Regional News
TOKYO — In a contentious move that could make or break his government, Prime Minister Yoshihiko Noda said Friday that Japan would join talks toward an ambitious pan-Pacific free trade pact. The accord would potentially open up new markets for Japanese exporters but enrage the nation’s powerful farmers, who say their livelihoods would be wiped out.
Mr. Noda is set to declare Japan’s intent at the Asia-Pacific economic summit meeting in Hawaii this weekend, where President Obama will promote the far-reaching Trans-Pacific Partnership regional trade agreement, which aims to cut import tariffs to zero. Nine governments, including those of Australia and Singapore, are involved in the discussions.
Speaking at a nationally televised press conference, Mr. Noda contended that global competition would ultimately build a stronger domestic economy, including a more competitive agricultural sector. He invoked his own farming roots, reminiscing about being carried on his mother’s back as she helped till the fields at her family’s farm.
“The smell of dirt forms the very basis of my childhood memories,” Mr. Noda said. “I am determined to preserve Japan’s traditional culture, its beautiful farming villages. But in order for Japan, which has built its prosperity on trade, to pass on its affluence to future generations, it must tap into the vitality of the Asia-Pacific region.”
The United States, which buys much more from Japan than it sells to the country, has long pushed for better access to Japanese markets. Tokyo’s participation would bring greater credibility to the nascent pact, analysts say, but could also complicate talks if the Japanese government is unable, or unwilling, to commit to slashing some tariffs.
For Japan, the pact would mean lower tariffs in the region for companies like Toyota and Sony as well as cheaper imports into Japan.
But it could also result in more global competition for highly protected domestic sectors, like farming. Just entering the negotiations on the trade pact would represent the biggest challenge yet to a small but powerful agricultural lobby, made up mostly of rice farmers, which has long wielded an outsize influence over Japanese politics.
Japan’s rice farmers have long been protected under sky-high tariffs, including a 777.7 percent levy on imported rice. They have already unleashed a vocal and highly emotional campaign against the pact, portraying it as a threat to the very fabric of Japanese society.
Their position has garnered strong public support, despite assertions from free trade proponents that Japan’s consumers would benefit from cheaper imports — especially of food, for which they pay some of the highest prices in the world.
“It’s not only farming that will perish,” said Shun Shirai of J. A. Youth, which represents young farmers. “Japan’s countryside, our way of life, will be destroyed.” This week, about 300 of the group’s members staged a sit-in in Tokyo to protest the pact, echoing arguments heard in parts of Europe and other countries where rural traditions are seen as threatened.
“However much we try to reform, we will be no match against large industrial farming in Australia or the United States,” Mr. Shirai said. “And does Japan really want to be dependent on imports for something as vital as food?”
Some within Mr. Noda’s own Democratic Party have vehemently opposed the pact, raising the specter of a party split that could doom his two-month-old government.
“We are looking at the prospect of totally free trade, of putting our entire fate at the mercy of free markets,” said Hiroshi Kawauchi, a leader of a sizable group within Mr. Noda’s party opposed to the agreement. “In free trade, the strong get stronger, and the weak get weaker.”
“If Mr. Noda ignores our caution,” Mr. Kawauchi added, “Mr. Noda can expect support for his administration to wane.”
Exporters have promoted their case for more open trade, saying Japan risks being left behind in the global economy. They say that joining the Pacific pact will enable Japan to compete better against regional rivals like South Korea, which has embraced free trade pacts.
South Korea has a free trade agreement with the European Union and recently negotiated a pact with the United States. Japan does not have trade agreements with either beyond the basic framework of the World Trade Organization.
Calls for free trade have reached a higher pitch in recent months, as Japan’s exporters have struggled to stay competitive amid a surge in the yen, especially compared with the South Korean won.
When the free trade agreement between the United States and South Korea takes effect as early as January, the South Korean automaker Hyundai will be exempt from a 2.5 percent tariff on exports to the United States that Japanese rivals, including Toyota and Honda, will still have to pay.
That may seem tiny, exporters say, but it adds to the heavy disadvantage caused by the strong yen.
Yoko Ishikura, a professor of global business at Keio University in Tokyo, said at a recent economic forum that the government had “not done a great job of explaining the benefits, and the debate has become emotionally charged.” That could make the trade pact “a turning point, a make-or-break moment for Mr. Noda,” Professor Ishikura said.
But, she added, “we need to ask: ‘What if Japan doesn’t join?’ That could be the bigger risk.”
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By: Hiroko Tabuchi
Source: The International Herald Tribune, Nov. 11, 2011
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