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Friday, Jan. 11, 2013


Wanted: answers on TPP impact

This will be a big year for Japan in trade talks. Expanding trade is important for the Japanese economy because Japan lacks natural resources. In conducting trade talks, Japan must (1) try to find agreements beneficial to all negotiating partners while (2) protecting national interests, especially by preventing trade agreements from tearing up communities and from undermining the social policy fabric that Japan has painstakingly established over many decades.

As the member countries of the World Trade Organization have given up on reaching agreement in the Doha round of trade talks, efforts by countries are moving toward establishing bilateral or multilateral trade agreements.

Early this year, the United States and the 27-member European Union are expected to agree to start talks on a bilateral free trade agreement that would cover about 30 percent of global trade.

Talks will also start early this year on an Asian regional free trade agreement involving 16 countries, including the 10 member countries of the Association of Southeast Asian Nations, Japan, China, India and South Korea. In spring, Japan and the EU are expected to begin talks on a bilateral economic partnership agreement, covering trade, investment and services.

Prime Minister Shinzo Abe hopes to visit the U.S. soon and meet with President Barack Obama. Whether Japan takes part in the Trans-Pacific Partnership free trade talks will be a sensitive topic. The Liberal Democratic Party's official position is that Japan will not participate in the talks as long as participating countries maintain the position of "no sanctuaries" for tariffs. The party wants Japan to maintain its high tariffs on agricultural imports.

After the LDP won the Dec. 16 Lower House election, Mr. Hiromasa Yonekura, head of Nippon Keidanren (Japan Business Federation), called on the LDP to quickly decide to take part in the TPP talks. But Mr. Akira Banzai, head of JA-Zenchu (Central Union of Agricultural Cooperatives) expressed the hope that the LDP will oppose the TPP from the viewpoint of protecting not only the domestic agriculture industry but also medical and other social welfare services.

The biggest problem with the TPP talks is that the Democratic Party of Japan has not fully explained the TPP's merits and demerits. There is a view that the TPP will undermine Japan's public health insurance system because it will give private insurance firms the upper hand in the health insurance sector. Another view holds that the health insurance systems of participating countries won't be taken up at the TPP talks. Yet another view says that some interested parties may try to damage Japan's public health insurance system by invoking the investor-state dispute settlement mechanism of the TPP.

The government has a duty to fully explain what the TPP's effects would be on the nation's social welfare system as well as on agriculture and other industrial sectors. If it cannot, people's suspicion of the secretive nature of the TPP talks — which ignores their right to know — will deepen.

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