Will too many cooks spoil the broth?
According to government sources, Japan and South Korea have selected members of a joint study panel that will look into the possibility of tying the two countries via a bilateral free-trade agreement, or FTA.
The panel is scheduled to be launched in the middle of next month.
The sources said that the panel of Japanese and South Korean government officials, business people and scholars will compile a report on its findings one or two years later.
Although they refused to give specific names of panel members, they did elude to an unusual arrangement: The Japanese side will be jointly chaired by four deputy bureau chief-level officials — one each from the Ministry of Economy, Trade and Industry, the Foreign Ministry, the Finance Ministry and the Agriculture, Forestry and Fisheries Ministry.
The South Korean team, on the other hand, will be chaired by a single person — a senior official of its foreign and trade ministry, according to the sources.
Usually, any Japanese government delegations to comprehensive economic talks with foreign countries are led by a maximum of three officials, one each from METI, the Foreign Ministry and the Finance Ministry.
The Japanese and South Korean study panel’s inauguration was agreed upon at a Seoul meeting March 22 between Prime Minister Junichiro Koizumi and President Kim Dae Jung.
It’s one of Japan’s incremental steps toward the global FTA bandwagon.
Japan signed its first FTA, with Singapore, in January. A second could come with Mexico. A joint panel of Japanese and Mexican government and private-sector experts have been studying the possibility of concluding an FTA and is expected to recommend formal negotiations in a report due next month.
As for South Korea, a Japan-South Korea pact would create a huge free-trade zone of about 170 million consumers and $5 trillion in gross domestic product. It will be studied, in part to counterbalance China’s growing economic influence in Asia.
As is the case of FTAs with any trading partners, however, agriculture will be the biggest obstacle for Japan. Under rules set by the World Trade Organization, the Geneva-based watchdog on international commerce, any FTA must “substantially cover all trade” between FTA partners.
And that goes a long way in explaining why Japan’s study team for a South Korean pact is so top-heavy.
The agricultural ministry, backed by the politically powerful farm lobby and politicians elected from rural constituencies, is dead-set against opening Japan’s agricultural markets, especially that for rice, to foreign competition.
Among other government ministries, METI and the Foreign Ministry are the most enthusiastic about promoting FTAs. They see the pacts as a means of strengthening Japan’s industrial competitiveness and helping its economy survive in the increasingly competitive global marketplace.
“The best thing about the Japanese team is that a senior official from the Ministry of Agriculture, Forestry and Fisheries will serve as its joint chairman,” one government source said.
The source, a staunch proponent of FTAs, said, “The farm ministry is resisting FTAs for fear of being forced to open Japan’s agricultural markets, especially the politically sensitive rice market.
“But if the farm ministry is put in a responsible position of jointly chairing the Japanese team in the joint study panel with South Korea, it will have to behave in a responsible manner, without just always saying ‘no’ to further liberalization of the agricultural sector.”
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