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Delay in joining TPP talks will harm Japan's interests

Publication Date : 27-12-2012

 

If the Liberal Democratic Party (LDP) and New Komeito truly attach importance to Japan's best interests, they must not delay in deciding to participate in negotiations over the Trans-Pacific Partnership (TPP) multilateral trade agreement.

LDP President Shinzo Abe and Komeito leader Natsuo Yamaguchi met Tuesday to sign an agreement on forming a coalition government. Their accord covers eight areas, including economic stimulus, diplomacy and security policies.

The agreement says the coalition government "will promote free trade more than ever," but on the TPP specifically it stipulates that the new administration "will pursue the course that best serves the national interests."

In their campaign platforms for the December 16 House of Representatives election, both the LDP and Komeito took a cautious stance on the TPP issue. The LDP said it "opposes taking part in the TPP talks if they are premised on abolishing tariffs without exception." Komeito said it "will create an environment [in the Diet] where full deliberations can take place."

The coalition agreement is a positive development if it leaves some room for participating in the talks.

Eleven countries, including the United States and Australia, are trying to reach an agreement on the TPP by the end of next year. Japan failed to decide to join the TPP talks and fell behind Canada and Mexico.

Participating in the TPP talks would be an effective means to help the national economy grow through free trade, and strengthen the Japan-US alliance.

No time for caution

Some LDP members are eager to enter the TPP negotiations, pushing for the incoming government to announce Japan's participation during a visit by the prime minister to the United States early next year. However, others remain cautious, calling for a decision to be delayed until after the House of Councillors election next summer out of fear that the party may lose the farm vote.

We understand the LDP wants to focus on "driving safely" at least until the upper house poll, but it must remember that inaction that could delay joining the TPP talks reduces the country's say in trade and investment rules, which could harm the national interests.

When it comes to a trade agreement, Japan can opt for pulling out of the negotiations or eventually rejecting the accord in the Diet if it is determined to go against the national interests. Assuming only bad scenarios even before joining the talks is not constructive. We urge the incoming government to announce at an early date that Japan will join the TPP negotiations.

Keep taxes simple

The coalition agreement states that discussions will be held on introducing reduced tax rates for food and other necessities as a measure to help low-income earners when the planned consumption tax hike goes into effect. This was a concession by the LDP to Komeito.

Such a system is simpler and clearer, as well as easier to understand than the Japanese version of the earned income tax credit proposed by the Democratic Party of Japan (DPJ)-led administraion. Applying the reduced tax rates to newspapers and books would help protect intellectual culture. We urge the LDP and Komeito to discuss and overcome problems such as how to decide what items should be subject to reduced tax rates.

On nuclear energy policy, the coalition agreement did not adopt the "zero-nuclear policy," which was in Komeito's election pledges, but instead called for the use of nuclear power for the time being. It said the coalition government "will reduce the nation's dependence on nuclear power plants."

We commend the agreement for its realism, which will allow nuclear reactors to be reactivated once they have been confirmed safe.

Abe has said he would review the DPJ-led administration's policy of not approving the construction of new nuclear power plants. It is essential to minimise negative impacts on the economy and employment, while also ensuring the safety of nuclear power plants.

 

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