Prime Minister Shinzo Abe is facing severe resistance from his ruling Liberal Democratic Party on plans to potentially scrap import tariffs on some of Japan’s “sacred five” agricultural products.
Abe aims to harness Japan’s competitiveness to end its economic malaise through the Trans-Pacific Partnership agreement.
The new development came to light Sunday when Koya Nishikawa, chairman of the LDP’s TPP committee, said in Indonesia that tariffs on the five would be reviewed. The TPP talks were held on the resort island of Bali.
“The government is likely to propose broader liberalization at the TPP negotiations,” Nishikawa said Wednesday at Haneda airport after returning from Nusa Dua on Bali.
The 12 TPP members agreed to stick to their year-end deadline for concluding the free trade pact when the latest round of talks ended Tuesday.
The LDP-led government is making sounds about removing tariffs long in place for five product segments — rice, wheat, beef and pork, dairy products and sugar — by reviewing 586 items classified under the five.
Nishikawa’s comments contradict the “trust me” promise Abe made to farmers before announcing in March that Japan would join the TPP negotiations.
Abe and his party have since been busy reassuring farmers by telling them tariffs won’t be unconditionally removed on any of the five.
Nishikawa’s remarks have already spurred staunch opposition within the party, which is rife with vested interests.
The LDP backed its leader on Japan entering the TPP talks on condition that tariffs on the five products be retained.
“The LDP won the election by pledging we will keep the tariffs on the five products,” former Chief Cabinet Secretary Nobutaka Machimura said during a TV interview Tuesday.
“There will be lots of discussions at the Diet session and within the party, which might make it difficult for the government to make any decision by year’s end.”
Abe’s backpedaling underscores that he needs the free trade pact to fuel his radical economic plan to resuscitate Japan’s deflation-mired economy.
While he also needs to protect the fragile farm sector, Japan must also sell goods overseas to power its export-oriented economy.
It also highlights the fact that it will be hard to meet the year-end deadline for establishing the TPP pact unless Japan makes concessions to TPP participants burdened by other issues, including intellectual property rights and how to treat state-run companies.
“If Japan will aim for a year-end conclusion, Japan cannot say that we will not make any concessions,” said a high-ranking government official.
“I think it is about time.”
As the latecomer to the pact, Japan has been having a tough time negotiating the boundaries of the TPP’s trade liberalization goals because the participating nations ultimately want to remove tariffs across the board within 10 years.
Japan was initially set to propose tariff elimination for as much as 85 percent of all imports, but that proposal has been met with staunch opposition from countries that include New Zealand or Singapore, which are calling for total elimination.
Even if Japan scraps all tariffs except for the five products, the trade liberalization ratio will remain 93.5 percent, which is below the global standard.
Some nations are liberalizing more than 95 percent of their trade within other free trade arrangements, such as economic partnership agreements.
Japan retains imports tariffs on the sacred five in EPA pacts it has established with 13 countries and regions.
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