Mainichi Daily News, Japan
Business leaders call for Japan’s participation in TPP talks
8 October 2011
TOKYO (Kyodo) — Japanese and U.S. business leaders on Friday jointly urged the government to join the Trans-Pacific Partnership free trade talks soon, as the nine countries involved in the multilateral free trade framework aim to reach agreement on a broad outline in November.
At a symposium jointly held by the Japan Business Federation and the Washington-based U.S.-Japan Business Council, Hiromasa Yonekura, the head of Japan’s biggest business lobby also known as Keidanren, said it is "essential" for Japan to take part in the rule-making process for the regional free-trade negotiations.
"Japan should decide to participate in the negotiations soon so that it can lead with the United States, as the two biggest developed economies of the world, in the rule-making of a new economic partnership in the Asia-Pacific area under the TPP," Yonekura said.
Nine Asia-Pacific countries, including the United States and Australia, have been negotiating a trade liberalization pact through the TPP, hoping to agree on a broad outline of a deal at the Asia-Pacific Economic Cooperation summit meeting to be held in Honolulu in November.
Yonekura said Japan lags behind South Korea and other countries in terms of high-level economic partnerships. As a result, Japanese vehicle and electronic appliance makers have to compete with rivals under adverse conditions, including unequal tariff rates, in the United States and other major markets.
In another blow to Japanese companies, the yen has recently appreciated to a historically high levels against major currencies, he pointed out.
If Japan delays in promoting free-trade agreements further, that "could lead to the hollowing out of our nation’s industrial base and thereby badly damage the domestic job market," Yonekura said, suggesting that more Japanese companies may relocate their production and development facilities overseas in search of cheaper operating costs.
From the U.S. side, Jean-Luc Butel, chairman of the U.S.-Japan Business Council, said it would be important for Japan to join the TPP to create jobs and realize a sustainable economic recovery, while competing with rapidly growing emerging economies.
He said the TPP would not destroy Japan’s agricultural sector, as some people are concerned about an influx of cheap farm products from overseas under the TPP framework. And with the average age of farmers in Japan now over 60, the country’s agricultural sector needs to be reformed anyway, Butel added.
"The U.S. JBC believes the benefits of joining the TPP far outweigh the short-term costs," he said.
Japan was originally scheduled to decide by last June whether to join the talks with the nine countries, but the decision has been delayed as Tokyo reviewed its policy priorities after the devastating March earthquake and tsunami.
A guest speaker at the symposium, Keiro Kitagami, vice minister of the Japanese trade ministry, said it would be "extremely unnatural" if Japan decides not to join the TPP talks, led by the United States, an ally of Japan.
"I think it would be difficult to find (other) options from the viewpoint of diplomatic strategy," he said.
In a mid-September policy speech, Japanese Prime Minister Yoshihiko Noda said his government will decide whether to join the TPP negotiations "at an early date."