Dead-end trade policy

Here’s a state­ment from the Japan­ese for­eign min­istry about the stalled nego­ti­a­tions of a free trade agree­ment with Mex­i­co: bq. “Agri­cul­ture is the stick­ing point. If the two sides can agree on this, then it’s rel­a­tive­ly easy for both Japan and Mex­i­co to reach a sub­stan­tial final agree­ment,” sai­da spokesman for Japan’s for­eign min­istry. (“Finan­cial Times”:http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1073281202823&p=1012571727102) The Japan­ese Prime Min­is­ter, Koizu­mi, declined to pur­sue a nego­ti­a­tion of a free trade agree­ment with Aus­tr­lalia ear­ly in 2003—although it had been pro­posed by his own For­eign Min­istry and endorsed by busi­ness groups on both sides—because he accept­ed the advice of the Japan­ese indus­try Min­istry (MITI) that an agree­ment with Mex­i­co (a NAFTA part­ner) was a pri­or­i­ty for Japan. He also feared that Japan would not be able to agree to open its food mar­kets to import com­pe­ti­tion from Aus­tralia. bq. Fail­ure to reach agree­ment with Mex­i­co after more than a year of talks has been a blow to Japan’s hopes of secur­ing its first eco­nom­ic part­ner­ship agree­ment that includes agri­cul­ture. Japan’s only EPA is with Sin­ga­pore, where agri­cul­ture is not a trade issue. (FT) Here’s a fear­less pre­dic­tion. One day, soon­er or lat­er, the Japan­ese will aban­don their unswerv­ing pol­i­cy of pro­tect­ing Japan­ese food pro­duc­ers and allow the inevitable adjust­ment to take place. Prob­a­bly it will be a local event that wakes them up: the sig­nif­i­cant­ly greater suc­cess of a more open Chi­nese econ­o­my. But by then …

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