Editorial: Asian FTA negotiations: It’s up to Tokyo to set a positive example
The Asahi Shimbun, April 25, 2005
EDITORIAL: Asian FTA negotiations: It’s up to Tokyo to set a positive example
Japan and Thailand have run into difficulties in the final stage of negotiations for a free trade agreement. Japan attaches importance to trade agreements with East Asian countries, and Thailand is pivotal in that sense. It is hoped that the accord between Japan and Thailand will be a meaningful one.
Among the member countries of the Association of Southeast Asian Nations, Thailand is by far the biggest exporter of agricultural and fisheries products to Japan. Moreover, Thailand is intent on transforming itself into an industrial country centered on automobile production and the iron and steel industry. Thai Prime Minister Thaksin Shinawatra said that his country aims at becoming a Detroit in Asia.''
Since the mid-1980s, Japanese makers of automobiles and electric appliances have made huge investments in Thailand. In fact, Thailand has accepted more direct investment from the Japanese manufacturers of cars and electric appliances than any other country.
The focal point in negotiations between Japan and Thailand is on which items should be exempt from tariffs. Bangkok initially suggested that Japan scrap tariffs on Thai rice, sugar and chicken. But Japan wanted to cancel its tariffs on imported steel products and automobiles.
Japan finds it practically impossible to scrap its tariff on imported rice as well as to liberalize sugar imports, which would hurt the economies of Okinawa and Hokkaido.
Thailand subsequently reformulated its demand, and it is now likely that the two countries will agree to minimum liberalization including the lowering of Japan's tariff on chicken in the agricultural area. As a quid pro quo, Thailand has asked Japan to soften its demand for an elimination of Bangkok's tariffs on Japanese exports of industrial products.
The two countries may be able to conclude negotiations through the expansion of minimum liberalization measures. And grilled chicken and papaya and other fruits imported from Thailand may become cheaper.
But the agreement as such, which has the least deregulation on trade, will be counterproductive in Japan's trade negotiations with other countries in the days ahead.
Japan is about to begin talks with ASEAN as a whole, including Vietnam and four other countries with which Japan has not yet had bilateral talks. Japan and Indonesia have already agreed to begin trade negotiations separately. In the run-up to trade talks with those countries, Japan should not set a bad precedent by signing a poor agreement with Thailand.
China has already taken an aggressive stance by liberalizing imports of some agricultural products from ASEAN countries. China's strategy is to win over other Asian countries by opening up its huge market of 1.3 billion people to those countries.
Japan should take advantage of its own strengths. To realize wide-ranging cooperative operations with other countries, Japan should offer cooperative programs that will enhance the other parties' competitiveness. An improvement of the rules of foreign investment in other countries is an important task, which will also be to the advantage of Japan.
We should try to increase mutual benefits in the long term by making fine-tuned approaches to our trading partners' requirements, which differ widely according to their stage of economic development.
To increase the number of countries that will understand such a strategy, it is essential for Japan to demonstrate tangible achievements in free trade in the field of agricultural products. While the new round of trade negotiations within the framework of the World Trade Organization still remains stalemated, Japan's high import tariffs on rice and other items cannot be tolerated indefinitely.
If Japan, an advanced industrial country, intends to have its trading partners swallow a bitter pill, it should set an example by taking it first. Japan should renew discussions with Thailand on rice imports at an early date.
A meaningful free trade agreement should be sought to realize anEast Asia Community’’ that Japan aims at creating.
