EDITORIAL: Pacific Rim trade pact

As the chair of this year's Asia-Pacific Economic Cooperation (APEC) forum, Japan is facing an important trade policy decision. During the APEC summit, to be held from Saturday in Yokohama, will Japan express a solid commitment to promoting the proposal to create a vast free trade zone encompassing wide areas surrounding the Pacific? Or will the host nation maintain a noncommittal attitude?

Prime Minister Naoto Kan needs to exercise strong political leadership to ensure the right decision is made so that Japan, as a major trading power, can contribute to pushing the world economy into a new direction of development and lay the foundation for its own renewed economic growth.

In his policy speech delivered at the beginning of the current Diet session, Kan pledged to consider Japan's participation in the Trans-Pacific Partnership (TPP) agreement.

Nine Pacific Rim countries, including the United States, Australia, Chile and Malaysia, are taking part in negotiations under the TPP initiative to create a highly effective free trade zone with no tariffs imposed on imports from other member countries.

For Japan, which has no choice but to seek trade-powered economic growth, it is not an option to stay away from a Pacific Rim free trade bloc in the making.

Kan made a natural move when he announced Japan's interest in joining the envisioned trade pact.

The prime minister, however, started wavering on the issue when the politically powerful farm lobby, which fears liberalization of agricultural imports, voiced objections to Japan's participation in the TPP agreement, provoking a loud chorus of opposition to the move within the ruling Democratic Party of Japan.

In a meeting of related ministers, the Kan administration decided to start talks with the countries involved in the TPP while making efforts to gather relevant information and swiftly improve the domestic environment for the initiative. But this is far from the clear and firm commitment the government should make.

Japan has been lagging in the race to conclude free trade agreements with major trading partners. South Korea's trade liberalization agreement with the European Union will come into effect in July next year. Seoul has also struck a free trade deal with the United States.

As a result, Japanese auto and electronics manufacturers will be at a disadvantage in competition with their South Korean rivals.

The situation must not be left unchanged.

With their bottom lines being hurt by the yen's gain against the dollar, Japanese exporters are shifting production overseas at an accelerating speed.

A further deterioration of the competitive conditions for domestic production would have an even more serious impact on the job situation at home.

Kan has stressed the importance of job creation for the revitalization of the Japanese economy by chanting "jobs, jobs, jobs." If he wants to promote his job-focused policy agenda, he should make Japan's participation in the TPP a priority.

Japanese agriculture is beset by serious structural problems: declining production due to shrinking acreage of cultivated land and the aging of the population of farmers due to a shortage of young people seeking a career as a farmer.

If these problems remain unsolved, there will be no future for Japan's agricultural sector. Radical reforms are urgently needed.

The TPP issue should be taken as a good opportunity to start tackling the reforms needed for development of Japanese agriculture.

The principal topic at the APEC summit in Yokohama will be the development of a Pacific Rim free trade zone.

If Kan, who chairs the conference, declares that Japan will join the TPP, he will make clear the direction Japan is going and open up a new vision for APEC's future.

That will also prompt positive responses to the idea from countries like China and provide a strong impetus for international efforts toward building an East Asian free trade bloc. Kan must not dither on this crucial issue.

--The Asahi Shimbun, Nov. 8