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We hope the government’s newly established TPP task force will not disappoint by coming up with measures focusing only on agricultural protection. It is essential that it consider how to utilize the vast, envisioned free-trade area to develop our economy.
The government recently established the task force, which includes all Cabinet ministers, following a broad agreement on the Trans-Pacific Partnership free trade deal. It plans to compile a policy outline by year-end that includes measures to reinforce agriculture.
When the TPP takes effect, more than 400 tariffs on agricultural, forestry and fishery products will gradually be abolished or reduced. On the one hand, consumers will benefit from increased imports of cheaper foreign products; but on the other, it is unavoidable that domestic farmers will be dealt a blow.
Thus, it is understandable for the government to take certain measures to support agriculture and mitigate any negative impacts on farmers.
However, the key to agricultural protection does not lie in a surging agricultural budget. What is important is to enhance the productivity of farmers and create an environment that helps them survive international competition.
In this sense, a recent remark by Prime Minister Shinzo Abe was appropriate. “We’ll make the TPP deal a chance for [Japan’s] agriculture to shift to the offensive,” he said.
The government has spent ¥6 trillion to cope with the partial opening of its rice market following the 1993 Uruguay Round trade agreement. However, experts believe the measure had little effect because most of the money was used for measures such as agriculture public works.
Some members of the ruling Liberal Democratic Party insist the government spend more than ¥6 trillion on measures to support agriculture. Such demands for the government to raise its expenditure are expected to increase because next summer’s House of Councillors election is looming. We must remain vigilant.
Avoid excessive support
A point of concern is the government’s move to overly support farmers.
Japan will establish tariff-free import quotas for rice from the United States and Australia totaling nearly 80,000 tons. This is not a big amount — it is equivalent to about 1 percent of the rice produced in Japan — but the government said it will increase the volume of domestic rice it buys up as emergency stock, citing the possibility of those quotas causing the price of the nation’s rice to drop.
We want to remind the government that bullish measures aimed at maintaining the price of domestic rice will not only increase its financial burden but also diminish the consumer benefits of the free trade agreement.
After the deal takes effect, the United States will expand its tariff-free import quotas for Japanese beef. There are measures that could help promote domestic beef, such as utilizing information technology to improve the quality of the meat, as well as enlarging foreign markets.
It is also essential to pay attention to areas other than agriculture.
The task force has set a policy of using the TPP as a catalyst for promoting technological innovation and creating new industries. We urge the government to increase its efforts for product development based on the needs of importing countries, and also utilize advanced technologies to enhance the competitiveness of Japanese products.
The TPP agreement encompasses deals such as the removal of tariffs on most industrial goods and deregulation of trade and investment, as well as establishing rules for settling disputes. We hope this helps reduce the risks for small and medium-sized companies advancing into emerging nations.
The government should back up ambitious small and medium-sized companies by helping them establish regional supply chains and providing information on foreign markets.
