After the China-Australia FTA negotiations were restarted last year, the Japan-Australia FTA has also resumed. Maybe a break was for the best, certainly demonstrated that Australia can wait.
More interesting, after Kevin Rudd trip to Japan last year and the positive sounding he got on the FTA, there is evidence that Japan is trying serious to get the negotiations up.
Maehara Seiji in his recent speech to Diet on Foreign Policy (here) called for early conclusion to negotiations with Australia. Maybe by the end of this year we will have the framework agreement in place.
Showing posts with label FTA. Show all posts
Showing posts with label FTA. Show all posts
Tuesday, 1 February 2011
Tuesday, 2 November 2010
TPP vs the Farmers:
In recent weeks, Kan Naoto has sounded out the possibility of Japan joining the TPP.
Today, the GOJ declared that an Agriculture Reform Promotion Headquarters would be set-up within the National Strategy Office. Together with other reforms to this Office, it is clear that Kan is gunning to run through this office the painful reforms necessary to get Japan on the TPP bandwagon and open up the Japanese economy.
Yamada and other pro-Agriculture voices within the DPJ aside, Kan at least seems determined to push it.
Wednesday, 15 September 2010
FTAs trigger anti-dumping
Prusa and Teh have just done the number crunching to show what was suspected all along -that FTAs trigger anti-dumping disputes between non-members. Data replicated below and link.
Table 1. Antidumping activity by FTA status
Target Country | ||
Non-FTA Country | FTA Country | |
Pre-FTA | 506 | 370 |
(58%) | (42%) | |
Post-FTA | 3554 | 375 |
(90%) | (10%) | |
At this stage however, Prusa&Teh have not disaggregated their data, and there is clearly alot more here. I would be interested to see the pattern of disputes and FTAs in the Asia Pacific, in any case.
It seems that FTAs really do run trade and politics concerns together - at some stage it will be asked whether this is rational. FTA as an investment policy anyone?
Saturday, 28 November 2009
Japan-Thai FTA: "Movement of natural persons"
Earlier today in a bookshop I picked a glossy magazine of conservative news type, it may have been "Will", but in honesty I have forgotten.
One of the stories focused on the "vice industry", prostitution in particular, in Japan being controlled by foreigners. A suggestion was made that the Japan-Thailand FTA had made this easier. Dismissing it as conservatism hype, I put the magazine down and moved, but according to more respectable sources - sex workers may indeed find it easier to move (or be moved) to Japan post-FTA (read here).
Then just now, I thought I would read the text of the Japan-Thailand FTA. Sure enough under the "movement of natural persons" is liberalisation of visa requirement for "Spa services." Apparently there is some traditional Thai Spa services for which only a Thai trained and licenced person will do.
But is this for real? It does not take a lot of imagination to see how this could be abused, a massage parlor would simply notify immigration that they had hired a "Thai Spa service provider" to provide "spa services" and then get the visa. In fact it is almost as if the door was left open on purpose. Odd things, these FTAs.
One of the stories focused on the "vice industry", prostitution in particular, in Japan being controlled by foreigners. A suggestion was made that the Japan-Thailand FTA had made this easier. Dismissing it as conservatism hype, I put the magazine down and moved, but according to more respectable sources - sex workers may indeed find it easier to move (or be moved) to Japan post-FTA (read here).
Then just now, I thought I would read the text of the Japan-Thailand FTA. Sure enough under the "movement of natural persons" is liberalisation of visa requirement for "Spa services." Apparently there is some traditional Thai Spa services for which only a Thai trained and licenced person will do.
But is this for real? It does not take a lot of imagination to see how this could be abused, a massage parlor would simply notify immigration that they had hired a "Thai Spa service provider" to provide "spa services" and then get the visa. In fact it is almost as if the door was left open on purpose. Odd things, these FTAs.
Sunday, 22 November 2009
Hatoyama’s FTA strategy; no strategy at all?
PM Hatoyama has now had several opportunities to put forward his view on a Free Trade Area in East Asia. Thus far his “vision” has proven to be more dependent on the audience, rather than economic or strategic factors. I will discuss the CJK-FTA, or China-Japan-Korea trilateral FTA as it is also known, and then zoom out to the larger issue of US partipation in the East Asian FTA project.
Firstly, with regard to the CJK-FTA, Hatoyama proposed on October 10 Beijing Trilateral (Beijing) that such an FTA be accelerated. At the same time Hatoyama proposed that an investment pact among the three be concluded. China’s position from the outset has been than an investment agreement would not be considered outside of an FTA – on reflection this was an early indication that progress had been made on CJK-FTA.
But while Japan’s interests in an investment agreement (to protect intellectual property, manufacture technique and brand-names), have both been aired and are well understood, Japan’s interests in a trade deal with China are much less clear. Indeed, Koizumi had turned down several requests from the Chinese side that an FTA be formed; in the process willfully ignoring the results of joint research which urged an early conclusion to the trialateral FTA[1].
Just over two weeks later in Hua Hin (Thailand), Hatoyama progressed the CJK-FTA idea with the announcement of working groups to do joint research on the CJK-FTA. While this is the third time research has been commissioned, it is the first time government departments are involved.
Why did Hatoyama reverse the LDP's position? Was it because China was doing something important differently, like its internal politics or trade policy? No. Was it because the World Financial Crisis demanded that Japan export to someone, even China, in order to keep jobs? Perhaps, but an FTA with China could just as easily cause the opposite (more unemployment) in the Japanese economy.[2]
Although it is possible Hatoyama or the Trade Minister Naoshima had talks with the relevant bureau in the Ministry of Foreign Affairs, I am told that the Ministry of Economy, Trade and Industry has not been asked to provide any sort of policy brief as to the implications of a CJK to Hatoyama (or his Office) prior to his announcements at either of the above forums.
This is suggestive of a short-term motivation. Considering the manner in which CEPEA was launched, there exists a precedent for Japanese politicians to just announce an FTA/EPA with shocking little 'nemawashi' or domestic consensus building first. Rather each of these announcements by Hatoyama seems to be made on the moment with the current audience in mind.
The commitment to the CJK-FTA was announced suddenly by Hatoyama at the Trilateral summit, and was warmly welcomed by the PRC. Since Japan's benefits are uncertain, and at any rate little effort was apparently made to understand the possible gains, might this be simply a proposal aimed at warming the relationship with China brought on by the fact of the Summit itself. In other words, no summit - no proposal. Or more precisely, this was a policy spectacle produced with audience in mind rather than specific gains. This commitment was re-affirmed at the APT, and the same can more or less be said there too.
Zooming out from the narrow issue of of CJK-FTA, if policy is being made to suit the audience rather than the national interest, it will be difficult to predict where Japan eventually decides to stand on the 'big' issue of US inclusion in the East Asian FTA project. The trajectory thus far has been towards US inclusion, but Hatoyama temperament and "right" series of events might prompt a surprise another turn-around. For the US, PM Hatoyama is man to checked on more, rather than less, frequently.
Intriguingly, the clear statement by US President Obama about the importance of the Pacific to US strategy and US-Japan relations in Tokyo prior to APEC and Singaporean PM Lee’s appeal that the US be included in any regional trade pact seems to have shifted Hatoyama’s assessment [3]. When commenting on membership at a post-APEC forum, Hatoyama (mindful of his APEC audience) noted membership would be 'open', to any who “shared the dream”[4]. Again, the audience counts significantly. Prehaps at new years APEC which Japan will host Hatoyama will put the US in the picture fully and formally. Then again, perhaps not.
1. Alan jr. Yonan, "Asia Economy Watch; Japan, China, S Korea Mull Trade Pact," Dow Jones International News, 30 Janurary 2004.
2. Baldwin, "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade."p1491
3. http://www.eastasiaforum.org/2009/10/13/hatoyamas-east-asia-community/
4. http://www.kantei.go.jp/foreign/hatoyama/statement/200911/15singapore_e.html
Sunday, 16 August 2009
The Ministry of Agriculture, Farming and Fishery; double game.
This is from today’s Sunday Project (Tsuiseki). It is an article of common knowledge that Japanese bureaucracies are able to control indirectly policy output in ways that other governments (such as Australia) simply would not allow. But the Sunday Project today opened my eyes to the extent that one Ministry, the Ministry of Agriculture, Farming and Fishery (MAFF), will go in order to control public discourse (and thus policy) on issues it considers important. Important, that is, to the farm lobby, as the MAFF reports on food self-sufficiency (Jikyuu-ritsu) can not be concerned by a fair and balanced contribution to the public debate.
Anyone who reads the Japanese newspapers regularly would know this term. And some might even remember the number that goes with it, 40%. Jikyuu-ritsu forty percent is almost a mantra for the MAFF, and via their reports it now featured widely in news, commentary and even children’s textbooks (complete with ‘40%, that is low (bad)’ implicit in the text. Indeed, there is a question about whether this figure is indeed low and whether that is ‘bad’, but first a note about the somewhat unusual manner of calculation.
Japan, like Korea (one assumes for similar reasons), uses the calorific method of calculation, rather than the near universal cost-base calculation. This method divides the number of calories an average Japanese consumes by the amount that Japan produces. The reason is simple enough, 40% is lower than 66%, the figure produced if the cost-base calculation were to be used instead. (Another way of saying this would be that the Japanese mostly buy Japanese produce but that the produce bought is mostly low-calorie yielding. Again this is due to the oddity of the calculation method, which factors out meat, milk and eggs that is produced using imported feed.)
But the MAFF has deliberately chosen the calorific method anyhow. Perhaps this is because 66% simply is not sufficiently panic causing. Especially since the MAFF has repeatedly stated that Japan’s self-sufficiently rate is the lowest in the world (they mean lowest in the OECD, but it quickly becomes confused in the media, thanks Chris). This claim would not be true if one were to use the cost method, with the UK scoring much lower in this case. Even the minister in charge, Ishiba noted on the Sunday Project program, that this method of calculation was somehow odd or confusing.
It is clear then that the MAFF is trying to steer Japanese policy toward building up (subsidizing) domestically produced farm produces. While this kind of protectionism might go well over with the agricultural lobby, it is costing Japan – agriculture is after all just 1% of Japan’s GDP (see, Mulgan at the EAF.) Worse still the argument for a high Self-Sufficiency score is itself pretty poor. If one thinks about it, a country only needs high scores on self-sufficiently during a major war. Such a war is not likely any time soon, so Japan should be putting its economic priorities first. Moreover, there is a good argument for liberalizing Japanese agricultural markets for strategic reasons. Signing an FTA with the US, or Australia for that matter, which covered farm products would not just give an Japan’s economy a boost, but would also help to lock-in American (or other 3rd countries) security interests in Japan. While it is true that Chinese farm exports to Japan are growing steeply, if Japan is really worried about this issue as one of national security then supporting domestic farmers is not the answer. Japan is going to have to dependent to some extent on someone for its food security, it will have to make a choice.
Anyone who reads the Japanese newspapers regularly would know this term. And some might even remember the number that goes with it, 40%. Jikyuu-ritsu forty percent is almost a mantra for the MAFF, and via their reports it now featured widely in news, commentary and even children’s textbooks (complete with ‘40%, that is low (bad)’ implicit in the text. Indeed, there is a question about whether this figure is indeed low and whether that is ‘bad’, but first a note about the somewhat unusual manner of calculation.
Japan, like Korea (one assumes for similar reasons), uses the calorific method of calculation, rather than the near universal cost-base calculation. This method divides the number of calories an average Japanese consumes by the amount that Japan produces. The reason is simple enough, 40% is lower than 66%, the figure produced if the cost-base calculation were to be used instead. (Another way of saying this would be that the Japanese mostly buy Japanese produce but that the produce bought is mostly low-calorie yielding. Again this is due to the oddity of the calculation method, which factors out meat, milk and eggs that is produced using imported feed.)
But the MAFF has deliberately chosen the calorific method anyhow. Perhaps this is because 66% simply is not sufficiently panic causing. Especially since the MAFF has repeatedly stated that Japan’s self-sufficiently rate is the lowest in the world (they mean lowest in the OECD, but it quickly becomes confused in the media, thanks Chris). This claim would not be true if one were to use the cost method, with the UK scoring much lower in this case. Even the minister in charge, Ishiba noted on the Sunday Project program, that this method of calculation was somehow odd or confusing.
It is clear then that the MAFF is trying to steer Japanese policy toward building up (subsidizing) domestically produced farm produces. While this kind of protectionism might go well over with the agricultural lobby, it is costing Japan – agriculture is after all just 1% of Japan’s GDP (see, Mulgan at the EAF.) Worse still the argument for a high Self-Sufficiency score is itself pretty poor. If one thinks about it, a country only needs high scores on self-sufficiently during a major war. Such a war is not likely any time soon, so Japan should be putting its economic priorities first. Moreover, there is a good argument for liberalizing Japanese agricultural markets for strategic reasons. Signing an FTA with the US, or Australia for that matter, which covered farm products would not just give an Japan’s economy a boost, but would also help to lock-in American (or other 3rd countries) security interests in Japan. While it is true that Chinese farm exports to Japan are growing steeply, if Japan is really worried about this issue as one of national security then supporting domestic farmers is not the answer. Japan is going to have to dependent to some extent on someone for its food security, it will have to make a choice.
Monday, 13 July 2009
Japan-India relationship, back to economics?
Japan's Foreign Minister Nakasone wrapped up a visit to India earlier in the month. That Japan's interests in India are expanding should come as no surprise, India too is a rising power in international affairs. What is interesting however is the approach to India that Japan has taken. It is no secret that India is viewed as something of a strategic hedge against China in some if the conservative circles in Japan. The Quadrilateral Initiative was a clear indication of this strategic assessment by Japan. Indeed, PM Abe who set up the Quad was crystal clear about the need to balance China out in the region when he discussed it with President Bush in 2007. But the Indians were in no mood to be added to a balancing coalition and this type of obvious strategic coordination collapsed in short order (early 2008). If India does not view China in quite the same way as Japan, how has Japan attempt to persuade them?
The same as always it seems, by providing economic side payments. The most important of these is the Japan-India Free Trade Agreement currently under negotiation. The Japan-India FTA is a strategic issue for Japan, as much as an economic one. Let's compare some figures. The bilateral trade flow between India and Japan is hoped to reach USD 20 billion by 2010. While, in spite of the current world financial crisis (which has knocked off nearly a quarter of trade versus the previous year) China and Japan's bilateral trade flow is over twice that at 45 billion. But Japan and China are not discussing an FTA. While, on the other hand, Japan and India are discussing an FTA.
With India accession to an ASEAN plus FTA, and the Australia/New Zealand-ASEAN FTA in place, Japan's FTA with India will lock-in the East Asia Summit (preferred by Japan to the APT) as the focus point for future regionalism.
The same as always it seems, by providing economic side payments. The most important of these is the Japan-India Free Trade Agreement currently under negotiation. The Japan-India FTA is a strategic issue for Japan, as much as an economic one. Let's compare some figures. The bilateral trade flow between India and Japan is hoped to reach USD 20 billion by 2010. While, in spite of the current world financial crisis (which has knocked off nearly a quarter of trade versus the previous year) China and Japan's bilateral trade flow is over twice that at 45 billion. But Japan and China are not discussing an FTA. While, on the other hand, Japan and India are discussing an FTA.
With India accession to an ASEAN plus FTA, and the Australia/New Zealand-ASEAN FTA in place, Japan's FTA with India will lock-in the East Asia Summit (preferred by Japan to the APT) as the focus point for future regionalism.
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