Page 3 of 3 A dry run for a Japan-US
FTA By Hisane Masaki
export to the US to take advantage of the
US-Korea FTA, some analysts say.
Fujio
Mitarai, chairman of the Japan Business Federation
(Keidanren), Japan's most powerful business lobby,
said that the US-South Korea FTA made Japan
realize once again that the world has ''rushed
into competition to form a network of bilateral
accords. Japan cannot be
allowed to fall behind,'' said Mitarai, who is
also Canon Inc chairman.
Since last
November, Keidanren has called for a Japan-US FTA,
saying it would strengthen bilateral economic ties
and reinforce the foundation for economic
development of East Asia. But both Tokyo and
Washington remain reluctant to open FTA
negotiations, at least any time soon.
Immediately after the US-South Korea FTA
was reached early this month, Abe said Japan must
study a Japan-US FTA as a future subject, without
giving a specific time frame. Minister of Economy,
Trade and Industry Akira Amari said it will be
difficult for Japan to enter talks with the US, a
big farming nation, unless it draws a successful
conclusion from negotiations with Australia over
the politically sensitive agricultural area.
''Issues of concern between Japan and the
US are larger than those between Japan and
Australia," Amari said. "Without using wisdom to
be gained from a breakthrough in talks with
Australia, I think it will be difficult to win
understanding from the public.''
Administrative Vice Foreign Minister
Shotaro Yachi also said, "There won't be immediate
negotiations [with the US], but there is a need to
study the issue." Yachi also said he was concerned
that the Doha Round of trade-liberalization
negotiations would suffer a setback if Japan and
the US, which together account for nearly 40% of
the global economy, were to complete an FTA.
Meanwhile, assistant US trade
representative Wendy Cutler said recently that her
country is reluctant to negotiate with Japan
unless it opens up its tightly shut agriculture
sector.
Rice is the most politically
sensitive item in both Japan and South Korea. The
US-Korea FTA is the largest Washington has signed
since NAFTA, but like Japan's FTA with Thailand, a
major rice producer, the US-Korea FTA did not
include rice after Seoul objected to opening up
its market.
But Cutler said that although
Washington agreed to exclude rice from the deal
with South Korea, it will not offer a similar
concession to Japan. "Clearly the agriculture
sector provides an obstacle to entering into such
negotiations with Japan because to date, Japan,
unlike Korea, has been - let's be honest -
unwilling to put its agriculture sector on the
table and negotiate concrete market-opening
provisions," she said.
Hiroko Ota, the
Japanese minister for economic and fiscal policy,
seems positive about an FTA with the US. She said
the Abe government will study the pros and cons.
"We need to study advantages and problems [of an
FTA with the US] from a viewpoint of the entire
people's interests."
Concluding FTAs is
considered to be the best avenue to cashing in on
rapid economic growth in other Asian economies, a
main pillar of Abe's growth strategy. But many
experts point out that Japan needs to reform its
heavily protected agricultural market - which has
been left largely untouched despite former prime
minister Junichiro Koizumi's reform drive.
Japanese proponents of an FTA with the US
agree that Japan should begin talks about such a
pact while ensuring competitiveness in the
domestic farm sector through such steps as
expanding the scale of operation by farmers and
letting joint-stock companies enter the
agricultural business to raise productivity and
create high-value-added products. Belatedly, the
Japanese government has actually begun to take
such measures to increase the farm industry's
competitiveness. But many critics say that so far,
these measures are far from sufficient.
Both Japan and the US already have
relatively low tariffs on manufactured goods. Any
deal between them would probably cover not only
elimination of tariff measures and liberalization
of investment and services trade but a much wider
range of areas, including harmonization of
competition and other policies. Otherwise, the
merits of concluding such a pact through what
would very likely be raucous and hectic
negotiations might not be fully realized by many
on both sides of the Pacific.
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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