Considerations for Japan as they participate in TPP.<\/p>\n
Yuriko Koiki writes: \u00a0After years of exhausting \u2013 and exhaustive \u2013 haggling, a dozen Pacific Rim countries finally signed up to the Trans-Pacific Partnership (TPP), an agreement that promises everything from more trade to a cleaner environment. The negotiations were such that the hair of Akira Amari, Japan\u2019s economic and fiscal policy minister, turned completely grey. His solace, however, is that the TPP will prove to be a key foundation stone of the \u201cAsian Century.\u201d.<\/p>\n
China\u2019s exclusion was no accident. Its huge and complex economy would have injected insuperable problems. \u00a0In response, China has launched its \u201cSilk Road\u201d initiative to create an economic zone that will favor its own priorities. It is also seeking greater trade cooperation with European countries. One example is President Xi Jinping\u2019s recent visit to the United Kingdom \u2013 which in essence is also an attempt to weaken Britain\u2019s \u201cspecial relationship\u201d with the US by creating a cat\u2019s cradle of trade, financial, and investment ties with Britain.<\/p>\n
But, as Japanese Prime Minister Shinzo Abe\u2019s recent call for talks with China on the issue confirm, the TPP is not off-limits to China \u2013 or to other Asian economies. South Korea is warming to the idea of the TPP, as is Indonesia, following President Joko Widodo\u2019s recent visit to Washington, DC.<\/p>\n
For Japan, the TPP is vital to achieve economic liberalization \u2013 the third arrow of \u201cAbenomics,\u201d the government\u2019s program to revitalize the country\u2019s ailing economy. The legislation to enact the TPP will simply push aside the lobbies and vested interests that have been so effective in slowing down or diverting piecemeal reforms.<\/p>\n
The promise of greater exchange of goods, services, and capital across the Pacific, as well as the creation of international standards (for example, for intellectual-property rights), is simply too appealing to ignore. When Japan and other Asian countries weigh the risk of implementing the TPP against the risk of not participating, the risk of not participating is overwhelmingly higher.<\/p>\n
Japan\u2019s political challenge will be to sell the TPP to its voters, especially the farm lobby. The customs duty on beef imports, for example, is currently 38.5%. It will be 27.5% in the first year after the TPP takes effect, and will then be gradually lowered to 9% in the agreement\u2019s 16th year.<\/p>\n
That should surely provide more than enough time for Japanese beef ranchers to prepare themselves for foreign competition (of the 870,000 tons of beef imported annually, 520,000 tons come from Australia, the US, and New Zealand). And it will certainly be a boon for consumers, as the price of their beef-noodle soup and sukiyaki falls dramatically.<\/p>\n
Japan\u2019s ranchers do need time to adjust. Because they deal with animals, shortcuts cannot be taken, and there are limits to mechanization, particularly in creating the type of beef that Japanese consumers demand. Whereas ranchers in Australia and the US have huge herds of cattle, Japanese ranchers raise each individual cow on beer and massages.<\/p>\n
The same applies to rice. Rumor has it that when the wife of a certain Chinese leader visited Japan, she bought a delicious variety of Japanese rice by the ton. Taking advantage of the worldwide sushi boom, Japan needs to emphasize that \u201creal sushi requires Japanese rice,\u201d branding it an exclusive product.<\/p>\n
In fact, regardless of whether or not the TPP is implemented, Japan\u2019s farmers must pursue this approach to secure their futures, rather than hoping that protective subsidies continue ad infinitum.<\/i><\/p>\n
But now comes the truly hard part. The TPP has been signed \u2013 but it will not be implemented unless and until it is ratified by the legislatures of countries such as the US and Canada. That process could well be enough to turn Amari\u2019s gray hair white.<\/p>\n
Considerations for Japan as they participate in TPP. Yuriko Koiki writes: \u00a0After years of exhausting \u2013 and exhaustive \u2013 haggling, a dozen Pacific Rim countries finally signed up to the Trans-Pacific Partnership (TPP), an agreement that promises everything from more … Continue reading ![\"Japan](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/11\/e7ded220-c6a2-4f8b-b2a7-5b9a19d61d82-300x180.png\")
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