The future of the Trans-Pacific Partnership trade agreement looks murky in the U.S., but in Japan they're already shaping new policies to cope with the pact's effects.
In Washington, Congressional leaders have warned President Barack Obama not to submit TPP for ratification until after November's elections. Even then there's no guarantee Congress will buy the deal.
In Tokyo things are different. The Japanese government is using the TPP as a wedge to jam through economic reforms that powerful interest groups have long blocked. According to DTN's Japan correspondent, Richard Smith, the reforms include a new agriculture policy.
With tariffs falling thanks to the TPP, the focus of policy will switch from protecting farmers against imports to helping them to become efficient enough to compete for export markets. The government says it will encourage the use of data in agriculture and help farmers become better at marketing and branding.
Fresh from a press briefing by the agriculture minister, Smith summed up the new policy as "turning agriculture into industry and turning farms into businesses."
"Easier said than done," you may think, and that in fact is the reaction of more than a few observers to the Japanese government's drive to reform agriculture, corporate governance and the labor market. It doesn't help that the minister in charge of pushing through the reforms, Akira Amari, was just forced to resign in the wake of a political-money scandal.
Yet while doubters may question whether Prime Minister Shinzo Abe will succeed in reforming the economy, few doubt his commitment to the TPP. Like President Obama, Abe sees TPP as a way to prevent China from writing the rule book for trade in the Asia-Pacific.
TPP is hard on coddled Japanese sectors like agriculture, though, which is why the government is mulling new policies. In effect, the government is telling agriculture: TPP is a fact, so your only choice is to change your ways. Become competitive -- with government help, if necessary -- or die.
Having covered the Japanese economy for eight years in the 1980s and early 1990s, I am intrigued by the changes going on here today. I have just returned to Tokyo for the first time in 15 years for a 10-day visit. My main purpose in coming is to reconnect with some old friends, but I will certainly try to assess what's changing while I have the chance. Stay tuned for a future blog post on this.
Urban Lehner can be reached at email@example.com
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