's second largest economy. Thai Prime Minister Thaksin Shinawatra earlier this week was the latest to appeal for an FTA with Japan.
At least nine other economies have also made either formal or informal FTA proposals to Japan: Mexico, Canada, Chile, Brazil, South Korea, Taiwan, Australia, New Zealand and Switzerland.
Japan has not agreed to open negotiations with any of its suitors.
Even South Korea and China are departing from their traditional go-alone trade policies.
According to Japan's Ministry of Economy, Trade and Industry, South Korea is already negotiating an FTA with Chile and is discussing a possible FTA with a few other countries, including Australia, New Zealand and Singapore.
At a summit meeting in Brunei in early November, China also agreed with the 10-member Association of Southeast Asian Nations to start talks on the establishment of an FTA. ASEAN groups Indonesia, Thailand, Singapore, Malaysia, the Philippines, Brunei, Vietnam, Laos, Cambodia and Myanmar.
The China-ASEAN agreement fueled concerns among Japan's multinational companies and exporters that their country might be left behind.
Although Prime Minister Koizumi categorically brushed aside such concerns as "masochistic" in reply to reporters' question in Brunei, he seems to be too optimistic, given the fact that Japan has so far failed to set a clear FTA strategy.
A senior government official who is closely involved in Japan's trade policy appeared to be losing patience with the situation.
"Before discussing an FTA strategy," he said, "Japan needs to discuss publicly a clear vision for the future of the agricultural industry, including the merits and demerits of further liberalization.
"But unfortunately, any discussions about farm issues are being made behind closed doors between LDP politicians and government bureaucrats. And the only purpose these discussions serve is pressuring government bureaucrats not to move even an inch toward further liberalization of the agricultural market.
"It would be desirable that debate is made in an open and public manner about what to do with Japan's agricultural industry for the interests of Japan and its people."
In a remark that appeared to betray his reformist credentials, Koizumi once grumbled about the political difficulty of injecting more competitive principles into the farm industry.
Despite a record jobless rate of 5.3 percent, registered in September, Koizumi has continued to preach the importance of reforms, saying "no pain, no gain."
But how can he persuade a huge majority of the Japanese citizens affected by his reform programs to remain patient without asking farmers -- a tiny percentage of the overall population -- to shoulder their own share of pain?
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