By Ryoji Watanabe, News Writer, MC/MPA’12
On October 26 thousands of people, swinging colorful flags and following behind farming tractors, took to the streets of Tokyo to protest against the Trans-Pacific Partnership (TPP) agreement, a new free trade agreement negotiated among nine Asia-Pacific nations including the U.S. This populist movement was organized in anticipation of the November APEC Summit, where the Japanese government is expected to announce its intent to participate in TPP negotiations.
Japan is now standing at an important crossroads that it has not faced since the Meiji Restoration of 1868, which ended the country’s two and a half century policy of national isolation. Today Japan is again faced with opening or closing itself to world trade. The U.S. first triggered the end of Japan’s national isolation 150 years ago, when U.S. Navy Commodore Matthew Calbraith Perry famously steamed into the port of Tokyo with a black-hulled steam frigate and threatened the shogunate to open Japan’s borders, or else. Once again, the U.S. is playing a big role in compelling Japan to open its markets up to imports – this time, not through “gunboat diplomacy” but with subtle pressure.
The increased U.S. interest in the Asia-Pacific region has been strongly affecting Japan’s trade policies in recent months. At the APEC held in Hawaii on November 14th, 2011, President Barack Obama expressed the importance of the Asia-Pacific for the U.S. interests, saying, “This is the world’s fastest growing region; the Asia-Pacific is key to achieving my goal of doubling U.S. exports.” He referred to the U.S. as a fellow “Pacific nation.”
Despite the existence of an economic trade initiative spearheaded by the Association of Southeast Asian Nations (ASEAN) in Asia-Pacific – which does not include the U.S. as a member – U.S. initiated TPP negotiations in the same region in 2008. Today, TPP is considered an alternative path toward achieving Free Trade Area of the Asia-Pacific (FTAAP), a proposed free trade area among all APEC economies. According to experts, the U.S. is promoting TPP out of fear that the integration of Asia Pacific countries under the leadership of ASEAN would lead to the effective exclusion of the U.S. from future FTAAP trade agreements.
Maki Yamamoto, an MPP’12 student who flew to Hawaii from Boston in early November to attend the APEC as a diplomat from the Japanese Ministry of Foreign Affairs, commented, “TPP was indeed one of the featured topics at APEC. I observed the U.S.’s strong leadership and willingness to engage in the Asia-Pacific.”
Considering the increasing importance ascribed to TPP by the U.S., Japanese leadership is finding that it has no choice but to engage in the TPP negotiation. However, TPP is problematic for Japan considering its “high quality” stipulation, which limits the number of products that are exempt from tariff elimination, and other provisions that do not square with Japan’s domestic industries, such as healthcare. With the country still in the process of recovery from the March 2011 earthquake and tsunami – particularly in the northern part of Japan, where rice farms were hit particularly hard – many farmers and some politicians are voicing concerns over TPP. They argue that Japan will once again face many of the same economic problems that it did when Commodore Perry forced Japan to sign a lopsided agreement in 1868.
Will history repeat itself? Will Japan suffer from bringing down trade barriers and see the destruction of its domestic agriculture capabilities?
It is essential to see Japan from a bird’s eyes view. Despite the government’s policy of protectionism, Japan’s agriculture only accounts for 1% of the country’s GDP and 3% of its labor force. Many argue that Japan’s agriculture is dragging down Japan’s economy by slowing down the free trade agreements that will increase its exports of high-tech products and services, markets where Japan has a competitive advantage. At the present time, Japan imposes an import tariff of 778% for rice, the most important staple of the nation, and 1,706% for devil’s tongue, a specialty item in Japanese cuisine.
Politics plays a huge role in this. In February 2011, Seiji Maehara, a former Foreign Minister of Japan, blamed political considerations for the shockingly high tariff on devil’s tongue; he pointed to the fact that several past Prime Ministers were from Gunma prefecture, where devil’s tongue is produced. The high retail price of Japanese rice has allowed small-scale farmers to continue producing rice in a way that has undermined Japanese rice competitiveness compared to the rest of the world.
During the 1980s, there were incidents of “Japan ‘BASHING’” when the country was attacked for its surge in exports. Today, however, the problem is more one of “Japan ‘PASSING’”, where countries are passing over Japan and reaching out to the increasingly attractive Chinese markets. In order for Japan to remain a prominent and viable economic force not only in Asia-Pacific markets but in world markets as well, the country must open its doors.
With the recent, aggressive interest of the U.S. in Asia-Pacific integration, the whole dynamic has changed. ASEAN countries, too, have now begun to step up the pressure on Japan. Just like samurais could not keep Japan from closing itself forever, modern Japan cannot sustain its current trading policy. TPP seems problematic and controversial in the short run, but with competition between the U.S. and ASEAN countries coming to a head, Japan now has a golden opportunity to negotiate a progressive approach for its future economic prosperity.