Japan, U.S. trade talks fail to close gap over TPP

TPP will not happen with Japan. It looks like they focus more now on reaching free trade agreements with AUS (already done), the EU and maybe Korea and China. After I read more about the TPP I believe this would be a much better deal for Japan and its people.

I agree with you, Andreas.

Japan doesn't need TPP. It can do better with individual free trade agreements with its neighbors and Europe.

Perhaps they need to take a step back and re-write the TPP, consider the needs of BOTH sides and write an agreement to secure benefits for both sides rather than waste time trying to push boulders, so to speak. At this point its more of a waste to "talk" and try to persuade either side into an agreement that clearly wont work.

I agree with you both, Andreas and MGigante.

Japan doesn't need TPP.

Japan needs trade agreements with its neighbours, South Korea, Indonesia, Thailand, Taiwan, China.

It also needs a trade agreement that isn't shrouded in secrecy like TPP.

BertieWooster

You're 100% right, its incredibly unreal that even among fellow Government officials the Office of the United States Trade Representative is keeping so much of the TPP under lock and key. With something this big not only does the whole of each government need to know what the TPP actually entails but MOST importantly the people who will be affected, i.e the general populace.

Washington and many of the other parties to the talks—which also involve Chile, Mexico, Canada and several Asian countries—say Japan’s unwillingness to open its lucrative agricultural market is a deal-breaker.

Everyone predicted this months ago when Japan joined the talks. Japan still does not get that it is not the dominant player in Asia that it once was, especially with its current economic woes.

BertieWooster

You're 100% right,

Actually, he isn't. The amount of trade that Japan gets from SK, Indoneisa, Thailand, and Taiwan are a fraction of what they do with the TPP countries. And doing a trade deal with China is highly unlikely given the political climate.

With something this big not only does the whole of each government need to know what the TPP actually entails but MOST importantly the people who will be affected, i.e the general populace

Abhorsenaube -- please explain how the 97% of the Japanese population that has nothing at all to do with agriculture would not benefit from paying much less for rice, beef, fruit, etc. Given that Japan is so dependent on imports for much of its food, it would seem logical that anything the government can do to lower those costs would help the "general populace" rather than harm it. Or is paying 7 times the world price for rice a good thing for their budgets.

SK is praying the talks fail, it will make those Korean cars TVs, smartphones that much more cheaper than the Japanese items. failing to have any FTA with the US will just help the SK and Chinese leap ahead further. but hey if Japan wants to so desperately protect the Agriculture industry that makes up less than 1% the economy for the sake of the greater 99% then go ahead and dont complain when made in Japan will be just a faded memory.

Question : If Japan gets less tariffs and more access to US markets and US cars and agricultural products are so inferior, why doesn't Japan jump on an agreement?

please explain how the 97% of the Japanese population that has nothing at all to do with agriculture would not benefit from paying much less for rice, beef, fruit, etc.>

Well, there is a major worry that TPP would literally destroy the National Health Care system by: a) allowing foreign insurance companies and for-profit hospitals to open up in Japan, b) putting extra costs onto insurance premiums by adhering to TPP's draconian patent laws which would allow corporations to infinitely renew patents on drugs AND surgical procedures.

Losing national healthcare would be one of the worst things to happen to Japanese society and TPP has the potential to destroy the system. That's pretty relevant for 100% of the population.

Also, investor-state dispute settlement clause would allow corporations to sue the government over a multitude of issues. It, in a way, ties the government's hands if it wanted to regulate something that a foreign company felt could affect their sales.

That said, no one really know the truth because TPP is shrouded in mystery.

jerseyboy Apr. 11, 2014 - 08:56AM JST please explain how the 97% of the Japanese population that has nothing at all to do with agriculture would not benefit from paying much less for rice, beef, fruit, etc. Given that Japan is so dependent on imports for much of its food, it would seem logical that anything the government can do to lower those costs would help the "general populace" rather than harm it. Or is paying 7 times the world price for rice a good thing for their budgets.

I am not sure if the criticism of Japan is warranted for not importing enough agricutlural products. Japan already imports 60 percent of its food supply and food safety is a sensitive issue. In less than five years, goverment farm subsidies will be eliminated. By comparison, the U.S. imports about a tenth of its food supply and tests less than 1 percent of shipments. Sales of Chinese-grown produce are a tenth of what they were just five years ago, as consumers do not mind more expensive Japanese products. Sure, Japan could import cheaper California rice, but what about rural farmers in Japan that will no longer get goverment farm subsidies and they cannot survive. Then what? The J-goverment has to maintain a balance of future agricultral growth in their own country first.

what about rural farmers in Japan that will no longer get goverment farm subsidies and they cannot survive.

I guess they'll have to start running their farms in an efficient manner, i.e. not havaing 75% of farms being a 10 square meter patch of land cultivated by a 90-year old whose back is firmly fixed at a 90 degree angle.

@Reckless And to Australia hooting, wait til there is any hint of any disease in your herds and Japan will bar all beef imports and the main reason why Australia hasnt had very little outbreaks of diseases is 1. there quaranteen is one of the strictest in the world. 2. they dont feed there cattle, powdered protein from dead cows no madcow disease. 3. the cattle stations are very far apart so when there is and outbreak it a lot easier to contain it to one place before it spreads. unlike Japan. 4. they have a very strong PR campaign against false outbreak reporting/claims by third parties. also of note NZ has a very similar system to the Australian one. which is why Aussie/NZ agriculture products are the safest in the world. yes no madcow, birdflue, pigflue, foot in mouth, radiation exposure, food mislabeling.

TPP will not happen with Japan. It looks like they focus more now on reaching free trade agreements with AUS (already done), the EU and maybe Korea and China. After I read more about the TPP I believe this would be a much better deal for Japan and its people.

I agree that TPP will not happen with Japan. The deal with Australia was good because Japan got zero tariffs on Japanese cars, and Australia will be charged "only" a 29% tax on it's beef. So, like in every previous agreement, Japan walked away with what it wanted, the Australians got shafted, and the Japanese consumers get a fourth arrow up the backside, as no reduction in tariffs is ever passed on to Japanese consumers. For Japan, "free trade" means zero tariffs on Japanese goods, and allows the Japanese to charge high tariffs, or emplace non-tariff barriers on foreign goods

TPP will not happen because non-tariff barriers in Japan would have to be dismantled, and price-fixing is the main non-tariff barrier which drives up the price of imports (and even domestic goods) in Japan. Price-fixing is an old cultural practice in Japan which is technically illegal, but is never prosecuted or punished. Price-fixing is one of the main culprits behind the decline of the domestic economy, it has driven up the cost of all goods in Japan, making it more difficult for people to make ends meet, or to afford to have children, it has allowed Japanese companies to continue operating inefficiently, and it has doscouraged growth by making it harder for people to start new companies. Price-fixing is unpunished because of the close ties industry has with the permanent bureaucracy, and these are too powerful to be controlled by Japan's elected politicians, or the Japanese themselves.

TPP will not happen because it would wrest power away from the 1% of Japanese who are farmers, and the powerful JA bureuacracy which can make or break politicians because the voting formula in Japan gives more power to rural voters, while taking power away from urban voters.

No country in the TPP talks needs TPP as much as Japan. TPP is probably the only hope Japan has of getting out of it's old and corrupt system, and this is the main reason why Japan will not become a part of the treaty.

This is just theatre, eventually Japan will get into TPP because both Japan and the US' China hedging strategy depends on it.

Japan's farmers already know that, eventually, they will be thrown under the bus. JA cooperatives have been busy trying to market their products abroad as high end produce. Farmers are also part of the group pushing for guest workers, deregulation to increase the size of agricultural plots, as well as being ready for the end of subsidies designed to decrease the acreage planted to rice. A little delay with the TPP actually benefits Japan so the above policies have more time to work.

In addition, gaiatsu has traditionally been the most mercenary way the government pushes unpalatable reforms. In terms of political optics, Abe wants it to look like he fought for the farmers till the very end, but gaiatsu was just too much so Japan eventually gave in.

Japan doesn't need TPP. It can do better with individual free trade agreements with its neighbors and Europe.

If Japan could make individual free trade agreements with it's neigjbors and Europe, it would have done so already. Neither Japan's neigjbors nor Europe trust Japan enough to make any new agreements, as Japan has gotten around old agreements by erecting non-tariff barriers to raise the prices of goods.

Take a close look at the "free trade" deal which Japan just made with Australia. Japan gets zero tariffs on Japanese cars immediately, Austrailan exports get tariffs reduced to only 20% to 23% over a 15 year period. I doubt Japan's neighbors or Europe will see this as a very good deal, and after the Japanese beef importers jack up the price to offset the reduction in tariffs, the Japanese consumers will not see it as a good deal either. And since the retail price will likely remain unchanged, Australia will probably not see any increase in it's beef exports to Japan. Japan gets everything in the deal, Australia gets nothing.

Japan's neighbors who are involved in TPP didn't want Japan involved in the treaty, and for good reason.

View from Okinawa:

Abe seems to be instructing Amari to be tough on TPP negotiations with the U.S. But Tokyo's recalcitrant attitude toward the TPP issue will certainly be countermanded by its conciliatory mesaures given to the Futenma issue. In other words, in order to please Washington, Tokyo would be hell-bent on building a new base at Henoko, Nago, for the U.S. Marines as Washington desires.

So we must be on our guard constantly not only for TPP but also for Futenma.

Japan joining the TPP is a double edged sword for the country. On one edge, the consumers will benefit from cheaper imports and, in some cases, a greater variety of products. On the other edge, Japan will have to let go of its practice of subsidizing rice farmers and limiting rice stocks to keep the price high, which will create unemployment. However, Japan desperately needs unrestricted international trade to rebuild its economy. The fact is, there is no money in Japan and it is only due to bolstering of the economy by banks that Japan has survived and not followed Spain in an economic disaster. These stone-faced cronies have to let go of their right-wing mentality and open up Japan for free trade and they have to do it soon or Japan will get left behind and end up just like Spain. Flat broke!!!

I agree with sangetsu03. Price fixing is such an established business practise here. Japanese consumers should be screaming about it, but it doesn`t happen.

Well, there is a major worry that TPP would literally destroy the National Health Care system by: a) allowing foreign insurance companies and for-profit hospitals to open up in Japan, b) putting extra costs onto insurance premiums by adhering to TPP's draconian patent laws which would allow corporations to infinitely renew patents on drugs AND surgical procedures.

Mgigante -- huh? How do you posssibly conclude that allowing "allowing foreign insurance companies and for-profit hospitals to open up in Japan" would "destroy the National Health Care system"? It sounds like what you are saying is that the only way for Japanese insurance companies and hospitals to survive is by being protected, and allowed to charge sky-high prices because they are so inefficient by world-class standards. If so then, I understand why you love Japan and its socialist economy and don't want to change it. Which is why the actual disposable income of Japanese families is so pitiful.

And sfjp330 we just clearly subscribe to different economic and social models:

I am not sure if the criticism of Japan is warranted for not importing enough agricutlural products. Japan already imports 60 percent of its food supply and food safety is a sensitive issue. In less than five years, goverment farm subsidies will be eliminated. By comparison, the U.S. imports about a tenth of its food supply and tests less than 1 percent of shipments. Sales of Chinese-grown produce are a tenth of what they were just five years ago, as consumers do not mind more expensive Japanese products. Sure, Japan could import cheaper California rice, but what about rural farmers in Japan that will no longer get goverment farm subsidies and they cannot survive. Then what? The J-goverment has to maintain a balance of future agricultral growth in their own country first.

I subscribe to the theory that resources/capital should flow to the company or country that is the most efficient in producing a good or service. You are more socialist in your view, that it is OK for consumers to pay crazy prices for things because that helps support some kind of social or cultural order. And if you want to pay 8 times the world price for rice so a bunch of old, inefficient rice farmers are not forced to join the 21st century, so be it. But just remember, the Koreans were faced with the same issue, and they managed to find a solution. How come Japan can't?

And your statement that "putting extra costs onto insurance premiums by adhering to TPP's draconian patent laws which would allow corporations to infinitely renew patents on drugs AND surgical procedures." is equally as suspect as drug prices in Japan are already among the highest in the world, because of the ridiculous testing methods that are required.

Japan will never give into US demands. Too many concession. If anything, Japanese corps will try to lobby, US politicians to weaken their TPP stance through campaign contributions. TPP won't get anywhere this year, but that may change in a year or two.

I guess Japan just wasn't gonna sign up and bend over.

Tokyo was hoping that a free trade agreement agreed with Canberra this week, which will see tariffs on Australian beef slashed, would help bounce Washington into compromises, but U.S. diplomats appear to have stood firm.

Free trade agreement should be zero tariff without any bias for import and export. If there is still have some tariffs, it should be called as freer trade agreement. However Aussie farm industry still have to pay some tariff for their beef export. The biggest loser is Aussie dairy producers who still have to pay the same old rate of 29.5% tarriff.

Japan gets zero tariffs on Japanese cars immediately, Austrailan exports get tariffs reduced to only 20% to 23% over a 15 year period.

Some farmers may be no longer alive when Aussie export gets less tariffs in the future. It is such a joke for Canbarra for singing unfair trade agreement for narrow political agenda. Japan needs Australian gas, food and commodity like thristy man needed water. It is not the other way around for Aussie for buying Japanese cars, cameras and TVs. Therefore Washiton needs to stand firm for getting better and fairer deal with Japan unlike weak Canberra. Washington is not Canberra.

I guess Japan just wasn't gonna sign up and bend over.

Who is really getting bent over? Hasn't the Japanese consumer been bent over hard for the past five decades? Actual tariffs of 30% to 800% are paid for by the average Japanese, non-tariff barriers affect prices a like amount, and must also be paid by the Japanese consumers. Having to pay sky-high costs for everything from food to clothing has left the average Japanese with little other money to get by.

Japan rates near the bottom of developed countries in disposable income, which is money left over after paying for normal housing and living expenses.

Japan was not invited to TPP, Japan invited itself, if being part of the treaty requires bending over, Japan should drop it's pants right now. If not, they can get out, they won't be missed.

Why doesn't the US kick Japan out of TPP? It seems that Japan is not important for TPP and probably would give it up sooner or later.

Japan and other countries needs a fair and equal free trade agreement, not TPP. The only people salivating over the TPP are the US corporations.

Could someone explain to me why Japan hasn't been kicked out yet? From my understanding everyone else has pretty much come to terms and agreements and Japan is the only country really holding everything up. Why bother? If Japan wants to waste time and disagree, get rid of them.

The US was not negotiating. The US was DEMANDING. They demanded that all terriffs be removed from beef and demanded that polution standards (which Japanese manufacturers have to follow too) be reduced so poisonous US cars can be sold here. US just DEMANDS. US does not understand NEGOTIATE. DOWN WITH TPP!!!

The US was not negotiating. The US was DEMANDING. They demanded that all terriffs be removed from beef and demanded that polution standards (which Japanese manufacturers have to follow too) be reduced so poisonous US cars can be sold here. US just DEMANDS. US does not understand NEGOTIATE. DOWN WITH TPP!!!

Sorry champ, cars made in the American market, and Japanese cars sold in America have far higher emissions ans safety standards than domestic Japanese cars. The average Japanese car sold in America is many kilograms heavier than a do estic Japanese car due to the weight of the extra emissions equipment, and safety reinforcements. That is why any currently produced in America can be sold in Japan with no modification, but Japanese domestic market cars may not be sold in America.

The US is demanding tariffs and non-tariff barriers because Japan has a long record of making their own demands, and giving absolutely nothing in return. Obama wants Japan in TPP, America does not. Most of the other member nations are agreed on zero tariffs on all goods. Japan knew this when they joined the talks, if Japan cannot agree on zero tariffs, it needs to leave right now and stop wasting everyone else's time.

It's amazing how people still think that TPP will benefit anyone other than the corporations.

No surprise here. Said before, best to kick Japan out of the TPP talk. No way Japan will do away with the agricultural subsidy. The Farm Lobby has the politicians by the short hair.

jerseyboy Apr. 11, 2014 - 11:30AM JST And if you want to pay 8 times the world price for rice so a bunch of old, inefficient rice farmers are not forced to join the 21st century, so be it.

How did you get bogus 8 times the world prices? In Japan, 10kg of rice is around Y3,000 to Y4,000 yen. This is around $30 to $40 U.S. In the U.S., Calrose for 20lb (less than 10kg) cost $17.00 (around $20.00 for 10kg). So the actual U.S. prices is about half of Japan's price.

sangetsu, then why is US demanding lowering polution standards for US cars in Japan, if the standards are so strict in US? And US does have cars that satisfy Japanese standards because they sell cars here (with NO tarriff). At least I assume Ford and Crystler dealerships here in Japan are selling Ford and Crystler vehicles (I've never seen a GM dealership).

Japan was not invited to TPP, Japan invited itself, if being part of the treaty requires bending over, Japan should drop it's pants right now. If not, they can get out, they won't be missed. sangetsu03

Good, so US should stay away with this agreement.

If you factor in transportation cost, Cal.rice would only be about75% cheaper compared to Japanese rice if sfjp330 pricing is right.

sangetsu03

Source please since they both use the same Three-Way Catalytic converters.

Here is Japan's premitted output limit on small cars with GB being the newest.

http://www.mlit.go.jp/common/000019635.pdf