News Analysis: Japan joining TPP trade talks rattles farm lobby's cage
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E-mail Xinhua, March 15, 2013
Japan's Prime Minister Shinzo Abe confirmed Friday that Japan will join 11 other countries in talks to join the U.S.-led Trans-Pacific Partnership (TPP), expected to be finalized by regional leaders by the end of the year.
Following a meeting earlier on Friday with the ruling Liberal Democratic Party (LDP) Secretary-General Shigeru Ishiba, Abe said that by joining the Trans-Pacific Partnership (TPP), the economy as a whole would benefit.
He told Ishiba that he envisioned Japan being tough in negotiations and creating beneficial circumstances to encourage other Asian economies to join the pact.
"We expect a positive effect on our economy as a whole and now is the last chance to join the negotiations," Abe said in a nationally broadcast news conference.
"It is not only for Japan's national interests but also for the prosperity of the world. I believe that joining the TPP talks is a far-sighted policy and it is necessary for Japan to envision its future in 100 years," the prime minister stated at the news conference.
The LDP's smaller ally New Komeito leader, Natsuo Yamaguchi, was informed of Abe's decision earlier on the day, and Yamaguchi informed the premier that he had the backing of his party.
STRONG PROTESTS
Despite Abe's resolution to join the talks, however, the prime minister is facing strong opposition from Japan's agricultural sector and farming industries.
Japan's largest farm lobby and affiliates connected to state- protected farm and fisheries industries on Tuesday staged a 4,000- people strong protest rally in Tokyo, urging the government to reconsider its position, stating that participation in the TPP would trounce the nations agriculture sector due to an influx of cheaper imports.
"Anxiety and anger are spreading around us because we have not received a sufficient explanation from the government," Akira Banzai, head of the union, said at the protest, adding that he was extremely concerned that following a joint statement issued between Japan and the United States in February, Japan would be forced to negotiate on lifting tariffs on all products without exemption.
Banzai also pointed out that Abe's positive moves towards joining the TPP talks runs contrary to his party's election pledge, which stated the LDP would not join the talks if abolishing tariffs without exception was to be a precondition.
In support of Banzai, another prominent member of the lobby said that joining the talks could see the agricultural sector crushed.
"We shouldn't have to join the TPP negotiations at the price of hurting our national interests. Our (rice) industry could potentially be destroyed," he said.
"Japan has a very fragile agricultural sector," Laurent Sinclair, an independent research analyst for pacific affairs, told Xinhua.
"The sector imposes stiff tariffs on rice and other highly sensitive agricultural produce and joining the TPP may mean that Japan is forced to remove its (around) 778 percent tariff on rice within 10 years," he said.
Sinclair also remarked that, based on farm ministry projections, if the number of agriculture-related companies were to decrease due to TPP pacts, income and jobs in the agricultural sector could fall by as much as 25 percent
Other analysts have also pointed out other potentially devastating drawbacks of the government's plans to join the U.S.- led pact with the 11 other nations, which include Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Japan's health service may also be compromised if Japan joins the talks.
"The public health insurance system could also be adversely affected by a TPP pact, as medical insurance is not currently on the TPP agenda, but calls for Japan to overhaul its system could be made, with Tokyo not in a position to defend the system from such changes," Japan affairs commentator Kaoru Imori told Xinhua.
Imori went on to say that concerns were rife among anti-TPP factions that Japan could find itself browbeaten by the United States into lifting tariffs on sectors that could not withstand the pressure of influxes of cheaper goods and services.
To this point, Abe said that it was imperative for Japan to join the talks imminently so as to be a key player in the rule- setting. Further delays could leave Japan out of the loop and in a disadvantageous position when it comes to specific negotiations, the premier said.
QUID-PRO-QUO?
According to government sources on Tuesday, Japan's economy could grow by some 0.66 percent, or 3.2 trillion yen (33 billion U. S. dollars), in 10 years, following Japan entering the TPP pact.
But while proponents are quick to reiterate the yet-to-be- proven point that Japan, as well as purportedly, as Abe suggests, being able to keep its tariffs on rice and other fragile agricultural sectors, will be able to maintain certain tariffs for up to 10 years, the nay-sayers remain unconvinced.
"According to the government estimate, the flood of cheaper imports by participation in the TPP would cause a 3 trillion yen drop in the value of domestic agriculture products, from the current 8 trillion yen," the Asahi Shimbun newspaper said in a recent editorial on the matter.
However, in contrast to the farm lobbies, the industrial sector has welcomed the news, with Hiromasa Yonekura, chairman of the Japan Business Federation, Japan's largest business lobby also known as Keidanren, hailing Abe's announcement as a step in the right direction.
"The swift decision to join the TPP negotiations is the fruit of the premier's strong leadership and negotiating power, and we evaluate it highly," Yonekura said, adding that Japan should be an integral part of the decision-making process when it comes to negotiations.
Joining the TPP talks is "crucial for Japan to achieve sustainable growth together with the world," echoed Yasuchika Hasegawa, chairman of the Japan Association of Corporative Executives. His sentiments were also reflected in comments made by officials from the Japan Association of Corporative Executives, Japan Foreign Trade Council and other executive industry bodies.
"Abe's LDP has strong connections to farm associations, particularly those connected to constituencies in rural areas," Sinclair said. "Tensions are rife within his party over how this whole TPP affair will play out and it will be interesting to see how the opposing factions' grappling will affect the ruling party ahead of the upper house elections this summer," he said. Endi
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