As his administration unveiled an outline of measures last week to help domestic industries cope with the effects of the Trans-Pacific Partnership trade pact, Prime Minister Shinzo Abe said the government will endeavor to make the economy stronger through the best possible use of the TPP, which will encompass markets of 12 countries with a combined population of 800 million, representing nearly 40 percent of the global economy. While the outline includes steps to help small and medium-size firms expand their overseas business, it is apparently aimed at quelling opposition and concern in agricultural sectors that will be affected most by the free trade regime, with an eye toward thwarting a revolt of agricultural votes against the ruling coalition in next summer's Upper House election.
Since the outline was compiled in less than two months after broad agreement on the trade pact was reached in early October, it is uncertain whether the steps featured in the package will produce desirable results, even though they come at additional taxpayer costs. The effectiveness of the steps need to be continually monitored and scrutinized, and the government should be ready to amend or scrap measures whose effects prove to be dubious or detrimental.
Once the TPP is ratified by the participating countries and takes effect, import tariffs on about half of all agricultural and fisheries products will immediately become zero. Over time, the tariffs on 80 percent of those products will be eliminated. The outline contains fairly concrete steps to support domestic producers likely to face stiff competition amid the increased imports and possibly suffer income losses. The steps include government purchases of the same amount of rice from domestic farmers as Japan will be obliged to import under the TPP deal, and raising the rate for covering the losses incurred by beef and pork producers from the current 80 percent to 90 percent.