(Nikkei: November 13, 2015 – p. 33)
By Akira Amari, minister for economic and fiscal policy and economic revitalization
The Trans-Pacific Partnership (TPP) ministerial meeting in Atlanta ended successfully and a basic agreement was reached in the negotiations. An economic sphere made up of 800 million people and nearly 40% of the world economy will now be formed. This signifies the dawn of a new Asia-Pacific century.
Since participating in the TPP talks in July 2013, Japan had engaged in very tough negotiations at plenary sessions and in Japan-U.S. and other bilateral talks with its national interest at stake.
At the first ministerial meeting after Japan joined the talks, I asserted that “the ideals of the TPP cannot be achieved if any one country seeks to impose its system.” This was supported by many ministers. As a result, the principle of negotiating for a balanced agreement was added to the negotiations. Japan’s strong aspiration to grow with the Asia-Pacific nations won the understanding of the other participants. I think this became a driving force in the TPP talks.
The final phase of the negotiations was the toughest. The ministerial meeting in Atlanta was extended several times, with meetings continuing through the night day after day. Coordination among the participating nations was finally completed at 4:30 a.m. on the last day, or 2.5 hours before the final session was to be held. I had less than one hour between the news conference announcing the basic agreement and my return flight. It was truly a last minute deal.
The TPP is a framework that promises a prosperous future for Japan and the Asia-Pacific region as a whole. In addition to tariffs, new trade and investment rules were made for the 21st Century in broad-ranging areas, including the services, investment, intellectual property, and state-owned enterprises. An economic sphere where people, goods, capital, and information flow freely will be created in Asia and the Pacific. Many other countries have queued up to join the TPP, which is expected to expand from now on.
Participation in an open framework like the TPP will enhance Japan’s reputation among foreign investors. These investors will also be interested in regions with potential, so the TPP will also help revitalize the regions. The deepening of economic interdependence among nations sharing the universal values of freedom, democracy, and basic human rights will also contribute to regional stability.
In sectors Japan intends to take the offensive, tariffs on 99.9% of industrial products, including autos and auto parts and industrial machinery, will be eliminated. Japan will be able to export over 90% of its products without tariff to certain countries on the very day the TPP accord takes effect.
Improvement of market access will not be limited to goods. We were also able to achieve a high level of liberalization in the services and investment. Vietnam and Malaysia will ease their regulations on foreign capital and opening new shops in the retail industry. This will come as a boost for overseas ventures by Japan’s highly competitive convenience store chains. The liberalization of the government procurement market, such as infrastructure, will greatly enhance business opportunities for Japanese companies.
The making of investment rules will further invigorate investments from Japan, which is an exporter of capital. The ISDS (investor-state dispute settlement) provisions (on litigation against the government when a foreign investor is treated unfairly) will be very effective in protecting Japanese companies investing overseas. Provisions to prevent a proliferation of corporate court cases were also included to address such concerns.
Many had voiced concerns on sectors Japan would like to protect. We persisted in tenacious negotiations on the five sensitive agricultural sectors (such as rice and wheat).
My job was to stand firm on Japan’s position while also working for an agreement in the TPP negotiations. It would have been easy to quash the talks but there could be no negotiation if the other party’s conditions were simply rejected. In the end, we were able to obtain exemption from tariff abolition for many products and institute tariff quotas and safeguard measures for the five sensitivities and other products. I belief we achieved the best results.
The government as a whole will now compile domestic measures to enable motivated agriculture, forestry, and fisheries operators to run their businesses profitably. We will take all necessary steps to dispel the people’s anxiety about the impact of the TPP by transforming the “agricultural, forestry, and fisheries industry.” We will turn this into an industry where motivated producers can engage in reproduction without worry and an industry with a future for young people.
We will promote the building of a global value chain not only for big companies, but also for middle-ranking companies and small and mid-size enterprises. The government will work collectively to make the TPP contribute to Japan’s economic growth and regional economic revitalization.