Defend Japan’s interests in TPP talks

It is almost certain that Japan will join the talks for the Trans-Pacific Partnership free-trade scheme as the 11 countries now involved in the talks have reached a broad agreement to accept Japan’s participation.

Because it will take the U.S. Congress at least 90 days to approve the decision, Japan cannot begin taking part in the talks until late July. The earliest possible date is July 24.

The public should know that Japan will be negotiating from a very weak position. Because it is a latecomer to the talks, Japan must accept the terms already agreed upon by the 11 other participants. Japan also cannot view detailed reports on how previous TPP talks proceeded. Thus it will join the TPP talks without the government being able to fully explain the merits and demerits of becoming a TPP member.

The TPP could greatly change the economic and social fabric of Japan since it covers 21 fields including government procurement, competition policy, labor standards, intellectual property, financial service, investment, telecommunications and environmental standards.

Some people worry that the TPP could undermine Japan’s national health insurance system and other public policies. As the government has been reluctant to address these points, informed public discussions on these matters have not taken place.

It has become clear that Japan made great concessions in its preliminary talks with the United States to facilitate Congress’ approval of Japan’s TPP participation. Japan, which hopes that its car industry will benefit from the TPP, wanted the U.S. to remove its tariffs on passenger cars and trucks, which are 2.5 percent and 25 percent, respectively. But Japan eventually agreed to let the U.S. keep the tariffs.

Japan also wanted assurances that it could keep its high tariffs on rice, wheat, beef and pork, dairy products and farm products to make sugar, but failed to get them. Instead, Japan and the U.S. merely recognized that both countries have bilateral trade sensitivities — certain agricultural products for Japan and certain manufactured products for the U.S. Whether Japan can keep those tariffs depends on the outcome of the TPP negotiations.

Japan’s participation will likely greatly reduce its food self-sufficiency rate, but once again the government did nothing to encourage public discussions on this issue.

In addition, the U.S. is eager to expand its insurance business in Japan, and it appears that Japan has made a concession by agreeing not to approve the selling of cancer and other medical insurance policies by Japan Post Insurance Co. for several years.

Clearly Japan has been placed in a disadvantageous position. Apart from the Japan-U.S. agreements, the TPP includes an Investor-State Dispute Settlement procedure, which could enable overseas enterprises to override Japan’s policies on such matters as environmental protection and public health insurance.

The government should enter the talks with a strong resolve to protect Japan’s vital interests and not cave into pressure from the U.S. and other trade partners. If it finds that the TPP will not enhance the people’s quality of life, it should have the courage to withdraw from the talks.

  • antony

    It is difficult to see how joining the TPP will better the farmers/growers position. One of the pleasures of living in Japan is having access to very high-quality local produce (fruit, vegetables, legumes) that has been cultivated to a high standard and sold at fair prices. It is very worrying that many of these skilled family-run producers may dwindle in numbers and their produce will eventually disappear.

    At the very least, a referendum could have been tabled before signing on the dotted line. Fate has been stealthily taken out of the hands of the people who will be impacted hardest.

    • http://twitter.com/drichi2009 Puddintain

      I believe it is about improving the consumer’s position.

      How will protecting that inefficient, costly, rapidly aging group do anything for Japan 20, 30 years from now.

      As noted in the scare-story, hollow earth*, “Protect the Candlemakers” editorial, Japan does not have to sign any agreement. Nothing has been taken from “those impacted hardest.”

      What would keep those “skilled family-run producers” from becoming more skilled and competing with what I assume you believe to be lower quality imported produce? And why, if it is so wonderful, do you assume that consumers will not continue to insist on their produce? Isn’t it the consumer’s decision in the end? Thus, aren’t the consumers impacted the hardest when such a small group and their representatives control what people can buy or eat? Do they assume consumers are fools who will buy based only on price not understanding their superior quality produce ? Or do they fear that less well off people will buy less expensive produce and spend the extra money on other non-agricultural products?

      *The writer of the editorial slips in the mysterious “Some people worry that TPP could undermine Japan’s national health insurance and other policies.” Some people worry about the earth being hollow and filled with folks who live underground too. But like the health care scare, nobody seems to have actual evidence it exists. They just claim it does.

      • antony

        I think you will find the very opposite will happen. Choice of the consumer will be diminished by large volume suppliers who can undercut the competition with lower pricings and flood supermarkets with inferior quality produce. Supermarket stock will become ubiquitous irrespective of the name above the entrance. This has been evident in Europe since the advent of the EEC. I don’t see how a similar development can be avoided by joining the TPP. Pricings won’t become a discernible beneficial factor in the long run.

    • Starviking

      That’s all well and good for the farmers. For the poor it’s a case of not only high-quality produce, but nearly all produce being unaffordable. Back in the UK I never had to pass up on vegetables or fruit because they were exorbitantly priced – but from day one in Japan I have had to do so.

  • http://twitter.com/drichi2009 Puddintain

    Japan is the one responsible for joining at a late date, is it not? It could have joined much earlier, couldn’t it?

    Everyone expects Japan to defend what it believes to be its interests. One of those interests will be the rice market and other agricultural areas. We can expect Japan to press for the liberalization of foreign markets in areas in which it has the competitive advantage, and oppose opening its markets in areas in which it is inefficient. It has been this way for 30-odd years, and one of the reasons some of the other participating countries were skeptical about letting Japan in at this late date.

    Interestingly, I speak to folks in internationally competitive industries who very much supported Japan joining TPP , because not to do so would result in Japan falling further behind the rest of the world—paraphrasing their words.

    (Note the difference between that and those who seek to preserve small, inefficient often taxpayer subsidized farms which are run mostly by an ever shrinking group of part-time farmers. And note the differences between folks who are involved in internationally competing industries and those who write editorials that nearly no one reads, let alone listens to.)

    The quality of Japanese agricultural products. Well, this is subjective, but I remember 20 years ago when there was a difference in vegetables shipped to urban supermarkets, but not so much now if any, except in the same much higher prices in Japan, of course.Why does an ear of corn cost $3, but not taste as good as one that could be bought in some countries for $1?

    The bottom line is, if Japanese farm products are so much better, so superior, wouldn’t consumers continue to buy them without a group of bureaucrats deciding for us? How is protecting the rice market so that part-time farmers can continue in a subsidized industry beneficial to consumers? Wouldn’t increased—real—competition lead to more efficient farms in Japan? Couldn’t farmers figure out a way to be competitive and still provide superior quality? Or are they the new candlestick makers. http://bastiat.org/en/petition.html

    It’s a fair point that Japan keeps the interest of all its citizens in mind, not just the special interests. If Japan does not believe that foreign companies should compete directly with Japanese companies domestically, then it should be prepared to accept the same restrictions on its companies internationally.

    • Masa Chekov

      “Couldn’t farmers figure out a way to be competitive and still provide superior quality?”

      Of course not. It’s not possible to compete on price with the poorer countries of the world. Even a relatively decent income country like Malaysia can pay its workers so much less than what a Japanese farm could. How would Japanese rice farmers compete with cheap overseas agriculture? Easy answer: they can’t. This is clearly bad for the Japanese workforce, which is something that other countries in the TPP talks (like the US) seem to have forgotten is important.

      “I speak to folks in internationally competitive industries who very much supported Japan joining TPP”

      I’m sure you do. Folks in internationally competitive industries are concerned with what is best for internationally competitive industries. This is not necessarily the same as what is best for Japan.

      You mention health care “scare” and dismiss this as if it’s not a real concern. It is. Perhaps you do not feel it is, but it is for many of us.

    • Starviking

      Too true. All the special interest groups not only opposed the TPP, but even joining the talks. Blame JA and their comrades for the position Japan finds itself in.

  • http://twitter.com/drichi2009 Puddintain

    What is your source on this? What is the source which gives accurate information directly from the TPP talks that states Japans health care and insurance system will be changed? How exactly will it change. I have read this statement over and over and have not seen ay source other than rumor or speculation so far. If it is the case that a TPP agreement would somehow undermine Japan’s national insurance system, Japan is still fully capable of rejecting any agreement. An agreement by the way, that is far from being made yet.

    • Starviking

      I agree. Lots of claims – no proof. I assume that insurers entering the Japanese market are going to have to obey Japanese rules.

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