As one of the world’s leading exporters,
Japan is pleased to participate in the WTO discussion of trade liberalization in
agriculture, automobiles, and finance. While Japan endorses most of the
proposed resolutions, it is the feeling of our government that some may benefit
from modification.
Japan emphatically supports Resolution
I, which promotes the free trade of agricultural products, automobiles, and all
materials involved in the production of the aforementioned goods regardless of country
of origin. The total agricultural consumption in Japan exceeds 10 trillion yen,
but domestic farmers can only meet at most 44% of this demand (Tokyo
Foundation, Nov. 2013, web). This is due to the limited amount of land in Japan
suitable for cultivation. Therefore, the freer trade of agricultural products would
help our nation better cope with the chronic inability of domestic producers to
meet the nation’s agricultural demand. Additionally, Japan would experience
major benefits through the liberalization of the automobile trade. It is a
principle of international commerce that a nation should specialize in
industries in which it has comparative advantages and trade with others whose
specialties are in different fields of production. Evidently, Japan’s
comparative advantage lies in its automotive industry. With oil prices rapidly
falling, global demand for Japanese cars will continue to increase (Bloomberg,
Nov. 2014, web). Accordingly, the trade liberalization will help facilitate the
international auto market.
Japan also [p1] supports
the liberalization of global financial industries. As a member state of OECD,
Japan embraces the organization’s Codes of
Liberalization of Capital Movements (OECD, web). Furthermore, the
nation agrees with the principle that the market should be the main determinant
of currency exchange rates. Since the introduction of the floating exchange
system in 1973, the effective rate of yen has been decided on the basis of
underlying conditions for supply and demand in the exchange market (International
Economics, web). Japan intends to keep the system floating and thus endorses Resolution
VI. Having experienced the financial crisis of 1997 however, Japan questions
the soundness of Resolution V. The total abolition of control on international
capital flow might result in another global financial crisis in the future. For
this reason, it is our desire to further discuss on this particular topic.
With its championship of free trade, Japan
is willing to adopt the prohibition of non-tariff barriers as stated in Resolution
II. However, Japan must express its reservation about Resolution IV, which
would restrict Japan’s subsidies to its agricultural industry if adopted. Currently,
the agricultural population in Japan is 2.53 million, most of who are
small-scale farmers (Tokyo Foundation, Nov. 2013, web). These farmers will find
themselves in significant disadvantage when trade liberalization initiates
global competition against large farming corporations such as those in the US.
The domestic producers in Japan have long been receiving government subsidies,
and eliminating these benefits suddenly will threaten their livelihood. Thus,
Japan urges the participants of WTO to seek a more gradual approach to reducing
subsidies.
Concerning Resolution III, Japan recommends
a more cautious approach. While Japan is one of the biggest importers of GMO
food, its public remains largely skeptical of the products (Library of
Congress, web). Even if a GMO was not demonstrated to be unsafe for human
consumption, the Japanese government would still prefer to require the product be
re-tested thoroughly before entering the domestic market. This is not only to protect
consumer safety, but also to prevent any potential threat to biodiversity in Japan. Additionally,
the labeling of any imported GMO products is expected in accordance with the
nation’s Cartagena Act of 2003 (Library of Congress, web).
In conclusion, Japan remains open to
further debates on its abovementioned positions. Japan hopes to contribute to
WTO’s goal of achieving universal free trade by the year of 2020.
OECD. “OECD
Codes of Liberalisation of Capital Movements and of Current Invisible
Operations”. Web.
Sources
Bloomberg.
“Japan’s Exports Rise Most in 8 Months in Recovery Sign”. Web.
International
Economics. “Historical Exchange Rate Regime of Asian Countries”. Web. http://intl.econ.cuhk.edu.hk/exchange_rate_regime/index.php?cid=9
Library of
Congress. “Restrictions on Genetically Modified Organisms: Japan”. Web.
OECD. “OECD
Codes of Liberalisation of Capital Movements and of Current Invisible
Operations”. Web.
Tokyo
Foundation. “Japan’s Agriculture and the TTP”. November, 2013. Web.
http://www.tokyofoundation.org/en/articles/2013/japan-agriculture-and-tpp
