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Editorial: Make the Economic Dialogue propel structural reforms in Japan, U.S.

While Japan and the U.S. agreed on the general framework for future talks at the first meeting of the Japan-U.S. Economic Dialogue held in Tokyo on April 18, discussions on specific issues were put off to the next meetings.

 

Vice President Mike Pence indicated at the news conference held after the meeting that the U.S. is keen on concluding a bilateral free trade agreement (FTA) in the future. Secretary of Commerce Wilbur Ross also stated at a separate meeting with Minister of Economy, Trade and Industry Hiroshige Seko that he would like to see the bilateral discussions “embodied in an agreement in some form.” The U.S. will probably come up with various demands at meetings between government ministries and cabinet members from now on.

 

Even if Japan does engage in negotiations for a bilateral accord, it should take the agreements reached between the two countries during the TPP talks as a baseline. It is also necessary to continue to look into the possibility of effectuating the TPP accord by the 11 members minus the U.S., so that the TPP will not disintegrate after the U.S.’s withdrawal.

 

Both Japan and the United States are being called upon to seek not just short-term results but also mid- to long-term structural reforms that will bring mutual benefits.

 

The Trump administration is emphasizing the creation of jobs and the revitalization of manufacturing industries. However, even if it is able to restore jobs for a time through pressure on private companies and protectionist trade measures, the gains will be short lived.

 

Job creation will require fundamental structural reforms in the job market through such policies as occupational training and education to shift workers from low-productivity to high-productivity sectors.

 

Japan also needs to realize autonomous economic growth that does not rely on monetary and fiscal policies and other pump-priming measures. It is essential to undertake structural reforms in employment, agriculture, social security, and other sectors facing strong resistance. Inasmuch as the two countries have kicked off this Economic Dialogue, we hope that they will engage in talks with lofty goals. (Abridged)

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