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2 Japan's big surge: Free trade
agreements By Hisane Masaki
members, and non-application of
numerical ceilings in issuing temporary residence
permits for certain categories of persons.
Japan expects that the
yet-to-be-negotiated FTA rules on investments and
anti-piracy measures will serve as the model for
future trade pacts. Japan believes that it will be
able to gain the upper hand in the race with China
for the leadership role in the economic
integration of East Asia if it continues to
spearhead efforts to realize a high-level
regionwide FTA some time in the
future that contains
commitments in many areas, especially in
investment and protection of intellectual
property.
Another - and perhaps more
important - reason for Tokyo's selection of
Switzerland as a new FTA partner is agriculture.
The Doha Round of trade negotiations was
suspended last July after the US, the EU and other
powerful countries were unable to narrow
differences over farm subsidies and tariffs. The
negotiations are facing a deadline of July 1, when
US President George W Bush is widely expected to
lose his fast-track authority to negotiate trade
deals. After that, trade talks will be harder to
pursue as the now Democrat-controlled US Congress
will very likely take a harder line on opening
markets to foreign competition.
In
negotiations to liberalize trade in non-farm
products such as automobiles and electronics,
Japan is on the offensive, but it is on the
defensive when it comes to agriculture. Japan has
dug in its heels on agricultural trade in the Doha
Round. Japan's agreement to enter FTA negotiations
with Switzerland, a close ally in the fight
against farm-market liberalization in the Doha
Round, is apparently part of its efforts to
strengthen its negotiating position at the WTO.
Japan and Switzerland are both members of
the Group of 10 (G10) countries considered
vulnerable to farm imports, which also includes
South Korea. Tokyo and Bern both stress the
importance of non-trade concerns, including food
security and the "multi-functionality" of
agriculture, such as land conservation and
socio-economic viability of rural areas.
Strong pressure has been placed on Japan
to liberalize its heavily protected agricultural
markets. It is vehemently resisting a proposal
supported by many WTO members to set a ceiling of
75-100% on the import tariffs for farm products.
Tokyo wants to keep those tariffs, especially for
politically sensitive rice, as high as possible to
shield weak and uncompetitive domestic farmers
from a flood of cheaper imports.
Japan is
also seeking to have a greater percentage of farm
products exempted from sharp tariff reductions
that many other countries demand. The US wants to
limit that percentage to only 1%, while the G10
countries, including Japan and Switzerland, are
demanding exemptions of 10-15%.
A new
tactic: Food exports Japan, the world's
largest net food importer, began to try a new
tactic a couple of years ago to breathe life into
its ailing agricultural sector: plying foreign
consumers with its own foods. To that end, Japan
is boosting government funding to help domestic
growers and businesses with market-cultivation and
export-promotion programs.
The country is
also beefing up efforts to eliminate the
increasingly rampant proliferation of pirated
produce varieties grown more cheaply abroad,
especially in neighboring countries, from prized
seeds developed and cultured by Japanese farmers.
Unless such cases of agricultural piracy are
nipped in the bud, not only could the growth in a
promising source of income for Japanese farmers be
stunted, but the government-led export drive could
stall.
The cabinet of then-prime minister
Junichiro Koizumi set a goal of doubling Japanese
exports of agricultural and marine products to 600
billion yen (about $5 billion) by 2009 from about
300 billion yen in 2004. His successor, Abe,
unveiled in his first parliamentary policy speech
last September an even more ambitious goal of
increasing such exports to 1 trillion yen by 2013.
Japanese food exports, especially marine
products and fruit, are on the rise, amid the
growing popularity of Japanese cuisine, which is
widely perceived as healthy as well as exotic.
Among the most promising products are apples,
pears, salmon and scallops. In 2005, Japan
exported agricultural and marine products worth
331 billion yen (about $2.8 billion). This export
figure is dwarfed by the country's import volume
of agricultural and marine products, worth about 7
trillion yen in 2005.
Last Thursday, China
agreed in principle to resume imports of Japanese
rice that had been suspended since 2003. The
agreement came during a meeting in Beijing between
Japanese Agriculture, Forestry and Fisheries
Minister Toshikatsu Matsuoka and Li Changjiang,
director of China's General Administration of
Quality Supervision, Inspection and Quarantine.
China placed an import ban on Japanese
rice in 2003, citing the risk of harmful insect
pests. China had imported several tons of rice
annually before that. Still, Japan is expecting
China's decision to resume rice imports to give a
momentum to the government's drive to expand
exports of farm produce.
China's basic
agreement to resume Japanese rice imports came
amid a thaw in relations, which had plunged to
their lowest point by Koizumi's repeated visits to
Yasukuni Shrine. According to the Japanese farm
ministry, the two countries will decide on when to
resume imports before a visit to Japan by Chinese
Premier Wen Jiabao, scheduled for April.
Hisane Masaki is a Tokyo-based
journalist, commentator and scholar on
international politics and economy. Masaki's
e-mail address is yiu45535@nifty.com.
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