Under fair rules, a large number of countries link together and enjoy the common benefits of economic revitalization: Spreading such principles of free trade throughout the world is important.
The Trans-Pacific Partnership (TPP) free trade pact that 11 countries, including Japan and Australia, participate in will come into force on Dec. 30, as the requirement of at least six nations that are signatories to the accord completing domestic procedures has been met.
A free-trade zone that accounts for more than 10 percent of global gross domestic product (GDP) will come into being in the fast-growing Asia-Pacific region. In addition to the elimination of tariffs, high-level rules on trade and investment in the region will also be established.
Although the United States has withdrawn from the accord, the significance of TPP is great as it will raise the level of economic growth in the region. It is a welcome sign that signatories have expedited their efforts to make relevant adjustments domestically and managed to have the accord enter into force within this year.
Lying behind the swift effectuation of the accord is the intention of placing the United States and China in check. While the United States intensifies its protectionist policy, China continues unfair trade practices.
Member countries, which will eliminate a large number of tariffs, will have an advantage over the United States in intra-regional export. By making the merits of a multinational agreement tangible, the accord should be made to function as a bulwark to defend free trade from protectionism.
The agreement has incorporated rules that took China into consideration. With the rules, a muzzle will be placed on the infringement of intellectual property rights and the provision of excessive subsidies to state-owned enterprises.
If TPP rules become international standards, they will be effective in making it difficult for China to continue with such practices.
Seize favorable opportunity
Member countries will hold a committee meeting of ministerial-level officials next year and discuss steps concerning the acceptance of countries hoping to join. There are many countries hoping to join, including Thailand and Britain.
It is essential to steadily expand the scale of TPP, thus leading to the containment of protectionism and unfair trade.
In order to steadfastly maintain free trade, it will also become important to create other economic zones.
Efforts should be made for an early conclusion of the negotiations on the Regional Comprehensive Economic Partnership (RCEP) free trade accord, which includes China. By taking the lead in the negotiations, Japan should make rules standards for the RCEP as close as possible to those of TPP.
With the aim of concluding a trade agreement on goods (TAG) with the United States, Japan will start new trade talks with Washington as early as January. It is highly likely that the United States will strongly pressure Japan to open its market to farm products, for instance.
Regarding the liberalization of agriculture, Japan intends to limit this to those levels it had promised under hitherto trade agreements such as TPP. It is necessary to meticulously devise a strategy. Japan must not give in to any unreasonable demands.
Should the import of low-priced foreign goods increase with TPP coming into effect, the benefits will extend to consumers. On the other hand, domestic farmers and others will be exposed to fierce competition.
While taking measures to mitigate these pains, efforts should also be promoted to transform the effectuation of TPP into a favorable opportunity, such as one to increase the export of farm products and to help small and medium-sized firms expand abroad.