Japan and TPPGroup 5 Day 4

Chien-Hui Chan, Julian Yang, Yi-Hau Li, Luigi Gonzales

Trans-Pacific Partnership (TPP)

A proposed trade agreement between several Pacific Rim countries concerning a variety of matters of economic policy.

The goal of the agreement is to enhance trade and investment among the TPP partner countries, to promote innovation, economic growth and development, and to support the creation and retention of jobs.

• Started by Brunei, Chile, New Zealand and Singapore to better integrate their economic relationships.

• There are 12 countries which are participating in negotiations for the TPP.

• These countries are collectively responsible for 40% of global GDP and 26 % of global trade.

21 items in TPP negotiations

Japan’s participation in TPP negotiations 2013 July 23rd 18th round of the negotiations - Japan has joined the negotiations.

2014 – present - Chief negotiators meetings and Ministerial meetings

Why Japan joined TPP negotiations?

Why Japan joined TPP negotiations?

Improve domestic economy. Ties with countries in the Asia Pacific and securing

new arrangements. An important complement to other Japanese trade

initiatives in the region. Provide Japanese firms and investors preferential

treatment in TPP partner countries. TPP deepens US engagement in the Asia-Pacific

region.

Arguments about TPP Some arguments are as follow:

The goods and services trade liberalization of TPP will make Japan a serious economic and social problems. Especially after liberalization of staff, Japanese workers’ jobs will likely be replaced by foreign workers(with low wages), and which led to serious unemployment problem.

Japanese agricultural markets need to open completely , and low-cost food will flow into the Japanese market, that will be a serious problem to agriculture-related practitioners in Japan.

Opening grain market will lead to Japan's food self-sufficiency rate from 40% to 14%, and the national security will be affected

We can find the main debate focused on the four aspect: agriculture, forestry and fisheries, health care industry, the local economy and Japan-US relations.

Arguments about TPP

1. Agriculture, forestry

and fisheries

2. Medical service

3. Domestic economy

4. Relationship with the

U.S.

Arguments about TPP

1. Agriculture, forestry and fisheries

Pros:

market liberalization will abolish agricultural subsidies, and that can promote enterprise management in related industries and reduce consumers’ expenditure.

(TARIFF: agricultural product:12% ； rice:778% ； wheat:252%)

Cons:

After the abolition of tariffs, low-priced goods will flow into the Japanese market, and Japanese deflation will be more serious

Imported products quality

Arguments about TPP

2. Medical service

Pros:

the shortage of Japanese physician and nursing labors will be relieved by TPP, and the operational efficiency of Japanese medical services will improve due to the competition in this market

Cons:

Relaxing the eligibility of foreign medical professionals will endanger Japan's high-quality medical services

Profit-oriented healthcare services will form the price competition in the market, and that will jeopardize the national health insurance system.

Arguments about TPP

3. Domestic economy

Pros:

Although the government procurement(GPA) project must be open to other Member, but it will help Japanese companies to enter the overseas market(ex USA). It’s beneficial to local economic development.

Cons:

After the market liberalization, local industry will face price competition and gradually lost its character .

Less competitive for local products, wage reduction.

Arguments about TPP

4. Relationship with the U.S.

Pros:

In TPP negotiation process, Japan and US will reconfirm the common interests in both countries, and that will help stabilize the development of the Asia-Pacific region.

Cons:

TPP forced Japan to choose sides(TPP or ASEAN+3), and make Japan more dependent on the US. It’s not in line with Japanese national interests.

Increase the dependency of Japan on the U.S.

What do Japanese think of TPP ?

Conclusion(1)

TPP will bring advantages and disadvantages influence on Japan. Some industries may be beneficial form TPP, but others may not, some even getting worse. It’s important for JP government to trade off and do some balancing policies(tax policy, law regulations)

TPP requires all members should keep the content of negotiation process in secret for 4 years after signing agreements. President Abe will face the dilemma between TPP and native agricultural industry(Rice, wheat, beef and pork, dairy products and sugar)

Conclusion(2)

Agricultural Related industry start to asked Japanese government should maintain transparency and public information during TPP negotiations, thus Abe must handle carefully between "secrecy obligation" and "transparency”.

Thanks for your attentions!