Japan Press Weekly

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2012 February 22 - 28 TOP3 [ECONOMY]

US corporate interests in TPP overshadow Japan’s economy

Primary talks between Japan and the United States over Japan’s participation in the Trans-Pacific Partnership (TPP) agreement have begun, and the second round of talks is scheduled for February 21-22 in Washington. Proposal that U.S. large corporations have sent to the U.S. government over Japan’s participation in the TPP are filled with their excessive requests.

Of 115 policy proposals in regard to Japan’s TPP participation, those related to agriculture account for nearly 30%.

Free US operation in mega market

Trade with the participants in the ongoing TPP talks accounts for a mere 5.3% of U.S. trade. The U.S. Chamber of Commerce in Japan said that the situation will dramatically change with Japan’s full participation. It stresses that with Japan’s entry into the free-trade pact, 36% of the world’s GDP (gross domestic product) will be encompassed in a free trade zone based on new and extensive trade rules. The USCC envisions the TPP as offering U.S. multinational corporations a mega market in which they can freely operate.

What do the ‘trade rules’ mean?

Deputy U.S. Trade Representative Demetrios Marantis said that a goal of the Obama administration is to secure a position in which U.S. workers and business owners can become the clear winners in their competition in markets in Asia and the Pacific (Dec. 14, 2011, at U.S. House of Representatives Ways and Means Committee).

The United States can acquire the status of “winner” if it can be deeply involved in Japan’s policy-making procedure and impose U.S. rules on Japan.

The U.S. Coalition of Service Industries (CSI) is calling on the U.S. government for more efforts to have Japanese ministries allow U.S. corporations and business organizations operating in Japan to take part in discussions on rules and regulations not as mere observers but as full members.

At the same time, the U.S. business world stresses the need for Japan to settle pending issues between the two nations. For example, the National Cattlemen’s Beef Association (NBCA) states that Japan needs to show its intent to take part in the TPP by relaxing its restrictions on imports of beef 20 months old or younger. The NBCA estimates that to lift the ban will increase the sale of U.S. beef in Japan by 1 billion dollars (78 billion yen).

TPP can break Japan’s resistance

The U.S.- Japan Business Council has urged the Japanese government to not expect exceptional treatment on key agricultural products. It stresses that it is extremely important for U.S. producers to have Japan lower its tariff on rice.

The USA Rice Federation complained about Japan’s tests on residual pesticides, claiming that costs for inspection are higher than the cost of risks, thus having a negative effect on U.S. suppliers.

The world’s biggest retailer, the U.S. Walmart Corp., argues that tariffs on rice and other key items are hindering U.S. corporate activities in Japan. It says that in exporting U.S. apples to Japan, the required health safety steps are restraining such U.S. apples as jona-gold, golden delicious, red delicious, and gala. The California Cherry Advisory Board calls for an abolition of Japan’s 8.5% tariff on cherries, as well as laxer standards on registering procedures in the use of post-harvest fungicides. The California Table Grape Commission is calling for Japan to relax standards on residual agricultural pesticides.

Many complaints in regard to Japan’s postal services

At present, postal services in Japan are separated into five components: Japan Post (JP) where the government holds all its stocks as an umbrella organization, mail delivery service, yubinkyoku kaisha, JP Bank, and JP Insurance. The U.S. business world is complaining about this postal system in Japan as not offering conditions of equal competition with private corporations. The Express Association of America blames JP’s parcel delivery service as taking advantage of monopoly interests and enjoying privileges in passing customs and easier parking regulations. It calls for a remedy favoring the private sector. The CSI argues that JP’s international Express Mail Service (EMS) should be brought under the same category as private competitors.

Call for introducing ISDS

U.S. industries and corporations are complaining about Japanese government procurement linked to large public works projects not being open to foreign capital. The USCC points out that foreign capital in Japan cannot participate in bidding on public works projects, claiming that the required qualifications for bidders are too strict and that application procedures are too rigorous. General Electric is calling for an exchange of opinions between U.S. business interests and the Japanese government regarding procurement procedures. The Emergency Committee for America Trade (ECAT) stresses the need for a clause for ISDS (investors-state dispute settlement) enabling foreign capital to sue the government in case its activity is restricted by that government.