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TOKYO — Japan will seek to join negotiations for a wide-ranging, multilateral free trade pact with the United States and other Pacific nations, Prime Minister Shinzo Abe said Friday, giving heft to trade talks that could now encompass two-fifths of the world economy but also bringing on board a country with special demands and reservations that some participants fear will delay a final agreement.
TOKYO — Japan will seek to join negotiations for a free-trade pact with the United States and other Pacific nations, Prime Minister Shinzo Abe said on Friday, giving heft to talks that could encompass two-fifths of the world economy but also adding a country with demands and reservations that some participants fear will delay an agreement.
In an impassioned televised address, Mr. Abe portrayed the proposed pact, the Trans-Pacific Partnership, as Japan’s “last chance” to remain an economic leader in Asia and to shape the economic future in the fast-growing region.
In an impassioned televised address, Mr. Abe portrayed the pact, called the Trans-Pacific Partnership, as Japan’s last chance to remain an economic power in Asia and shape the region’s economic future.
“Japan must remain at the center of the Asian-Pacific century,” Mr. Abe said. “The emerging economies of Asia are also opening up their economies.”
“Japan must remain at the center of the Asian-Pacific century,” Mr. Abe said. “If Japan alone continues to look inward, we will have no hope for growth. This is our last chance. If we don’t seize it, Japan will be left out.”
“If Japan alone continues to look inward, we will have no hope for growth,” he added. “This is our last chance. If we don’t seize it, Japan will be left out.”
With strong opposition from Japan’s farming lobby and other powerful groups, Mr. Abe is taking a big political risk in embracing the free-trade talks. Japan’s largest agricultural cooperative has campaigned against trade liberalization. It says such a change would devastate the nation’s farms, a plea that has resonated in the wider public. A majority of the lawmakers in his own Liberal Democratic Party depend on the rural vote and object to the free-trade deal.
For the United States, the Trans-Pacific Partnership has become a major part of President Barack Obama’s promise to increase U.S. exports, as well as the vehicle for his so-called pivot of U.S. foreign policy toward Asia.
Mr. Abe is betting, however, that his strong popularity will help him ride out the furor. He will face his first test at the polls this summer, when national elections for Parliament’s upper house are scheduled.
The prospect that Japan would join the talks comes as the United States is about to embark on similar negotiations with the European Union. If all the talks prove successful, the result would be a significant reduction in trade barriers among the richest nations in the world.
“I promise to take the best path forward for Japan’s national interest,” he said. “I will protect what we must protect and demand what we must demand.”
The talks with Europe, endorsed by President Obama, have broad support from business groups on both sides of the Atlantic, but could still fail because so many special interests will be affected. The negotiations could start as early as May, with the goal of eliminating tariffs and, perhaps more importantly, harmonizing regulatory standards for products like drugs and cars.
To soften the blow of a more open economy, Mr. Abe has secured vague support from the United States that some Japanese agricultural products — like rice, which is protected by a 778 percent tariff — would be exempt from the free-trade negotiations.
In Japan, Mr. Abe is taking a big political risk in embracing the free trade talks, given the strong opposition of the farm lobby and other powerful interest groups. The largest agricultural cooperative in Japan has actively campaigned against opening up trade, saying it would decimate farms in the country, a plea that has resonated among the wider public. Within his own Liberal Democratic Party, a majority of lawmakers depend on the rural vote and object to the free trade deal.
But insisting on these exceptions could hurt Japan’s hand in negotiations elsewhere, especially in talks to gain further access to foreign markets for its manufacturers, which account for three-quarters of the country’s exports. And some participating countries worry that Japanese demands will slow the talks.
Mr. Abe is betting, however, that his strong popularity ratings will help him ride out the furor. He will face his first test at the polls this summer, when national elections for Parliament’s upper house are due.
The lead negotiator for Singapore, Ng Bee Kim, said last week that Japan would be permitted to participate only if existing members agreed that it could “keep up the good momentum” at the talks.
“I promise to take the best path forward for Japan’s national interest,” he said. “I will protect what we must protect, and demand what we must demand.”
It is unclear to what extent Mr. Abe is willing to commit to other structural changes that the pact might demand of Japan’s economy.
To soften the blow of a more open economy, Mr. Abe has secured vague support from the United States that some Japanese agricultural products — like rice, which is protected by a 778 percent tariff — would be exempt from the free trade negotiations.
Japan’s levies, which average 6.5 percent for its trading partners on most goods, are in line with those set by other industrialized nations. The exception is agricultural produce, on which Japan applies an average tariff of 25 percent.
But insisting on these “sacred cows” could hurt Japan’s hand in negotiations elsewhere, especially in gaining further access to foreign markets for its manufacturers, which account for three- quarters of the country’s exports. Some participating countries worry that Japanese demands will slow the talks.
The partnership seeks not only to eliminate tariffs but also to do away with other barriers to foreign trade, like cumbersome regulations — for which Japan is notorious — in retail, health, automobiles and other fields that shut out foreign competitors.
The lead negotiator for Singapore, Ng Bee Kim, said at the latest round of Trans-Pacific Partnership talks during the past week that Japan would be allowed to participate only if existing members agreed it could “keep up the good momentum” at the talks.
Proponents of free trade say such overhauls could transform the Japanese economy for the better, making insular industries more competitive. Joining the Trans-Pacific Partnership would expand the Japanese economy by at least $33 billion — nearly 0.7 percent — the government estimated.
It is unclear how much Mr. Abe is willing to commit to other structural changes that the pact might demand of the Japanese economy.
Mr. Abe has made such structural changes one of the three pillars of his economic growth strategy, together with an aggressive monetary policy and government spending.
Japanese levies, which average 6.5 percent for its trading partners on most goods, are in line with those set by other industrialized nations. The exception is agricultural produce, on which Japan slaps an average 25 percent tariff.
“It’s a start, but a very welcome step for economic growth,” Ryutaro Kono, Japan economist for BNP Paribas, said in a note to clients.
But the partnership seeks not only to eliminate tariffs, but also to do away with other barriers to foreign trade, like cumbersome regulations — for which Japan is notorious — in fields including retailing, health and autos, that shut out foreign competitors.
But Japan’s agricultural cooperatives have joined with other interest groups to portray the partnership as a threat to the Japanese lifestyle. A nationwide association of doctors opposes the pact, arguing that it will force Japan to open its state-controlled health industry to American-style health insurance, eroding its universal insurance system.
Proponents of free trade say such overhauls could transform the Japanese economy for the better, making insular industries more competitive. Joining the Trans-Pacific Partnership would expand the Japanese economy by at least ¥3.2 trillion, or $33 billion — about 0.66 percent — the government estimated Friday.
“In America, the first thing they ask you in the hospital is, ‘What insurance plan are you on?’ ” warned a full-page ad placed in major newspapers on Friday by the Tokyo Medical Association.
Mr. Abe has made such structural overhauls one of the three pillars of his strategy to get Japan growing again, together with an aggressive monetary policy and government spending to beat a long-deflationary economy.
With its origins in a 2006 trade pact among Singapore, New Zealand, Chile and Brunei, the Trans-Pacific Partnership has grown into a major free-trade initiative that accounts for almost 40 percent of the world’s gross domestic product — a larger share of the global economy than the European Union.
“Increased trade is probably Japan’s best bet in getting out of its current economic doldrums,” said Noah Smith, an assistant professor of finance and economics at Stony Brook University in New York. “If Abe can actually push this through, this will be his economic legacy, and it will be a positive legacy.”
Participating nations aim to sign a comprehensive pact that covers not just trade in goods and services but also foreign investment, government procurement, intellectual property rights and environmental and labor protections.
But agricultural cooperatives in Japan have teamed up with other interest groups to present the partnership as a threat to the Japanese lifestyle. A nationwide association of doctors opposes the pact, arguing that it will force Japan to open up its state-controlled health sector to American-style health insurance and erode its universal insurance system.
For Japan, the agreement would be a way to catch up with rivals like South Korea, which has signed free-trade agreements with the United States and the European Union and has opened free-trade talks with China. Japan has no trade agreements with such major trading partners except for a recent pact with India.
“In America, the first thing they ask you in hospital is, ‘What insurance plan are you on?”’ warned a full-page advertisement placed in major newspapers Friday by the Tokyo Medical Association.
Japan also sees a leadership role in the partnership as a way to return to center stage after being eclipsed in the region by the rise of China, which many in Tokyo view as jeopardizing Japan’s economic interests and security. China, which is pursuing its own bilateral and multilateral trade agreements in the region, is unlikely to join the agreement soon because of the concessions on state-owned enterprises, intellectual property and labor that the pact would require. That has, in effect, made the partnership a vehicle of sorts for the United States, and now Japan, to counter China’s influence.
With its origins in a 2006 trade pact between Singapore, New Zealand, Chile and Brunei, the Trans-Pacific Partnership has grown into a major free trade initiative that accounts for almost 40 percent of the world’s gross domestic product — a larger share of the global economy than the European Union.
For the United States, the Trans-Pacific Partnership has become a major part of President Obama’s promise to increase American exports, as well as the vehicle for his so-called pivot of American foreign policy toward Asia.
Participating nations aim to sign a comprehensive pact that covers not just trade in goods and services, but also foreign investment, government procurement, intellectual property rights, and environmental and labor protections.
Still, many of the issues that have made an American-Japanese agreement elusive could again prove tricky for both sides to resolve in a broader pact. American automakers oppose Japan’s participation in the talks unless Japan commits to changing what the Big Three in Detroit say are unfair domestic regulations that shut foreign carmakers out of the Japanese market.
Such a pact would be a big step forward for free trade at a time when global trade negotiations have stalled, giving way to bilateral and regional talks, of which the Trans-Pacific Partnership is shaping up to be the largest.
“Japan has shown no willingness to change their unfair trade practices,” Matt Blunt, the president of the American Automotive Policy Council, said in a statement last month. “We are dedicated to free trade, but it should be fair trade too.”
For Japan, the agreement would be a way to catch up with burgeoning rivals like South Korea, which has signed free trade agreements with the United States and the European Union and has opened free trade talks with China. Japan has no trade agreements with such major trading partners, except for a recent pact with India.
Tokyo also sees a lead role in the pact as a way of returning to the center stage after being eclipsed in the region by the rise of China, which many in Tokyo see as jeopardizing Japan’s economic interests, and security. And Tokyo worries that unless it joins the partnership talks now, it will have less say later, as rules and conditions are decided.
China, which is also pursuing bilateral and multilateral trade agreements in the region, is unlikely to join the partnership soon, because of the various concessions on state-owned enterprises, intellectual property and labor that the pact would require. That has in effect made the partnership a vehicle of sorts for the United States, and now Japan, to counter Chinese influence.
The pact which would also amount to a de facto U.S.-Japanese free trade agreement, could force Washington and Tokyo to address longstanding trade quarrels that have marred otherwise close economic ties between the world’s largest and third-largest economies. China is now the second largest.
Many of the issues that have made a U.S.-Japanese agreement elusive could again prove tricky for both sides to resolve in a broader pact. U.S. carmakers oppose Japan’s participation in the talks unless Japan commits to changing what the Big Three in Detroit charge are unfair domestic regulations that shut foreign carmakers out of the Japanese market.
“Japan has shown no willingness to change their unfair trade practices, and without significant reform, we remain concerned about inviting their negotiators to join the talks,” Matt Blunt, president of the American Automotive Policy Council, said in a statement last month. “We are dedicated to free trade, but it should be fair trade too.”
