Japan starts trade talks with Mexico

Reviewed By Hitoshi URABE

Article:
"Japan starts trade talks with Mexico"
http://asia.cnn.com/2003/BUSINESS/asia/01/13/japan.mexico.reut/index.html
(by Reuters) CNN

Comments:

This is a good news that the FTA talks between Japan and Mexico is showing progress. The article notes, however, that it would be optimistic to assume the negotiation could be concluded by the end of the year, which happens to be a concern shared among many analysts.

Until recently, Japan was not discussing special trade agreements with any country or a group of countries, perhaps for the fear of doing so might have had the country trapped in the web of international politics. Japan chose to go along solely with WTO, and by the time it realized everyone else was forming special relations with others, which in effect put Japan in a position where there would be no real friends, it was almost too late to remedy the situation.

So a few years ago, Japan altered its strategy almost 180 degrees and began to pursue bilateral trade relationships. In an endeavor to catch up with the others, the government at the time first sought for an agreement with South Korea. Critics were skeptical, however. Too obvious was the formidable task of sorting out all the controversial issues, political as well as economic, especially for the two countries that never had had an experience in establishing a broad bilateral trade agreement with anyone. Benefits were to be tremendous if an FTA had been established between the two countries, but at the time it was premature for either of the countries to attempt it.

Last year, Japan, for the first time, established a free trade agreement with Singapore, or so it was announced. It was criticized by some experts, however, that this agreement does not quite conform to the authentic format of FTA as ordinary recognized, for it in effect excluded agricultural produces, which would normally be a major subject of such an agreement.

Japan in fact has never opened up its market for foreign agricultural produce. Accusations imposed with regard to import of rice during previous WTO negotiations were evaded by counter-proposing a special and strange scheme, which in the end was accepted reluctantly by other members amidst quarrels between U.S. and EU over farming issues.

It is only very recent that Japan gradually realized that it might be left further behind in the international trade scene. They became aware of the situation perhaps through alarming experiences in international conferences such as the recent ASEAN meeting, where China seemed to take the leading role in promoting free trade in Eastern Asia. Some people in Japan began to finally recognize that in order for true FTA to be established, they would have to look seriously into agricultural policies so as to allow its market to be accessed by foreign suppliers.

The reported negotiation with Mexico should serve as a good exercise to enhance Japan's diplomatic capabilities to handle trade issues, as Mexico has ample experience through concluding dozens of FTA agreements, including the very challenging and rewarding negotiations with U.S. to become a part of NAFTA.

In the meantime, it was reported that Taiwan has completed FTA talks with Panama, which should be beneficial in economic terms for both countries, and a great political achievement for Taiwan.

In any case, it is inevitable for Japan to promote FTA for its own sake. Japanese people must realize that their survival depends on sound and stable trade relationships with other countries, which is also in literal sense as Japan already relies heavily on food from abroad to feed its people. It may perhaps be unfortunate for farmers and fishermen, but Japan cannot afford to have them keep doing things the way they have been accustomed to.