Asia-Pacific trade initiatives

Dreams and realities

A battle over American-led free trade brews in Asia

Nov 12th 2011 | SEOUL AND TOKYO| from the print edition

THE American president is bringing a new—or at least rewarmed—cause to the Asia-Pacific region: free trade. Barack Obama recently signed a ground-breaking free-trade agreement (FTA) with South Korea, after years of Washington foot-dragging. He signed FTAs with Colombia and Panama on the same day. On November 12th-13th the president hosts an Asia-Pacific trade jamboree in Honolulu which, he seems to hope, will give momentum to the idea of a remarkably ambitious free-trade zone at just the time when global trade talks are going nowhere.

Mr Obama’s plans hang on negotiations for a little-known but rather liberal trade grouping, called the Trans-Pacific Partnership (TPP). These will take place on the sidelines of the annual summit of APEC (Asia-Pacific Economic Co-operation), a gathering long famed for its waffling. Currently, TPP members number only four small economies: Brunei, Chile, New Zealand and Singapore. But over the past year America, Australia, Malaysia, Peru and Vietnam have made progress in talks to join the club.

Were America a member, its trade with its eight fellow TPP members would amount to little more than 5% of all its foreign trade. But some quietly hope that the TPP will serve as a “docking station” for an APEC-wide free-trade area. That would further move the global centre of economic gravity from the Atlantic Ocean to the Pacific.

An announcement was expected after The Economistwent to press that will heavily influence such an outcome. In Japan the prime minister, Yoshihiko Noda, was expected to declare that his government would join the TPP talks, despite strong reservations even from within his own party. Japan’s share of America’s trade, at 5.6%, exceeds that of all the current TPP partners put together. A combination of American and Japanese heft could, say TPP advocates, entice other countries, such as Canada, to join the group. Even China, where some are deeply suspicious about the project, might eventually feel compelled to join.

Yet such impetus also hangs on South Korea. There, President Lee Myung-bak’s Grand National Party is desperately attempting to force ratification of the FTA with America through the National Assembly. It faces vigorous opposition from left-of-centre opponents—the same people who were in power when the original deal was agreed on in 2007. The public mood has shifted to the left before parliamentary elections next April.

Mr Lee’s struggle to win approval for the FTA in what is one of the most trade-dependent nations on earth foreshadows political problems that are almost bound to arise elsewhere during attempts to enlarge the TPP. In America many greet the prospect of Japan’s inclusion with caution. Congressional leaders from both parties question whether membership would really succeed in breaking down Japan’s “deeply embedded barriers” to cars, farm products, medicines and other American exports.

There is opposition from the United Auto Workers union, whose backing will be crucial for Mr Obama in the presidential election next year. His support for free trade has never been more than tepid. Adding to the potential complications, the TPP would need the Obama administration to ask Congress to pass the bill under “fast-track” trade-negotiating authority, something very unlikely in an election year.

Smaller TPP members will welcome Japan more readily, partly because it would give them access to a second huge market in addition to America’s. And Tokyo might act as a counterweight to Washington in sensitive areas such as pharmaceuticals. However, all the minnows worry that the “gold standard” trade talks might be tarnished by enlargement. Currently, almost everything except labour mobility is up for liberalisation, making the TPP one of the most comprehensive free-trade treaties yet conceived. But if Japan takes part, it may seek to take its protected rice market off the table. That might embolden American efforts to shelter its extravagantly subsidised sugar industry.

Yet the biggest battle may be in Japan itself. Analysts say that though Mr Noda believes in the TPP as a means to bring about a more competitive economy, he has yet to convince the public of its merits. And so the field is open to vocal opponents, who include protected farmers, doctors and small businessmen fearing an onslaught of competition. The main argument used in favour of TPP in Japan has been defined in negative terms: that without it, Japanese firms will be hard-pressed to compete with South Korean ones benefiting from their country’s myriad free-trade deals of late. That is hardly an inspiring cause.

To win over American sceptics, Mr Noda will need to convince his counterparts that he has enough domestic support to negotiate in good faith. If he can achieve that, Japan might start a long-overdue push to reform and revitalise its economy. And then the TPP might become more than just another Asia-Pacific acronym that only wonks have heard of.

from the print edition | Asia

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Dreams and realities

Nov 13th 2011, 15:30

For Japan’s Yoshihiko Noda and South Korea’s Lee Myung-Bak, to dance with Barack Obama harmonically is a troubled problem when it comes to the individual nation’s reaction to “free trade” or “U.S.”. In South Korea, as I once talked on Economist.com about how Lee Myung-Bak has been sorrowfully protested for several weeks due to his adament willingness to preferring Samsung, LG and Hyundai, Seoul still develop her so-called “centralised” economy and U.S-dependent strategy.

Like Taiwan in 2002, Japan now faces the embarrassment of the advancing direction. In 2002, Taipei got the entry ticket of World Trade Organization after Democratic Progressive Party’s President Chen Shui-Bian surpassed the dilemma between the care of old farmers and the progress of industrial leaders. After the 311 Eastern-Japan earthquake, the situation of stumble economy is getting more serious. The sign of TPP is not only a strong prescription but also exciting new thoughts of Japan’s economic strcture. Although Japan owns enough national power to keep the world-famous scenes while figuring out certain way of industrial development (of course to do so costs more), DPJ is inclined to bet inner economy on TPP; in addition, Tokyo can promote the relationship with the Washington D.C. when Barack Obama would like to adjust his arrangement on Pacific Ocean concerned.

Almost at the same time, the chairman of the Japan Business Federation (Keidanren) , Hiromasa Yonekura, called a meeting on last Wednesday with the head of the Central Union of Agricultural Cooperatives (JA), Akira Banzai. The two sides failed to settle their differences during the nearly one-hour-long meeting. Both sides offered good opinion on whether Mr. Noda should sign in TPP with the United States. Keidanren intends to let the export expand fast by depreciating yen while JA wants to protect Japan’s nature from the erosion of industry or the damage of foreigner.

For at least twenty years under Liberal Democratic Party’s reign from Yasuhiro Nakasone to Koizumi Junichiro, Japan’s economy has depended on both industrial innovation by the leading Sony as well as Toshiba and the sightseeing. About eleven years ago, I took a trip to Japan in summer vacation for Taiwan-Japan cultural exchange with my junior high orchestra team. I highly praised the Hakone hot spring, and i-chi-bon of the world (No.1) Shinshu noodles for Japan’s visionary beauty of nature. Also impressing on me, Tokyo’s high-rise in Ginza second to none and Chibaken’s Disneyland Resort represented the richest position in Asia. Of course, the long-term reign of LDP is the cause of strong Japan economy. Indeed, after then prime minister Shinzo Abe, Japan’s artificial and natural vision gradually became different from the face of that twenty-year period.

With so many rapid change in recent two years, I think Japan has no choice but to sign in TPP. In this way, the Libra of Beijing-Tokyo-Washington D.C. is forming. Accompanying the visit invitation by China’s President Hu Jing-Tao yesterday, Japan led by Mr. Noda may get benefit from the advantage compared with U.S. and China. This time, China must need to expand the power through a series of free trade agreement concerned of Pacific Ocean. The past has its memory; however, the future waits for those who keep the nation well, doesn’t it?

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亞太地區的自由貿易議題從GATT演變成WTO後到這天一直是鼓勵聲多於噓聲。後來川普的保護主義會再很後面提。也就是說這方面的區域政治一直離不開貿易談判。日本國內年前才受311東日本大地震影響，農業尚未復甦回來，至今2018年對於放射線疑雲仍然有疑義，若說要談TPP，野田佳彥除此之外還要調漲消費稅，雖說民主和自民兩黨均表支持，但政治現實是若野田一提個不好的子政策，民意如流水消逝。民主黨本身也偏本土，保守於自由經濟，捉襟見肘算有。

這篇有些是原來NHK World 英語版的句子，算一邊臨摹一邊增進寫作實力，也能多了解日本當代政治之用。最後一段看看就好，筆者國中時曾經陪校內新北新莊國中管樂團2000年暑假至日本遊玩的小印象。

Free-trade agreements

Opening up the Pacific

Nov 12th 2011, 7:08 by H.T. | TOKYO

MOST Americans have not heard of the Trans-Pacific Partnership (TPP), a free-trade area of countries dotted around the Pacific Ocean. They will soon. This weekend it has suddenly emerged as the most promising trade liberalisation initiative since the Doha round of world-trade talks stalled in 2008. On November 11th, Japan, the world’s third-largest economy, announced its intention to join America and eight other countries in negotiating what its advocates hope will emerge as the new gold standard for free trade in the world’s most dynamic economic zone. Reuters reports that if the ten-country deal is concluded, it will cover a market 40% bigger than the European Union. The news has electrified the summit of Asia-Pacific Exporting Countries (APEC) convening in Honolulu this weekend. President Barack Obama, who acts as the meeting’s host, hopes the TPP will be the cornerstone of an APEC-wide free-trade area. With the euro zone in shambles, that would further shift the world’s centre of economic gravity from the Atlantic Ocean to the Pacific.

There are plenty of reasons for the mood of celebration. After less than three months in office, Yoshihiko Noda, Japan’s prime minister, has made one of his country’s boldest policy decisions in years, which could unleash a chain reaction of reforms in the moribund national economy. His decision may spur other big economies, such as Canada, to make renewed efforts to join the negotiations, which currently include America, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam. If America and Japan can pull off such a deal, the TPP could challenge China’s own free-trade push in the region, which revolves around the Association of South-East Asian Nations (ASEAN), South Korea and Japan, rather than the Pacific Rim. By joining with America, Japan also hopes to influence global technological standards in industries like electric cars and clean energy, rather than having those heavily swayed by China.

There are, however, huge hurdles to overcome in the meantime. Mr Noda’s decision was delayed by a day because of the extent of opposition to trade liberalisation within his own Democratic Party of Japan (DPJ), let alone the opposition. His ambitions threaten to be hijacked by Japan’s farm lobby, which is hugely powerful politically, if of puny economic significance. In announcing the deal, he pandered to his own party’s sensitivities, declaring he would “firmly protect Japan’s world-class medical system, traditional Japanese culture and beautiful farm villages.” Such talk is bound to echo ominously in Honolulu; the other nine TPP countries will have some reservations about letting Japan join the talks. Ron Kirk, America’s Trade Representative, while welcoming Japan’s participation, set out America’s concerns that Japan should be prepared to lower hurdles to competition within farming, services and manufacturing, as well as non-tariff barriers. Congressmen from car-producing states such as Michigan have urged the Obama administration to be cautious in welcoming Japan. Ford, the carmaker, described Japan as “the world’s most protectionist country”, which ships 200 cars to America for every one that is sent to Japan. Montana ranchers also complain about sanitary barriers to imports of American beef.

Many of the smaller TPP countries welcome Japan’s participation for the access it would give them to a second giant market, alongside America’s. But they, too, are concerned that Japan will try to water down the treaty’s ambitions, which are for free movement of almost everything except labour. They also worry that bringing Japan on board will slow down negotiations, which, after eight rounds so far, they had hoped would be completed next year. Until Mr Noda has more solid support from his own party, or more broadly from the Japanese public, they will also have legitimate concerns about his ability to negotiate in good faith. Pointedly, he has kept open the possibility that Japan could pull out of the talks if it does not like the direction in which they are headed. This would of course be anathema to the rest of the TPP nations.

According to Meredith Broadbent of the Centre for Strategic and International Studies in Washington, DC, there is a “fortuitous window” for Japan to join the talks now. She does not think Americans are inclined to concentrate on trade issues during the presidential election campaign in 2012. After the election, whoever wins would be able to win support for a deal with the TPP. However trade with Japan has long been a bone of contention in America; some of its top trade negotiators cut their teeth battling for access to Japan’s markets in the 1980s. Japan’s participation in TPP talks could push it up America’s political agenda, unhelpfully.

In Japan, meanwhile, this decision will almost inevitably define Mr Noda’s premiership, even as he struggles with other huge issues, such as tackling the aftermath of the March tsunami and nuclear disaster. It is not clear he has the political strength to pull it off, but at least he should be commended for trying. On November 11th, before he made his decision, American academics, including Ms Broadbent, spoke at a panel in Tokyo called: “How Japan Can Survive the 21st Century”. In broad strokes, they found that the best grounds for optimism lay in the possibility of its joining the TPP. If Mr Noda can achieve that, it would be a great bit of news for reform in Japan and for the world economy at large. Right now, that’s something everyone badly needs.

(Picture credit: AFP)

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