Macroeconomic Policy NewsPart 1 News: Growing Too Slow

Noda Delays Trade Pact Decision

Regional News

TOKYO—Prime Minister Yoshihiko Noda unexpectedly delayed an announcement that Japan will join regional free-trade talks, amid opposition within his own party.

The delay brings into question Mr. Noda’s ability to maintain the unity of the ruling Democratic Party of Japan, which has seen deep rifts in recent months over tax increases.

The postponement of the move to join the Trans-Pacific Partnership free-trade talks came a day after lawmakers from the party argued for hours about its position on the deeply divisive issue. After five hours, the DPJ’s TPP panel could agree only to “suggest the government decide cautiously.”

The premier said last week that he would “ultimately make a political decision” on the matter.

Chief goverment spokesman Osamu Fujimura said he believed “there has been no change” in Mr. Noda’s stance on pushing for a seat at the talks.

Opponents have been raising their voices in an attempt to be heard before Mr. Noda makes his official announcement, which is now expected on Friday.

More than a hundred dairy farmers demonstrated outside Tokyo’s parliament building on Thursday, saying the pact would destroy their livelihoods. Critics also insist that the pact threatens Japan’s universal medical insurance, as deregulation of insurance services may lead to privatization of health care.

Launched in 2006 by Singapore, New Zealand, Chile and Brunei, the TPP is meant to create a free-trade zone straddling both sides of the Pacific Ocean. Discussions have been under way since March 2010 to include five other countries—Australia, Malaysia, Peru, the U.S. and Vietnam.

Mr. Noda had been expected to hold a news conference Thursday afternoon to formally announce Japan’s commitment to join the talks.

But after much opposition from the DPJ camp opposed to joining the talks, the premier decided to “mull over for a day” the decision, Kyodo News reported, citing comments by DPJ policy chief Seiji Maehara.

Opponents within the his party force him to delay his decision until just before he leaves for the Asia-Pacific Economic Cooperation summit in Honolulu this weekend.

Mr. Noda is expected to discuss the issue with U.S. President Barack Obama at the summit.

Once Japan announces its intention to join, it must wait 90 days for the current participants in the TPP talks to allow Japan a seat at the negotiating table.

Write to Toko Sekiguchi at [email protected]
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By: Toko Sekiguchi
Source: The Wall Street Journal, Nov. 10, 2011
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