Rough seas ahead for Japan

Prime Minister Shinzo Abe announced Friday that Japan will take part in talks on the Trans-Pacific Partnership free trade scheme, noting that “the TPP is turning the Pacific into an inland sea and a huge economic zone.”

With Japan’s participation, the TPP will account for about 40 percent of global GDP. Mr. Abe said the TPP will have a net positive effect on Japan’s economy. But Japan should not entertain the delusion that TPP participation will necessarily strengthen the Japanese economy and enhance people’s well-being, because it’s possible that TPP agreements could undermine some economic sectors and weaken the social policy fabric such as public health insurance, which Japan has painstakingly established over decades.

The government and Japanese citizens must keep in mind that the TPP, whose character differs completely from an ordinary free trade agreement, could entail painful structural changes to the Japanese economy and society.

In deciding to join the TPP talks, Mr. Abe apparently took into consideration the economic, political and military rise of China. He said that deepening the economic mutual dependence between Japan and the United States and other countries would greatly contribute to Japan’s security and the Asia-Pacific region’s stability. But it must not be forgotten that the TPP talks are the venue for a fierce battle ground in which member countries are trying to maximize their economic interests. The TPP agreements will not be made public until after they are concluded.

In principle, all tariffs must be abolished under the TPP, a condition that could cause great hardship to some sectors including agriculture. In addition, the TPP consists of a set of wide-ranging trade and investment rules covering 21 fields including intellectual property, the environment, labor regulations, sanitary-quarantine matters and rules on orders for public works projects. By taking advantage of the TPP’s Investor-State Dispute Settlement procedure, foreign enterprises might supersede Japan’s political decisions and institutions in consumer safety, labor regulations, medical services, social welfare, environmental protection, etc.

Eleven countries — the United States, Canada, Mexico, Peru, Chile, Australia, New Zealand, Singapore, Brunei, Malaysia and Vietnam — have been negotiating TPP terms. Japan faces difficulty from the first because, as Mr. Abe admitted, “it will be difficult to overturn rules already set” by the 11 members.

Since Japan must get prior approval of every TPP member for its participation, it is expected that Japan could join the talks in July at the earliest. Not much time is left for Japan to maneuver because the 11 members want to finish the talks by yearend.

The U.S., the leading economy among the 11 members, has a clear idea of which Japanese business sectors it plans to target to expand its interests — among them the automotive and insurance sectors. It is clear that extremely tough negotiations lie ahead for Japan. Japanese negotiators must exercise ingenuity and do their utmost to protect Japan’s national interests and the public’s well-being in the talks.

As people are worried about possible disadvantages in such fields as agriculture, food safety, medical services and health insurance, the government must fully inform them on how the negotiations progress, explain the merits and demerits of TPP agreements, and clarify measures to mitigate negative effects.

  • jmanngod

    who is worried? not the consumer. The consumer recognises that they pay twice in Japan. Once in their taxes paid over the farmers (whose 5 to 1 vote disparity gives them the government they want 9 times out of 10) and a second time at the store where they pay inflated prices for the inefficient goods they buy. Give the Japanese consumer a product at its true value – and let it compete against foreign products on price.

  • Spudator

    So, according to the editorial, “foreign enterprises might supersede Japan’s political decisions and institutions in consumer safety, labor regulations, medical services, social welfare, environmental protection, etc.”

    And how exactly would this be a bad thing? Let’s take a few of those examples:

    Consumer safety: Remember a few years ago when a number of people died from carbon monoxide poisoning caused by faulty gas water heaters? Or how about motorists on expressways (they’re consumers, too) who just happen to be in the wrong tunnel at the wrong time when the roof collapses because the expressway operator hasn’t done any maintenance work?

    Labor regulations: The writer can’t be serious. Labor laws in Japan are a joke. Yes, Japan has such laws, and they may even be stricter on employers than those in the west. But with zero enforcement, they may as well not exist. Employees in Japan are completely dependent on the goodwill of employers. Best hope that in this feudal society your feudal lord boss has a sense of noblesse oblige.

    Environmental protection: Good lord! I can’t believe I’m hearing this. Two words: Fukushima Dai-ichi.

    It seems to me that Japan’s political institutions don’t give a damn about ordinary people. As has always been the case, the only citizens that matter to these institutions are corporate citizens. As far as I’m concerned, the sooner the TPP comes into effect, overrides the old men in Nagatacho and Kasumigaseki, and forces Japan to conform to international standards, the better.