Japan Government Wants Free Trade. Japan Farmers Don’t.

The U.S. and Japanese governments want it. Mitsubishi backs it. Toyota Motor (TM) says it can’t compete without it. Yet whether Japan joins the biggest attempt at a free-trade pact may hinge on farmers like Tadashi Hirose. Hirose loses money on his 14 hectares (35 acres) of paddies in southwest Hokkaido, forcing him to take a second job at a construction company. Still, he says, if Japan joins the Trans-Pacific Partnership trade pact, or TPP, the resulting competition from abroad would destroy his family’s livelihood and economically devastate Hokkaido, the top rice-producing region.

The number of Japanese farmers, full-time and part-time, is 2.5 million—pretty large for a country that is not a major exporter of farm products. Their contribution to Japan’s $5.9 trillion gross domestic product is tiny. Yet the farmers wield disproportionate clout in Japanese politics. “Because of the rural bias in Japan’s electoral system the farming lobby is very powerful, even though as a percentage of the economy it accounts for 1 percent,” says Risaburo Nezu, a former trade negotiator for Japan’s government and now a senior executive fellow at the Fujitsu Research Institute.

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Senator Levin: Japan a U.S. job killer – TPP

Sen. Carl Levin urged President Barack Obama to keep Japan from participating in nine-party free trade talks, saying its policies amount to "a U.S. job killer."

As early as Thursday in Tokyo, the Japanese government will announce whether it wants to participate in Trans-Pacific Partnership free trade agreement negotiations with the United States.

The Detroit Democrat said in a strongly worded letter that Japan must first "reverse decades of protecting its home auto market," and he urged Obama to "clearly oppose any effort by Japan to join the TPP at this time."

Japan, the world’s third-biggest economy, also has the world’s third-largest auto market.

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Japan’s Membership in Trade Pact

Japan’s participation in a free trade group led by the U.S., if it agrees, could open up the country’s agriculture markets worth $48 billion to foreign exporters of rice, sugar and beef, boosting global prices.

Membership in the Trans-Pacific Partnership could lift sales for Tyson Foods Inc. and Fonterra Cooperative Group Ltd., as participants aim to eliminate import tariffs within a decade, according to Norinchukin Research Institute. Prime Minister Yoshihiko Noda, who risks splitting his party if he supports joining the trade talks, has said markets must be opened to boost the weak economy, which is struggling to recover from the March earthquake and nuclear disaster.

Tariff elimination could deepen the country’s reliance on food imports to almost 90 percent from 60 percent, the agriculture ministry has forecast. Imports could tighten global supplies and boost prices of rice, which has gained 12 percent this year, and cattle futures, which have advanced 14 percent. Noda’s Democratic Party of Japan is divided over whether to promote trade to lift economic growth or protect farmers who may be harmed by lower tariffs and increased competition.

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Noda Risks Ruling Party Split With U.S. Free Trade Talks

Japan’s Prime Minister Yoshihiko Noda risks sparking the deepest split in his party since taking office two months ago as he determines whether to join trade talks with the U.S., his country’s No. 2 export destination.

Noda, who last week responded to exporters’ concern over the yen’s strength with what might have been the biggest currency intervention on record, set a deadline of this week for proceeding with the Trans-Pacific Partnership. The TPP would slash tariffs like Japan’s 778 percent duty on rice and open competition in industries including pharmaceuticals, stirring the opposition of about half of ruling-party lawmakers.

With South Korea having reached a deal with the U.S., failure to proceed ahead of a Nov. 12-13 Asia-Pacific summit risks further diminishing the stature of a nation surpassed by China as the world’s second-largest economy. Noda, Japan’s sixth prime minister in five years, will have to draw on his political skills to head off an intraparty rebellion.

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Japan’s Farmers Protest Free-Trade Pact Driving Tractors Through Ginza

In an upscale neighborhood where Japanese buy their handbags and smartphones, furious farmers drove their tractors down the main road last week in their latest protest against a controversial, regionwide free-trade pact.

The stunt was an illustration of the way the country’s agricultural forces are pushing up against modern glitz. As Japan nears a self-imposed deadline to decide whether to participate in the U.S.-backed Trans-Pacific Partnership, it must first resolve a clash between farmers who think the pact will ruin them and exporters who want to reach new markets with lower tariffs.

Nine other countries, including the United States, have committed to the agreement, which would eliminate tariffs and trade barriers within 10 years. In Japan, though, the prospect of across-the-board trade liberalization has roused fundamental questions about the nation’s shrinking economy — and which of its sectors, business or agriculture, need the most help.

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Japan is test case for Pac Rim free trade zone

As Asia-Pacific leaders committed themselves to achieving a Pacific-wide free trade zone at an annual summit Sunday, host Japan may prove a key test case for how realistic that vision is.

Acknowledging that Japan’s economic power is declining, Prime Minister Naoto Kan declared his country must open up its markets and embrace free trade — or risk getting left further behind other regional rivals.

"Japan is determined to reopen itself," Kan said at a press conference that wound up the Asia-Pacific Economic Cooperation forum, alluding to the historic role that Yokohama, which hosted the summit, played more than 150 years ago as one of the first Japanese ports to open up to the West.

That bold declaration represents a change for Japan, which for decades had been ruled by conservative administrations that were reluctant to engage in trade liberalization and were closely tied with farmers who fiercely oppose lowering protective tariffs. Imported rice, for example, is subject to a 778 percent tariff.

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Japan’s Farmers Opposed to Free-trade Talks

Atsushi Kono considers it the gravest threat to his family’s farm in a century of rice-growing: a free-trade initiative that could dismantle Japan’s sky-high protective farming tariffs, finally opening up the country to cheap, foreign produce.

In a move pitting Japanese farmers against the nation’s export industries, Prime Minister Naoto Kan is pushing to join negotiations for an American-backed free-trade zone called the Trans-Pacific Partnership that would span the Pacific Rim.

The new zone would give Japanese exporters of cars, televisions and other manufactured goods greater access to the United States and other markets. But a trade agreement could dismantle the generous protections that have sustained Japanese farms for years — most notably, Japan’s 777.7 percent tariff on imported rice.

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Japan to open up economy, with more Free Trade

Acknowledging that its global economic status is declining, Japan’s government is declaring it will work to "open up the country" and redouble efforts to forge free trade agreements to boost its economic prospects.

A policy paper released Saturday reflects Japan’s concerns that it is falling behind in forging free trade deals. It says Tokyo will work to wrap up pending negotiations with Australia and Peru, resume suspended trade talks with South Korea, and seek new talks with other countries or regions.

"If Japan’s trade and investment environment becomes less attractive than the environment in other countries, there is a possibility that future employment opportunities will be lost," the paper on comprehensive economic partnerships says.

The document, produced by a wide range of ministries, represents new government policy and will be formally adopted by the Cabinet this week, Noriyuki Shikata, a spokesman for Prime Minister Naoto Kan’s office, said Sunday.

The document was released ahead of an Asia-Pacific Economic Cooperation summit that Japan is hosting in Yokohama next weekend

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