Business / Economy

TPP deal irks farmers, automakers

Kyodo

Farmers and carmakers alike are airing concerns about the Japan-U.S. accord reached last week that endorsed Tokyo’s participation in the Trans-Pacific Partnership talks, even as major domestic business lobbies hailed the move.

The agricultural sector fears that Japan’s entry to the trade liberalization discussions will result in an influx of bargain-basement food imports, while automakers are lamenting the bilateral agreement reached Friday for what they perceive as unequal treatment compared to their South Korean rivals.

But business lobby groups welcomed the deal, saying it is essential that Japan join the ongoing discussions to determine a framework for the TPP as soon as possible in order to secure its national interests. The final accord is slated to be concluded by year’s end.

Kotaro Endo, a 60-year-old rice farmer in Yamagata Prefecture, expressed distrust of the government, saying he finds it “incomprehensible” that Prime Minister Shinzo Abe decided to take part in the multilateral talks before securing a promise from the U.S. to exclude sensitive items from tariff elimination. In principle, the TPP seeks to abolish all tariffs among its member countries.

Tatsuo Fujiwara, 61, who breeds around 1,000 beef cattle in Miyazaki Prefecture, warned that if the current tariff on beef imports is removed during the TPP negotiations, the domestic industry “won’t be able to compete at all” with cheaper imports because of its higher costs.

Another cattle farmer, 60-year-old Yoshiaki Somekawa, also from Miyazaki, said he would have to try to stay in business by altering the composition of his feedstuff to increase the amount of milk his cows produce.

The TPP, which aims to create a massive free-trade area among Pacific Rim economies, is also prompting fears that it may undermine food safety, as labeling requirements for food additives and genetically modified items, as well as standards on pesticide residue, could be relaxed.

Yasuaki Yamaura, cohead of the Consumers Union of Japan, voiced alarm over what he sees as the overly rapid preparatory process the government has engaged in to obtain approval to take part in the TPP talks, saying consumers and producers have not been sufficiently informed.

“People in Japan may be forced to merely accept the outcome of the discussions,” he cautioned.

As for the nation’s major automakers, they expressed disappointment that Tokyo and Washington decided to delay for as long as possible the elimination of U.S. tariffs on imported Japanese vehicles, by introducing a longer moratorium than that agreed between the United States and South Korea for their bilateral free-trade agreement.

The U.S. remains Japan’s largest auto export market, and manufacturers including Toyota Motor Corp. Nissan Motor Co. and Honda Motor Co. will be find themselves at a big disadvantage after American automobile tariffs are lifted in 2016 on passenger vehicles from South Korea.

Following Washington’s lead, Australia has also called for maintaining its auto tariffs during the process of devising the TPP framework, sources close to the negotiations said.

Unlike farmers and automakers, however, Keidanren Chairman Hiromasa Yonekura, whose group represents the nation’s biggest manufacturers, welcomed the bilateral accord and in a statement urged Abe’s government to “remain on the offensive” in the upcoming discussions so that Japan can influence the TPP rule-making process.

Other manufacturers also hailed Japan’s imminent participation in the talks, saying the regional FTA would expand their sales. Takayuki Shinagawa, 71, the manager of a rubber product maker in Osaka Prefecture, said the envisioned Pacific Rim trade zone would boost his company’s exports significantly and also underlined the need to collect more information on overseas customers and their requirements.

On the domestic insurance market, financial services minister Taro Aso, who also serves as finance minister and deputy prime minister, announced that the government does not intend to authorize the sale of any new medical insurance products by Japan Post Insurance Co. for “several years.”

Washington has been concerned about the expanded operations of the company, part of the state-owned Japan Post group, and had called for fair competition in Japan’s insurance sector to allow American firms a better chance to compete. Officials at Japan Post Insurance said that even though the firm can’t launch cancer insurance products in the near term, it will continue to make efforts to increase its corporate value amid the current constraints via alternative avenues.