Japan Press Weekly

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2012 October 10 - 16 [ECONOMY]

Economy in subordination to US - IV: TPP, US final demand

Japan’s government change in 2009 seemed to put an end to a relation in which the U.S. government made requests to Japan on deregulation through its annual report, called the “Annual Reform Recommendations from the Government of the United States to the Government of Japan under the U.S.-Japan Regulatory Reform and Competition Policy Initiative.” The Democratic Party of Japan-led government, however, stepped directly into the shoes of its predecessor regarding this bilateral economic relation.

Prime Minister Kan Naoto and U.S. President Barack Obama in November 2010 launched a new economic relation named the “U.S.-Japan Economic Harmonization Initiative (EHI)”.

In February 2011, the first round of EHI meeting at the working-level took place in Tokyo. In the meeting, United States Trade Representative (USTR) officials blatantly demanded that Japan carry out deregulatory reforms in various fields.

According to a document released by the U.S. Embassy in Japan, the U.S. side in this meeting made deregulation requests on about 70 items in 10 fields such as information and communication technology, intellectual property rights, postal services, insurance services, agriculture, pharmaceuticals and medical devices.

Regarding the field of pharmaceuticals and medical devices, the U.S. made more than 20 requests representing the interests of U.S. major medical and pharmaceutical corporations which are aggressively pushing to enter the Japanese market.

In the USTR 2010 National Trade Estimate Report on Foreign Trade Barriers, the U.S. government urged Japan to liberalize its medical market by saying that Japan’s regulations on medical services are too restrictive for foreign corporations to penetrate into the market.

“The Trans-Pacific Partnership (TPP) free-trade pact will enable the U.S. to change Japan’s system,” pointed out Hagiwara Shinjiro, professor of economics at Yokohama National University.

He also stressed, “Using the TPP, the U.S. intends to bring market forces into Japan’s medical service system.”

Japan’s participation in the free-trade pact will accelerate entry of joint-stock companies into medical fields. It will also facilitate the U.S. demand for Japan’s deregulation of drug prices.

Japan’s universal healthcare insurance system requires drug companies to sell drugs at government-set prices, contrary to the U.S. in which drug companies can sell their products at free market prices. The U.S. pharmaceutical industry has been arguing that due to government regulations, drug prices in Japan are much lower than that in other countries. If Japan’s pharmaceutical market is liberalized as the U.S. demands, drug prices will dramatically increase. This will lead to the eventual destruction of the present national healthcare insurance system.

“Promotion of global trade itself isn’t wrong. The point is the way free trade is actually practiced. Now is the time to create a system for free trade in which every nation can achieve maximum benefits through mutual respect to sovereignty,” Hagiwara said.
(End of the series)

>Economy in subordination to US - I: Interfering in Japan’s affairs
>Economy in subordination to US - II: Pressure for postal service privatization
>Economy in subordination to US - III: Destruction of local economies