Latest Post

Japan, EU should use EPA to be standard-bearers for free trade

To press the United States to correct its protectionist trade policies, it is important for Japan and the European Union to build a solid framework of free trade.
Prime Minister Shinzo Abe signed a Japan-EU economic partnership agreement.
Under the EPA, duties on more than 90 percent of industrial and agricultural products will be eliminated on both sides. The two sides have also laid down rules aimed at protecting intellectual property rights and at facilitating electronic commerce.
Japan and the EU, when combined, account for about 30 percent of the global gross domestic product. With the creation of a massive free trade zone, the economic activities of both sides will be invigorated further, which will strengthen their foundation for growth.
It should be rated highly that the EPA has been signed, thanks to tough negotiations that stretched over about five years.
Japan and the EU aim to have the EPA enter into force early next year. Both sides must move forward smoothly with the approval procedures in their legislative bodies.
While other countries are working to reduce tariffs, the United States has been intensifying its protectionist policy of imposing punitive tariffs on imports. Imposing further tariffs must, if anything, affect consumers and companies in the United States, through such developments as higher prices for imported goods.
Laying out a framework for both Japan and the EU to enjoy the benefit of free trade will effectively check the United States, together with the Trans-Pacific Partnership (TPP) multilateral free trade pact.
Make farming competitive
It is understandable that Abe emphasized during a press conference following the signing ceremony that Japan and the EU will lead the world as standard-bearers for free trade.
When the EPA is put into force, Japanese consumers will be able to buy such European products as wine and cheese at cheaper prices. With the EU’s elimination of tariffs on Japanese automobiles, auto parts and the like, Japan can also expect to have more exports.
During the Diet deliberations on approving the EPA, it will be necessary to thoroughly explain the merits to be derived from the accord, thus spreading an understanding of free trade.
It is also essential to take care of domestic industries that could be affected by the tariff cuts.
It is inevitable for livestock farmers who produce dairy or meat products and other producers to see their output compete ever more fiercely with European counterparts.
In preparation for the Japan-EU EPA and the TPP coming into effect, the government has already been moving ahead with measures to strengthen the management of farming households. Truly needed efforts must be steadily implemented.
Possible policy effects should be examined closely so that government measures will not end up being a handout of budgetary funds.
The latest agreement will also be an excellent opportunity for Japanese agriculture to transition into a competitive industry.
The EU will also eliminate duties on green tea, sake, scallops and so forth, which Japan regards as promising export items.
Japan should explore new markets for its agricultural and marine products, thus leading to increases in exports.
It is important for both producers and local governments to make such efforts as conducting market research to ascertain the preferences of European consumers, as well as devising sales strategies to enhance the brand power of Japanese-made products.