FTA deals deadlocked

FTA deals deadlocked

The Asahi Shimbun, Tokyo

Japan's separate negotiations with Thailand, the Philippines,
Malaysia and South Korea for bilateral free trade agreements
(FTAs) have run into a brick wall. The outlook is particularly
gloomy for talks with the three members of the Association of
Southeast Asian Nations (ASEAN), with the impasse threatening to
doom Japan's effort to strike a deal with the trio by the end of
the year.

Thailand is strongly pressing Japan to scrap its tariffs on
rice, chicken, starch and sugar. But Tokyo has so far rejected
the demand, saying it cannot eliminate tariffs on farm imports.

In a meeting on the FTA held before the bilateral talks,
government officials and industry leaders from both countries
agreed to consider exempting "sensitive" agricultural products
from tariff elimination. Bangkok, however, is adamant, saying an
FTA that won't increase its farm exports is meaningless.

In its talks with Japan, the Philippines are putting the
priority on its request for Tokyo's acceptance of nurses and
nursing care workers from that country. Remittances from
Filipinos working abroad to their relatives at home are important
foreign exchange earners for the Philippines.

Japan, though, has turned down this request, saying that
accepting many foreign nurses and care workers would lower the
levels of medical services and nursing care.

Japan's reluctance to open its doors to farm imports and
foreign workers is not the only block to progress toward FTAs.
The negotiation partners are also hamstrung by their own domestic
concerns.

In the FTA talks, Tokyo has called on these countries to
improve their economic cooperation environments. Main items on
Japan's wish list include clear rules to secure efficiency in
investments such as factory construction and the liberalization
of trade in financial, telecommunications and other services.

While beneficial for Japan, such reforms could hurt these
countries' domestic industries through tougher foreign
competition. Their governments have no choice but to resist such
steps. This is a common dilemma in trade talks between an
industrial and a developing country.

With its economic power far outstripping these trade
partners', however, Japan should now make concessions to push the
negotiations forward. Japan can contribute greatly to long-term
development in East Asia by sharing profits in the region through
FTAs. That would also advance Japan's own interests.

Successful conclusions of Tokyo's FTA negotiations with the
three ASEAN members would lay a solid foundation for market
integration in East Asia involving South Korea and China, too.
Japan should act quickly to avoid falling behind in the region's
FTA race.

For decades, ASEAN and Japan have been linked by an extensive
web of economic, cultural and other ties that bind them through
human interactions and bilateral flows of goods and money. As the
aging of its population will inevitably cause a serious shortage
of workers such as nurses, Japan must make more efforts to
encourage acceptance of immigrant workers.

After he inked an FTA with Mexico last month, Prime Minister
Junichiro Koizumi spoke enthusiastically about the FTA talks with
Japan's trade partners in Asia, acknowledging the need to make
concessions on farm trade. Yet despite Koizumi's explicit words,
his ministers are lukewarm about pushing through such pacts.

Yoshinobu Shimamura, the minister of agriculture, forestry and
fisheries, has voiced skepticism about opening wide the domestic
farm market to imports. Other related ministers, including
Economy, Trade and Industry Minister Shoichi Nakagawa and Foreign
Minister Nobutaka Machimura, have joined the ranks of doubters,
expressing pessimism about closing deals with the trio by the end
of the year.

Foot-dragging by Japan's top policymakers ruled out any
breakthrough in the FTA talks during last week's Asia-Europe
Meeting, which brought together Asian and European leaders in
Hanoi.

However, there will be further diplomatic opportunities to
accelerate the negotiations, including the scheduled ASEAN Plus
Three (Japan, China and South Korea) summit in Laos in November.
The onus is now on Koizumi to make a bold decision that is in
Japan's long-term national interests.