TOKYO, March 15, (Agencies): Prime Minister Shinzo Abe announced Friday that Japan will join talks on a Pacific trade pact that would oblige the country to open up sheltered industries including farming, long a bastion of protectionism.
The decision to seek participation in the US-led Trans-Pacific Partnership, or TPP, raised protests from farmers, who are a traditional bastion of support for Abe’s Liberal Democratic Party.
Many in Japan, however, see the pact as a way to overcome stubborn resistance to reforms essential for reviving the stagnant economy. In a national address, Abe said Japan has no choice but to opt for the growth that comes with freer trade or lose out to other countries that are capitalizing on such market opening.
“Japan has run into a big wall — low birthrate, aging and lingering deflation — and we have turned inward looking,” he said. “If Japan becomes the only one that turns inward, there is no chance for our growth. No businesses would want to invest in such a country and talented people would not be interested.”
“Joining TPP would be the beginning of a new Japan,” Abe said.
He repeatedly pledged to guard Japan’s national interest and ensure that the trade pact would benefit farmers as well as other Japanese.

“What we really should fear is doing nothing,” Abe said. “I promise you that we will guard our sovereignty as we pursue our national benefit through these negotiations.”
Despite such promises, Japan’s tariffs on farm products would likely have to come down: the average tariff on imported rice is nearly 800 percent, while rates for butter and sugar are over 300 percent.
The decision to join the talks dovetails with his “Abenomics” economic strategy, which is based on easing monetary policy, boosting public spending and longer-term reforms.
Japan’s agricultural lobby is small but politically powerful. However, after two decades of stagnation, calls by big business groups such as the Keidanren to join the trade pact or miss out on easier access to key export markets appear to have outweighed objections from farmers.
The average age of Japanese farmers is 66 and hundreds of thousands will retire in the coming years.
“If we don’t do anything about this, we cannot protect our villages or our beautiful countryside,” Abe said. “And that is the reality we face, whether or not we join TPP.”
News reports Friday said the government estimates that joining the Pacific trade agreement would boost Japan’s GDP by as much as 3 trillion yen ($31 billion) a year, equal to about 0.7 percent of GDP in the first year.
With Japan’s participation, the free trade zone “would cover basically 40 percent of (world) GDP. It would be a very, very big area and it would have a significant impact,” Schulz said.

Imperative
Apart from the imperative for reforming the economy, Abe’s agreement to push ahead with trade liberalization also reflects geopolitical realities: Japan’s status as the leading US ally in Asia also swayed the decision to participate in the trade talks. That angers some groups who object to foreign influence over domestic policy, including those who view the plan as an American scheme to usurp Japan’s sovereignty.
Japan is not truly interested in opening up its economy to imports and upcoming free-trade negotiations are a “masquerade”, according to a senior executive of Ford Motor Company.
Japan is set to launch trade talks with the European Union later this month and its prime minister said on Friday it would seek to join talks on a US-led Pacific free-trade pact, which could be agreed by the end of the year.

While many EU industries from pharmaceuticals to retail support negotiations with Japan, the car sector has deep reservations, arguing any deal would be a one-way street.
Stephen Biegun, Ford vice president of international governmental affairs, told Reuters this week that Ford was a great advocate of free trade, as long as it was truly free.
“Where it becomes challenging for us is when a negotiation masquerades as a free-trade agreement,” he said in an interview in Brussels.
“In the case of (South) Korea and in particular in the case of Japan there should be no mistake about it: these can be called free-trade negotiations, but the intention of the negotiating party with Europe is not to embrace the model of two-way trade.”
Biegun said no one believed European auto exports to Japan would increase after a deal.