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Published November 22, 2010, 09:33 AM

An important step for Japan’s ag trade

TOKYO — How should Japan open its market to farm products from abroad while reforming the agricultural sector?

TOKYO — How should Japan open its market to farm products from abroad while reforming the agricultural sector?

Japan quickly should take steps to regain lost ground in its trade policy.

Attempts to hammer out a consensus between the government and the Democratic Party of Japan over whether Japan should join the Trans-Pacific Partnership agreement have reached a climax. Nine countries — including the United States and Australia — are negotiating an expanded economic partnership framework.

Japanese Prime Minister Naoto Kan has been a vocal advocate of giving consideration to joining the negotiations. Accordingly, the government needs to spell out its proactive stance on the TPP.

However, the Agriculture, Forestry and Fisheries Ministry, agricultural organizations and many DPJ members oppose the TPP. This has complicated the government’s efforts to draw up the policy.

One compromise that has been floated would see Japan join the negotiations primarily to collect information on the framework, without specifying whether the nation will join the agreement.

This plan effectively would put off Japan’s joining the negotiations and mark a retreat from Kan’s position.

Not left out

The prime minister needs to exercise strong leadership to ensure Japan is not left out of the TPP.

The TPP agreement is based on the free trade agreement that came into force with four original members — Brunei, Chile, New Zealand and Singapore. Five more nations, including the United States, later joined the negotiations.

The TPP’s rules would abolish tariffs on commodities in principle. The nine nations have been negotiating with a target of concluding a final agreement next autumn.

As Canada, China and South Korea reportedly are interested in joining the talks, the TPP likely will expand into a huge economic partnership agreement.

Important economic move

If Japan does not join the TPP, this nation will be shut out of an international framework that will be crucial for its economic growth.

Furthermore, Japan would not have any say in deciding the rules concerning trade and investment for the Asia-Pacific region.

This is precisely why we think Japan quickly should join TPP negotiations and get involved in working out plans and rules for trade liberalization.

However, the biggest cause for concern is the likelihood that Japan would be pressed to abolish tariffs on agricultural products such as rice, which have been protected by high import duties.

Under the Uruguay Round of talks conducted under the General Agreement on Tariffs and Trade in 1993, Japan partially opened its market to rice imports.

Improving competitiveness

The government has provided farmers with assistance worth 6 trillion yen, but the international competitiveness of Japanese agricultural products remains weak.

We think the government was wise to establish a “headquarters for promoting agricultural reform” in conjunction with the TPP. However, Japan quickly needs to enhance the international competitiveness of its agricultural products.

To this end, the government should review its dole-out policy of offering income support for individual farming households and instead provide more assistance to farmers growing products such as rice and wheat.

Consolidating farmland will be essential to increasing the number of farmers capable of surviving trade liberalization.

The issue boils down to whether Japan can build a nation open to free trade while fostering farming households that are internationally competitive.