politics

LDP members oppose putting 'everything on the table' at TPP talks

27 Comments

Members of the main opposition Liberal Democratic Party this week expressed their reservations about the conditions of Japan's entry in the Trans-Pacific Partnership (TPP) free trade agreement, criticizing Prime Minister Yoshihiko Noda's stance that all goods and services will be put on the negotiating table.

The LDP wants agriculture (rice), insurance and the automotive sectors exempt from the negotiations.

The TPP, which involves nine countries, is a controversial issue for Prime Minister Yoshihiko Noda who has indicated that he would like to see Japan join the free trade framework. But he has been criticized by opponents within his own party as well as opposition parties for his vague statements on the issue.

The U.S., Australia, Malaysia, Vietnam and Peru are currently negotiating to join the bloc, which already brings together the smaller economies of Chile, New Zealand, Brunei and Singapore.

In February, the Japanese government held TPP talks with Singapore, Malaysia, Australia and New Zealand.

During talks with Washington on Feb 7, U.S. officials said they would not back Japan's participation in the talks unless Tokyo agrees to discuss tariff cuts on politically sensitive items.

Big exporters say that joining the trade bloc would allow Japan greater access to foreign markets, which would allay concerns that Japan is falling behind regional rivals such as South Korea in trade liberalization.

However, the LDP and some members of the ruling Democratic Party of Japan (DPJ) oppose opening the agricultural sector up to foreign competition. Agricultural products are protected by tariffs as high as 800%. Rice is the most contentious issue for Japan.

LDP members said this week that the agreement would devastate rice farmers. They also said that the trade pact would benefit corporations rather than ordinary people and have voiced fears that pharmaceutical companies could force up subsidized prices for medicine.

Proponents of the TPP argue it could be the much needed cue to reforming the agricultural sector that benefits from generous subsidies and protectionism.

Domestically produced rice is held to be far superior to foreign-grown grain. A poll last November by the Yomiuri Shimbun showed 89% of respondents claimed they would continue to buy Japanese rice, even if vastly cheaper imports were available.

Many rice growers are already suffering in the wake of the Fukushima nuclear disaster. "The TPP (issue) has come when more and more farmers are giving up their fields in Fukushima because of the nuclear accident," said a 57-year-old rice grower in Nihonmatsu, central Fukushima. "We are facing dual hardship."

While farmers are undoubtedly suffering, they still have powerful friends in powerful places.

The Central Union of Agricultural Cooperatives brokers rice distribution, provides financial support, spearheads pro-farming campaigns and lobbies politicians and bureaucrats.

Farmers have also formed lobbying groups to provide financial support for pro-farming lawmakers, and were key to sustaining the more than half-century of almost unbroken rule by the conservative LDP.

If rice is included in the free trade agreement, the enormous tariffs these farmer-friendly politicians put in place would have to go.

"If the TPP is introduced, Japanese rice would be defeated by foreign rice. There is no doubt about it," said Takashi Ogino, an analyst at Fukoku Mutual Life Insurance in Tokyo.

But Hideki Shimazaki, CEO of Top River, a firm that helps young farmers who want to establish large-scale operations, says there is no way to keep everybody happy.

"We can't avoid certain sacrifices in exchange for something more important," said Shimazaki, whose company seeks to introduce corporate-style management to old-fashioned Japanese farming.

"Conventional ideas of treating everybody equally do not work. We should lose the battle to win the war," he said.

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"If the TPP is introduced, Japanese rice would be defeated by foreign rice. There is no doubt about it," said Takashi Ogino, an analyst at Fukoku Mutual Life Insurance in Tokyo.

Yes but

Domestically produced rice is held to be far superior to foreign-grown grain. A poll last November by the Yomiuri Shimbun showed 89% of respondents claimed they would continue to buy Japanese rice, even if vastly cheaper imports were available.

So which is it?

I like rice but I don't know much about the differences between different types of rice.

Would 89% of the respondents be able to tell the difference between foreign-grown rice and Japanese-grown rice (same type obviously) if it was prepared and served in exactly the same way?

2 ( +3 / -1 )

I think that it would do Japan the world of good to be excluded from the TPP talks. A bit of reality in the 21st Century is what Japan needs.

The Japanese still have an incredible belief in their own importance, bordering on a national narcissistic illness. People are bashing down the doors to come and live in this heaven on earth and thus the very restrictive immigration policy, and Japan is still the centre of the Asian economic universe.

Refusal to be included in the TPP talks might be just the medicine Japan needs and might bring home to the Japanese that this is not 1985 but 2012 and in the intervening years Japan has been left on the sidelines.

I just got back from a business trip around Asia and the place is dynamic and exciting. Bangkok is not recognisable to the place it was 10 years ago. Singapore has always been up there, Kuala Lumpar and Jakarta are internationalizing at such a rapid pace that you can feel the excitement of what the future will offer.

Asia is buzzing. That is, Asia is buzzing, except for Japan.

Fair enough for those in the LDP and on here who want to keep Japan as a sleepy backwater with its novelty value, but the LDP have to understand that you can't eat your economic cake and have it, and it they want to keep spending like an economic superpower, with their grand projects, they have to earn the revenue of an economic superpower, through tax revenue from companies. Under the present Japanese economic model, selective FTA's with countries that don't pose a threat to Japanese agricultural interests and WTO guidelines (rather than FTAs), the economic cake is only going to get smaller as the economic hunger of an aging population gets hungrier.

The raelly frightening part of all this is that very few Japanese would dispute what I've wriiten above, yet still would be against the TPP.

2 ( +5 / -3 )

If people prefer domestic rice, let the foreign rice in. It can sit on the shelves while people buy the regular stuff they prefer.

2 ( +2 / -0 )

oginomeMAR. 09, 2012 - 10:30AM JST Japan's population is fiercely nationalistic so I'd wager that the vast majority would continue to buy Japanese rice even if cheaper alternatives were brought in. So many companies have failed setting up and lasting in Japan, companies which have been huge success elsewhere, because the Japanese consider all non-Japanese goods, with the exception of German and some Italian goods, to be of markedly inferior quality.

Perhaps. But, would they really be able to tell the difference?

Suppose you take two identical bags and label one of the bags "Japanese-grown rice" and the other one labeled "foreign-grown rice". Suppose you then put actual foreign-grown rice in the bag labeled Japanese-grown and vice versa. Suppose the bag labeled Japanese-grown rice is priced to be twice as expensive as the one labeled foreign-grown.

Would 89% of the respondents buy the "Japanese-grown rice"? Would those that did be able to tell that the rice was actually foreign-grown?

1 ( +2 / -1 )

If the LDP oppose putting everything on the table they should not expect to join the TPP talks, since that is a prerequisite. It's better to say this now, and stay out of the TPP, rather than take the DPJ approach of promising to "discuss" reducing tariffs when they have no intention doing so.

1 ( +1 / -0 )

A Japanese friend of mine runs a dairy. He's looking forward to adoption of the TPP: Japan is too far away from North America for fresh dairy imports close enough to Asia for exports. I've been helping him translate his company materials.

My mid-sized town of Kumamoto has grown significantly since my arrival two decades ago due to high tech, but the surrounding countryside hasn't changed a smidgen. While farmers are understandably conservative by nature the world over, most of these people are implacable hidebound. Likely the only way to induce change is a shock to the system. Without that, Japan could find itself in the worst of both worlds: shut out from the high-tech markets it excels in and stuck with an agricultural sector of dismal productivity and declining share.

1 ( +1 / -0 )

The rice here is named japonicas, and it is the same short-grained rice as is grown by more efficient means everywhere else in the world. Te same willl happen here as in Korea. People will switch to cheaper wheat products. Japanese are afraid of competing in anything because they do not kow how to innovate. The average population suffers, but who cares as long as the idiots in government still rule this sinking ship, it will never change. Buy your overpriced rice, dummies.

1 ( +2 / -1 )

Would 89% of the respondents be able to tell the difference between foreign-grown rice and Japanese-grown rice (same type obviously) if it was prepared and served in exactly the same way?

Japan's population is fiercely nationalistic so I'd wager that the vast majority would continue to buy Japanese rice even if cheaper alternatives were brought in. So many companies have failed setting up and lasting in Japan, companies which have been huge success elsewhere, because the Japanese consider all non-Japanese goods, with the exception of German and some Italian goods, to be of markedly inferior quality.

0 ( +2 / -2 )

Perhaps. But, would they really be able to tell the difference?

Suppose you take two identical bags and label one of the bags "Japanese-grown rice" and the other one labeled "foreign-grown rice". Suppose you then put actual foreign-grown rice in the bag labeled Japanese-grown and vice versa. Suppose the bag labeled Japanese-grown rice is priced to be twice as expensive as the one labeled foreign-grown.

Would 89% of the respondents buy the "Japanese-grown rice"? Would those that did be able to tell that the rice was actually foreign-grown?

But the thing is, the Japanese would continue to buy the Japanese grown rice even if the foreign rice tasted exactly the same. Their belief in the superiority of 'Made-in-Japan' transcends what the actual product is like. It's almost like a sacred duty as a Japanese person to keep buying the Japanese rice.

0 ( +2 / -2 )

But the thing is, the Japanese would continue to buy the Japanese grown rice even if the foreign rice tasted exactly the same. Their belief in the superiority of 'Made-in-Japan' transcends what the actual product is like. It's almost like a sacred duty as a Japanese person to keep buying the Japanese rice.

Perhaps, but....

Would they be able to tell the difference if I put foreign-grown rice in a bag labeled Japanese-grown rice and vice versa? Is the difference that pronounced?

0 ( +1 / -1 )

Would they be able to tell the difference if I put foreign-grown rice in a bag labeled Japanese-grown rice and vice versa? Is the difference that pronounced?

No, they probably wouldn't be able to tell the difference if a similar type of grain was thrown in, but this won't happen even if the TPP gets its way. Japanese rice will be sold separately and the populace will deliberately forsake the 'barbarian' rice, just like how so many foreign companies ended up pulling out of Japan even though they offered similar or lower prices for the same kind of goods that Japanese companies sold. Japan is extremely protectionist. Even if all the tariffs and restrictions were lifted, the biggest obstacle for foreign companies would continue to be the Japanese citizens themselves. Japan suffered a rice shortage in 1993 or 1994 and had to import foreign rice. Most of it was left untouched.

0 ( +2 / -2 )

The foreign rice won't sit on the shelves, me and my mates will buy it!

0 ( +1 / -1 )

If the LDP oppose putting everything on the table they should not expect to join the TPP talks, since that is a prerequisite.

So true. The other members wouldn't accept that prerequisite.

The whole point of joining the TPP is to improve things. Molly coddling the agriculture sector won't do that. They need to reform the agriculture sector.

0 ( +0 / -0 )

Should be no barriers or protectionism. If you can't compete in a real market then move aside.

0 ( +0 / -0 )

Oppose putting everything on the table...fine..then just watch Japan "being opposed" to join the TPP talks and resume its slow slide into obscurity all the while wondering why its being overtaken by South Korea and others... As Dog says , Asia is buzzing and on the move...with Japan being pretty much the only exception..

0 ( +1 / -1 )

bajhista, you do understand that America made Japan the success it was by offering it preferred status for many years so that American companies had a gullible 100,000,000 strong marketing opportunity? Japanese companies are not the best anymore. And Japanese rice is no better than Calrose. You do not understand genetics. Calrose is the exact same product. Genetics determines the contents of a plant. Proper farming techniques provide efficiency.

0 ( +0 / -0 )

Cricky, the world market for purikura is on the edge of a massive explosion!

0 ( +0 / -0 )

Japan's population is fiercely nationalistic so I'd wager that the vast majority would continue to buy Japanese rice even if cheaper alternatives were brought in. So many companies have failed setting up and lasting in Japan, companies which have been huge success elsewhere, because the Japanese consider all non-Japanese goods, with the exception of German and some Italian goods, to be of markedly inferior quality.

@oginome: I somehow agree with you, but it only goes to a certain point. Look at how Japanese electronics makers felt safe for the same reason until the iThingies swept the market. I suppose it will be similar when it comes to rice, due to the huge cost difference. People claim many things when they are asked in opinion polls, because it doesn't cost them anything. But when they go to the shops, they change mind quickly.

What I wonder is why the LDP wants to exclude the automotive sector. What exactly do they fear?

0 ( +0 / -0 )

I somehow agree with you, but it only goes to a certain point. Look at how Japanese electronics makers felt safe for the same reason until the iThingies swept the market. I suppose it will be similar when it comes to rice, due to the huge cost difference. People claim many things when they are asked in opinion polls, because it doesn't cost them anything. But when they go to the shops, they change mind quickly.

The iThinigies (I hate them, except for iPod) are dependant hugely on Japanese engineering, the more they sell, the more money Japanese companies make

Apple's iPhones are made in China, at a plant owned by Taiwanese company Foxconn Electronics in Shenzen, Guangdong Province. It costs around US$179 to produce a single iPhone, but Foxconn makes just $6.50. Most of the money goes to Japanese, German, Korean and U.S. companies that produce the components and materials used in the iPhone. And Japanese businesses make the highest profit of $60.

http://english.chosun.com/site/data/html_dir/2011/03/21/2011032101119.html

I think letting in those iThingies into Japan was a deliberate decision.

0 ( +0 / -0 )

Apple's iPhones are made in China, at a plant owned by Taiwanese company Foxconn Electronics in Shenzen, Guangdong Province. It costs around US$179 to produce a single iPhone, but Foxconn makes just $6.50. Most of the money goes to Japanese, German, Korean and U.S. companies that produce the components and materials used in the iPhone. And Japanese businesses make the highest profit of $60.

Now what are Apple's profits on each iPhone? That is the loss for Japanese makers, because for previous product generations it were companies like Sony, Panasonic etc who could reap them.

I think letting in those iThingies into Japan was a deliberate decision.

It was not a decision. It is how the Japanese market works. First people refuse to buy foreign products for various reasons (a strong one being ignorance) but once a product manages to succeed there is nothing to stop the dam break. It won't take long until we will see similar things with e.g. consumer electronics or cars from Korea. It doesn't mean the Japanese makers are doomed, but they will have to face a hard phase of adaptation in the coming years.

0 ( +0 / -0 )

Now what are Apple's profits on each iPhone? That is the loss for Japanese makers, because for previous product generations it were companies like Sony, Panasonic etc who could reap them.

But Japan now monopolises producer goods which it didn't when Sony was making its Walkman.

It was not a decision. It is how the Japanese market works. First people refuse to buy foreign products for various reasons (a strong one being ignorance) but once a product manages to succeed there is nothing to stop the dam break. It won't take long until we will see similar things with e.g. consumer electronics or cars from Korea. It doesn't mean the Japanese makers are doomed, but they will have to face a hard phase of adaptation in the coming years.

No, because Japan still refuses to buy the Samsung Galaxy even though it is basically the same as the iPhone (as we can see from the plagiarism lawsuits), because of the assumption that Korean products are somehow 'inferior'. Cars from Korea won't sell in Japan, Japan remains notoriously protectionist in both its laws and the buying habits of its citizens.

0 ( +0 / -0 )

Refusal to be included in the TPP talks might be just the medicine Japan needs and might bring home to the Japanese that this is not 1985 but 2012 and in the intervening years Japan has been left on the sidelines.

I promise you that the exact opposite would happen. The isolationists would slap themselves on the back for a job well done and trumpet in the media that this was "the best possible outcome for Japan" because Japan wouldn't have to be further exposed to nasty imports. Then they'd call for more tariffs and quotas to "spur Japanese industrial production by protecting local markets".

It is very important for Japan to join the TPP. It will drive competition and the liberalisation of Japan's markets. Being isolated from it will lead to all the gradual reform of the past decade or so being undone.

0 ( +0 / -0 )

Hello from EU I think that this tread union is nor in intrese of Japan ether for its good you know how well gain from that it well be large corporations how well stand rich from that its mens that this corporations well bee tucking Japan economic from Japanese nation end pas it over tu wealthy elite on wollstrete the in the end the won't own everyone the earth it self

0 ( +0 / -0 )

So it's OK to talk, just not about rice, insurance and automotive sectors? What is left? Obviously they would rather be excluded from any benefits due to the national cost of having goods competing with foreign industry. Again the system retards the future of Japan.

-1 ( +0 / -1 )

The foreign rice won't sit on the shelves, me and my mates will buy it!

That's nice, but you and your mates make up a miniscule part proportion of Japan's population.

-2 ( +2 / -4 )

@ Oginome....Japanese thinks made in japan products are best?????? I do agree. From electronics, cars, high tech to name a few. Farm produce, are best if not superior. Japan will not be the former 2nd in world economy if their export products are inferior.

-2 ( +1 / -3 )

It's a NO NO for Japan to join TPP. RICE???? Japan produced rice is the best rice I have tasted compared to foreign produce. Watch out JGovt. This is another trap by western countries for their own benifit. Remember Trade Globalization? They dicatated on what a country can export with strict requirements and standards. Tsk..tsk..tsk.. some poor countries just ended exporting bananas. Oppositions or not, Japan can stand on their own. It has been proven so to hell with TPP. Don't listen to those lobbyist and advicers controlled by the westerners. Remove TPP from your agenda and attend to people affected by the recent disaster in Fukushima.

-4 ( +0 / -4 )

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