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Japan’s current trade fiasco

32 Comments
By Peter Dyloco

A recent article by the Wall Street Journal investigates Japan’s inability to sign off on potentially lucrative FTAs. The main reason? Farmers. The author of the article points to the disproportionate amount of power farmers and special interests groups in Japan wield in government and notes that without political reform, the Japanese economy will continue its slow but gradual decline.

The “why” of it all is simple: Japan’s political system today has much in common with that of 18th century Britain. Both cases are characterized by the under-representation of urban areas, and too much power being given to rural constituencies. In Japan’s case, only 38% of the seats in its upper house are given to its six most urban prefectures. Any attempt to pass an FTA would (in all likelihood) be blocked by the farmers’ veto power despite its bicameral legislature.

Cross-ministry negotiations also takes place before any action can be taken. As it stands to take a loss, the Agriculture Ministry can simply veto the approval of the FTA regardless of the benefits it would bring to other sectors of the Japanese economy.

Japan must look back to examples in history in their attempt to find a solution to the problem.

The first examples that come to mind are 18th century Britain and post-Revolutionary America. Following its union with Ireland in 1801 and faced with a similar situation, Britain (now the United Kingdom) passed the Reform Act in 1832 with the help of enormous public pressure and a lot of violence. The result was a more balanced system that more accurately represented the will of the people.

Similarly, post-Revolutionary America was ruled by state governments and minority interests, which left the weak federal government with little to no power to make lucrative trade agreements with former parent Britain. After drafting the Constitution during the Constitutional Convention of 1787 and ratifying it the following year, however, the federal government managed to achieve its goals through the Connecticut Compromise and through the separation of powers.

Fast forward to present day Japan, and you’ll see that Japan is faced with a similar problem. In both of the cases above, political reform was the only means by which they were able to achieve progress. What Japan needs to do now is the exact same. Current negotiations within government are futile without overhauling its political system altogether. The country needs more accurate political representation of its urban areas (and consequently, the majority of the population), who stand to benefit the most from any major free trade agreement. What the Agriculture Ministry and many Japanese farmers have to realize is the disservice that they are doing in indirectly preventing the recovery of the Japanese economy from its current stagnation.

One has to realize, however, that it’s a two way street. Nothing can be done without the will and assent of the people. Like 18th century Britain, the majority must make a stand. It shouldn’t be a question of if, but rather how the Japanese can voice their support for the TPP. Without standing up for something that you would profit from, how can your voices be heard over the current megaphone of minority rule?

Japan is at an important turning point culturally, politically and economically. Political reform for the sake of achieving free trade would be the first step in the right direction.

© Japan Today

©2020 GPlusMedia Inc.

32 Comments
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Good, relevant point. But it assumes Japanese society is rational.

Rather, the stumbling block is psychological...all those years of government-sponsored propaganda that brainwash Japanese people into believing that foreign rice is dangerous. I was here during the "rice crisis" of the early 90s, and the attitudes were disgusting. Japanese residents threw their Thai rice in garbage piles, while politicians in the Diet proclaimed that foreign rice was dangerous, as it contains things like rat bones (which is also common in Japanese stored rice, tho' that conveniently wasn't mentioned).

Those hardened attitudes will have to change first. The DPJ's election indicates that the political system is already somewhat flexible.

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So the Japanese farmers should let their own interests go down the toilet to let other people get rich. They become homeless for others? This is just the way that republicans think. Let others become poor so that they can become rich. TPP is just going to be a nightmare for the farmer and the consumer--in the long run. Less agricultural and food independence means that food imports will rise with the rise of diesel in which to import it. That means food prices EVERY year. Stupid idea in the long run. Let these whiners just whine.

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TheRat, this is world trade. The Japanese car, motorbike and consumer electronic industries destroyed their counterparts in the West. It is not fair to expect industries vulnerable to imports to be protected in a country that screams unfair when other countries try to protect their vulnerable industries. Apart from that, the farming industry is literally dying out in Japan. Farmers are getting older and older, yet young people do not want to take over their work. Young people want to work in offices and not on farms.

JeffLee, I remember those times. I remember one day reading about the danger of imported Thai rice and on the same page reading about the high incidence of a certain cancer in Niigata farmers, and we all know what they are famous for growing.

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The reason that Japanese housewives didn't like Thai rice was that Thai rice is nothing like Japanese rice in taste or texture (it's long grain and not glutinous and comparatively hard when cooked). I've lived in Japan a long time and I can safely say I've never encountered any government brainwashing about rat bones in foreign rice (or seen any rat bones in my Japanese rice). You'll be telling me next that all Chinese farm produce is safe or that European governments don't protect their farmers with huge subsidies or that farming conglomerates in America don't do any brainwashing on an unsuspecting U.S. public.

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"The author of the article points to the disproportionate amount of power farmers and special interests groups in Japan wield in government and notes that without political reform, the Japanese economy will continue its slow but gradual decline."

If this isn't the pot calling the kettle black!!!!

One word here: LOBBYIST!

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It is a specific example but it is only the tip of the iceberg, it is true that our democracic system is so flawed that the policy makers on the Diet no longer represent the interests of the majority of the japanese people. When we talk about reform, what we really need is a reform in the constitution for change the bicameral legislature in to a system that balance in one camera represent the minority by giving the same votes to geographic areas and in the other camera represent the majority with a number of votes proportional to the number of voters. But most of the population is clueless, because the so-called japanese intelligentsia (scholars and media) have the same (lack of) quality of the japanese "tarento" on TV.

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The reason that Japanese housewives didn't like Thai rice was that Thai rice is nothing like Japanese rice in taste or texture.

So...it's not Japanese, so let's reject it. Well, good luck with your FTAs.

Thanks, Billyshears, for supporting my point - the attitude you described is indeed consistent with brainwashing.

I'd like to point out that I love German and French breads, even though I was raised eating different types of bread. Thankfully, I was never indoctrinated to hate things that are different or foreign.

(BTW, In 1994, foreign suppliers did send glutinous rice, but many Japanese refused to eat it, including dumping it in the garbage.)

Moderator: Back on topic please.

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Well, possibly at present, but "no" in 10years. If Japan's food self sufficiency was 60-70%, it may be attractive, but locking Japan into a trade agreement that will pressure the agricultural sector is not good. W/ climate change influencing greater volatility in growing seasons, Japan needs much greater control in increasing food self sufficiency. Extreme caution is advised, and to wait to see how other's fare in the TPP is better. Well acquainted w/ the Mexico/Japan trade agreement, and that was very clearly contentious over agriculture. Japan may wish to "wait and see" on this issue now, and to selectively pick and choose those agreements that is well suited for the agricultural situation. No matter what Japan decides on this, the agricultural sector must be much, much more stronger in 10 years.

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BShears, you may have been here for a while but you definitely werent here in the mid 90s or you wud remember the non sense that was spouted, Jpn caused a lot of problems in Asia because it suddenly bought a LOT of rice, driving costs up in other countries & causing shortages as well, it was an incredibly selfish & embarassing time to be here! BUT the good thing was it was easy buy some damned good Thai-mai!

As I have said lots of times if Jpn doesnt make major changes in the way agriculture is done, the world wont just continue to pass Jpn but if Jpn keeps missing these new fta boats its going to watch a lot of its major exporters ditch these isles & take up residence elsewhere as staying here will put them at too high an uncompetitive disadvantage, hell this has already been happening with the production side, its only a matter of time before head offices, research centres also fly this coup!

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Let us follow the American model, it's the only way... NOT! Japan is yet to socialize its car industry, yet to see its fourth largest city abandoned and yet to see whole swathes of society left in the cold.

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It is not fair to expect industries vulnerable to imports to be protected in a country that screams unfair when other countries try to protect their vulnerable industries.

G.Traveler: you are missing my point. It is going to COST me in the LONG RUN, BIG time. Never mind the fact that countries protect their industries (America let its manufacturing industry pretty much go down the toilet while protecting its large agricultural industries). So, because of this, Japan can not do both!? There is NO gain to a large part of Japan (the rural areas) in agreeing to this free trade, which has worked NO WHERE! The Mexican farmer could not even compete with the subsidized corn. Even though they were, in large, part, a few acres in dimension and no machines, and very little overhead! In the end, they made and are making their way north, as there are no jobs and no food!

As I have said lots of times if Jpn doesnt make major changes in the way agriculture is done, the world wont just continue to pass Jpn but if Jpn keeps missing these new fta boats its going to watch a lot of its major exporters ditch these isles & take up residence elsewhere as staying here will put them at too high an uncompetitive disadvantage, hell this has already been happening with the production side, its only a matter of time before head offices, research centres also fly this coup!

Oh, right-winger you! Oh, Japan is so, so lost, isn't it? You want lost and hopeless, visit Mexico which bought in to the free trade gig, only to find its industries wiped out! And if the ones that did go there, ended up in China. This benefits only the companies. I will pay in the end for this, especially when the food ships stop coming! Whatever happened to the concept of food independence?! BTW: Major exporters, are flying and ditching these isles NOT because of the lack of free trade, but because of the crappy competitive currency speculation that goes on.

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The Rat,

Surely even you can see its in Jpns self interest to improve its agricuture production, if only to increase its food independancy.

I agree big companies world wide are fleecing us all but Jpn is getting near the point where it will literally just be kind of abandoned by the rest of the world, others wont buy Jpns exports & then Jpn wont be able to buy imports & then its back toward fending for itself on these isles, that will be hard to take for the masses here

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300 years on ITS own GW. Forced, FORCED open by the US. Japan will do just fine baby, JUST fine.

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America will likely collapse soon because it offshored all it's industries leaving everyone in debt. Japan can ride out the business chattering classes

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Food protection is a good thing if you value your health. This particular issue given the comparison of health in other countries is what works in Japan and most definitely not be dismantled. It works and as a result Japan will not collapse. There is no growth anymore, but Japan is used to this. The rest of the world is not. They can't even see it

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U.S. farming is a huge agribusiness protected by expensive lawyers in Washington. Any notion of fairness of trade is a fiction. Anyone fly across the U.S.? The sheer vastness of farming land is jaw dropping! Once the FTP is signed, and it will be signed, any semblance of farming will disappear in Japan, like the Dodo bird.

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@apple407: Mark these words. It. Will. NOT. Be. SIGNED.

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'The author of the article points to the disproportionate amount of power farmers and special interests groups in Japan wield in government and notes that without political reform, the Japanese economy will continue its slow but gradual decline.'

When will the bad news end for Japan?

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U.S. farming is a huge agribusiness protected by expensive lawyers in Washington

"Protected"? Under NAFTA, nearly all agriculutral products from Mexico and Canada -- both of which are global farming superpowers -- enter the U.S. with no or minimal tariffs. Not quite "protected," is it?

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"Protected"? Under NAFTA, nearly all agriculutral products from Mexico and Canada -- both of which are global farming superpowers -- enter the U.S. with no or minimal tariffs. Not quite "protected," is it?

Geez, you just don't get it. Protected by HUGE HUGE subsidies, and environmental and tax write-offs, and a huge lobby! If Mexico had such a thing, then there still might be farmers in Mexico. Anyhow, I can't wrap my mind around the concept of no more Japanese farmers and rice terraces and rice fields in Japan. What happens to rural Japan with this thing then? Do they just like exit stage left? And then we are FORCED to eat the corn syrupy garbage that is imported? Geez, what a future!

but Jpn is getting near the point where it will literally just be kind of abandoned by the rest of the world, others wont buy Jpns exports & then Jpn wont be able to buy imports & then its back toward fending for itself on these isles, that will be hard to take for the masses here

Come on GW! Really? Other companies will just like say no way and give up on their dependable Hondas and buy a new Chinese car that might or might not work. Really? Like there is so much American exports and penetration into China anyhow? Japan will export and will continue to export its stuff because at the end of the day it is better than the alternative. It has been the normal for how many decades?

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JeffLee at 08:35 AM JST - 4th January. "Protected"? Under NAFTA, nearly all agriculutral products from Mexico

This is partly true. They are protected on both sides. There are over 2 million illegal agricultural workers near the U.S. - Mexico border states, such as California, Arizona and Texas. Due to politics, the immigration enforcement is mostly off limits to farmers who hire illegals. This will continue.

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Mod, why is a poster allowed to use the log in name 'Mushroomcloud' pretty goddamn tasteless IMHO. Is because it is 'funny'?

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300 years on ITS own GW. Forced, FORCED open by the US. Japan will do just fine baby, JUST fine.

OK so you think the Japanese of today will be happy to return to a way of life 100+ yrs ago, no oil, no electricity etc, I cant see yr average Tanaka wanting to do that

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Come on GW! Really? Other companies will just like say no way and give up on their dependable Hondas and buy a new Chinese car that might or might not work. Really? Like there is so much American exports and penetration into China anyhow? Japan will export and will continue to export its stuff because at the end of the day it is better than the alternative. It has been the normal for how many decades?

Rat, do you think the big exporters will stay if Jpn doesnt get involved if this TPP thing takes off?? I prediict if Jpn doesnt get on board many J-companies will find it even harder to stay in Jpn & survive, at the current rate production in Jpn will clearly continue to decline & then its just whether the head offices want to continue to "live" in Jpn so to speak, if push comes to shove I predict many will leave or stay & severely decline.

A perfect example is Sharpe & their LCD screens, Sony just dumped them to source from Taiwan, it was very nieve that Jpn thinks these LCD plants wud remain here forever, THEY ARE JUST PRODUCING COMMODITIES!!! Look for Sharpe to close down or down scale drastically & move more production OUT of Jpn. The car makers will be doing more of this too

There is a lot of crap going on in the world but clearly if Jpn just does what its good at, ie NOTHING, it will lose out big time, but I think many Japanese are already accepting this to an extent, man its incredible the change now compared to when I landed here in the biginning of the 90s!

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No GW, you need to think beyond what you know and think what could be, if Japan has done it, she's capable of doing it again, I hardly see that she'd dismantle the world's most advanced transit system or stop moving into the future with her technological prowess, she'd do it differently, mate, but she could do it. Think a wee bit more than having knee jerks.

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And then we are FORCED to eat the corn syrupy garbage that is imported?

And then Japan can force others to eat Ajinomoto (MSG), instant ramen and other garbage Japan exports.

What happens to rural Japan with this thing then?

More land is freed up for residential use. Japanese people will live in spacious houses with lawns and gardens on former rice paddies.

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Japan will decline, but it'll do it in its own unique way. J-electronics are not what they once were. The fields are much more competitive now; many have surpassed it. Innovations are coming out of the new enterpreneurs of the world like Apple, Google, Samsung, etc.

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More land is freed up for residential use. Japanese people will live in spacious houses with lawns and gardens on former rice paddies.

Too dang funny! Really? With what money? Free trade, if you have a clue, LOWERS salaries, NOT raises them. It does NOT create jobs, but concentrates lower paying ones in the country with the lowest and least environment regulations. Period. And like, even if you use, your concept of spacious lawns, like the city people are going to travel three hours to live in a house in two prefectures away, and commute each day? Really? And like farmers are then unemployed, what are THEY supposed to do. Immigrate to China to work for 30,000 yen a month? Really, you right-wingers live on an ENTIRELY different world than I do. It is just so easy.

The only thing that free trade does is to FORCE people to change due to brutal economics. I rather have some choices. You all make it seem that Japan is so, so doomed if it doesn't adopt this garbage. You want doomed. Look at the ones that have. Ain't no flippin paradises in free trade world. Look at Santo Domingo, Haiti and a lot of countries in South America. Hell holes more like it.

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"Nothing can be done without the will and assent of the people"

Ha ha ha ha ha ha ha ha ha!

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this deal is a big opportunity for both the US and Japan. If Japan farmers can compete globally, they will sell globally and earn more money. More people will want to go into farming if it makes money. japanese consumers won't buy poor tasting products, they will pay for quality made in japan. Reform should happen and Japan farmers shoud not be afraid of foreign competition. They should be excited to expand.

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is deal is a big opportunity for both the US and Japan. If Japan farmers can compete globally, they will sell globally and earn more money. More people will want to go into farming if it makes money. japanese consumers won't buy poor tasting products, they will pay for quality made in japan. Reform should happen and Japan farmers shoud not be afraid of foreign competition. They should be excited to expand.

You right-wingers do not give up! Two points for persistence. Now, HOW can a Japanese farmer on his three or 10 hectacres produce enough vegetables that are dirt cheap enough to cart across the Pacific to other countries. If you have a vast industrial scale size farming plot with HUGE government subsidies, then it is possible. As farming is done now, it is impossible, unless you move entire villages, and level several thousand mountains. This whole point is yet another con in the free trade argument, that all countries can compete equally in all industries and everyone can enrich themselves. Sure can. If so, why are the free trade countires so dirt poor. Why is there no Mexican farming now? Why are Mexicans immigrating illegally to the U.S.? Why is there no more Haitian sugar cane or corn farming? Porter, get a grip!

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Japan was lucky (AFTER losing the war, the U.S. rebuilt them!). What it had to sell was what the world wanted to buy, and so an orgy of exports began, and lasted for decades.

The party is over.

Most countries are approaching global trade more methodically, and learning from how Japan grew so quickly in the decades following WW2. They know their country has to produce/export to stay competitive, and so the days of importing everything from Japan are OVER!

Korea copied the Japanese model, and became a thriving export nation.

China is following in their footsteps.

India will be next.

With all the major economies trying to grow, but keep imports down, just where is Japan going to sell all its stuff? The U.S. economy is tired, imports mostly from China, and really can be of little help in Japan's recovery.

Japan will need reciprocal trade agreements with other nations to survive. If it does not give access to its markets, other countries will quickly block Japanese companies from selling in their markets. This will start happening in 2011.

Japanese cars, tv's, etc. are not THAT great. They can easily be replaced by a competing Korean product.
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