--The Asahi Shimbun, Oct. 16
EDITORIAL: Noda should have broad perspective for debate on TPP
A project team of the ruling Democratic Party of Japan has started debate on Japan's participation in the Trans-Pacific Partnership (TPP) agreement.
Party members will discuss the topic in various meetings until early November, when the government is to make the final decision on whether Japan should take part in the ongoing talks over the trade liberalization pact.
An Oct. 12 meeting of DPJ lawmakers opposed to or skeptical about this proposal focused on issues related to the health-care and pharmaceutical industries.
At the meeting, senior executives of the Japan Medical Association warned that the deregulation of these industries resulting from Japan's participation in the accord would cause the health-care system in Japan to collapse.
Foreign Ministry officials in charge of the TPP pointed out that a public health-care insurance program is not covered by the TPP negotiations, but the participating legislators refused to be reassured.
The TPP talks deal with a wide range of areas, from farm trade, the touchiest topic, to labor, environment and food safety regulations.
The government should give the public detailed explanations about how the negotiations are going.
Opponents claim they are trying to protect the livelihoods of the people.
But it is important to find out whether such a claim is simply used as a pretext to protect the vested interests of related industries.
At the same time, the broad viewpoint of Japan's position in the world economy must not be missing from any debate on the TPP.
With the domestic market shrinking due to a declining number of children, it is vital for Japan to expand its economic cooperation with other countries, especially in the fast-growing Asia-Pacific region.
Few would dispute this argument.
Japan has been striking bilateral economic partnership agreements with trade partners in Southeast Asia and other parts of the world.
But these agreements have failed to produce significant effects because Tokyo, in an attempt to limit their impacts on domestic agriculture, has made sure through the negotiations that many items are exempted from the liberalization of bilateral trade.
While Japan has been dithering and waffling on how to tackle this policy challenge, however, the rest of the world has been taking action.
Typifying the trend is South Korea, which has emerged as a main rival for Japan in its mainstay industries, such as the auto and electronics sectors.
Following the coming into effect in July of South Korea's free trade agreement with the European Union, Seoul's trade deal with the United States has also been approved by the Congress and is now on track to come into force early next year.
The United States will phase out tariffs on South Korean products, including a 2.5-percent duty on passenger cars and a 25-percent tariff on trucks.
The European Union will also gradually eliminate import duties on products from South Korea, such as a 10-percent duty on passenger vehicles and a 14-percent tariff on flat-panel TVs.
Japanese industries are worried that these deals will put them at a serious disadvantage in competition with their South Korean rivals and may accelerate their shift of production to the United State and Europe or areas that have free trade agreements with the Western industrial nations.
In the late 1990s, South Korea decided that its long-term economic fortunes ride on external demand and started pursuing free trade agreements with its key trade partners while developing measures to protect its agriculture.
There are certainly some significant differences between the two countries.
South Korea is a much smaller economy than Japan and depends even more on trade for economic growth.
But Japan can learn a lot from the way its neighbor has mapped out a clear strategy for its economic future and pursued the strategy effectively.
The TPP offers the best possible opportunity for Japan to catch up with its rivals in the race to strike free trade agreements.
Prime Minister Yoshihiko Noda needs to hatch a grand trade strategy and provide the effective leadership needed to put it into action.