Tokyo, Sept. 15 (Jiji Press)–As Yoshihide Suga becomes Japan’s new prime minister Wednesday, the Suga-led government will face the important challenge of promoting free trade across Asia amid the global economic slowdown due to the novel coronavirus pandemic, as well as rising U.S.-China tensions.
Calls may grow for Japan, which is highly dependent on trade and has ties with the two conflicting superpowers, to lead the way in battling protectionism and expanding free and fair areas for trade.
Discussions for the envisaged Regional Comprehensive Economic Partnership free trade pact are expected to enter the final stretch this autumn. Participating countries, including the 10 members of the Association of Southeast Asian Nations, Japan, China and South Korea, hope to conclude their seven-year RCEP negotiations by signing an agreement by the end of the year.
They are expected to face the difficult choice of whether to aim for an agreement that includes India, which has declared its intent to withdraw from the negotiations, or for an accord by year-end by leaving out the South Asian nation with a huge population of over 1.3 billion.
The RCEP will be the first trade deal directly involving Japan and China. If Japan can curb Beijing’s aggressive economic diplomacy exemplified by the One Belt, One Road initiative and establish transparent free trade rules in Asia, this may keep a check on the “America first” protectionist stance of the administration of U.S. President Donald Trump, analysts said.
After its presidential election in November, the United States may demand additional negotiations for its trade pact with Japan. Japanese agricultural groups are concerned that Washington may demand the further opening of Japan’s market for agricultural goods, such as dairy products.
“We need to keep a close watch on moves by the United States,” a senior official of a Japanese ministry related to economic affairs said.
The Trans-Pacific Partnership free trade pact is also expected to be a significant part of Japan’s trade policy as Britain and Taiwan have shown interest in joining the agreement.
“It’s important for the TPP to increase member countries so that a wider range of topics, such as the digital realm, national security and human rights, are addressed,” said Keisuke Hanyuda, chief of Owls Consulting Group Inc. and a former Japanese trade ministry official, who is an expert on trade negotiations.