The Yomiuri ShimbunMaintaining free trade is indispensable to the nation’s economic growth. Each political party should squarely face trade issues, the importance of which has been increasing.
With economic globalization, the interdependent relationships of countries have strengthened. The supply chains of the manufacturing industry have extended globally.
Disrupting this order is the administration of U.S. President Donald Trump, which has been advocating a protectionist policy. China, meanwhile, has been criticized over such practices as giving favorable treatment to its state-owned companies by providing subsidies and forcing technology transfers on foreign companies. U.S.-China trade friction is the biggest cause for concern for the global economy.
In its campaign pledge on trade policy, the Liberal Democratic Party has called for “conclusion of agreements on economic partnership and investment that are in line with the national interest.”
The Democratic Party for the People has put forth a policy of promoting “proactive and strategic economic diplomacy that would not allow for any compromise.” The Constitutional Democratic Party of Japan has laid out a goal of “seeking to maximize the national interest” in its basic policy without referring to it in its campaign promises.
The directions charted by their policies are compelling, but their drawback is a lack of concrete measures.
If the United States and China impose additional tariffs on all of each other’s imports, it will push down the world’s gross domestic product by 0.5 percent in 2020, according to an estimate by the International Monetary Fund.
Detailed strategy vital
The problem is not limited to U.S.-China trade friction alone. Washington will effectively impose quantitative restrictions on automobile imports from Mexico. This will force Japanese carmakers that have manufacturing plants in Mexico to reexamine their strategies. Concerns cannot be wiped out that impacts will expand to be greater than assumed.
To prevent the expansion of protectionism, making steady efforts to form free trade zones is more important than anything else.
Sixteen countries, including Japan, China, South Korea and India, aim to conclude an agreement within this year in their negotiations on a Regional Comprehensive Economic Partnership. Meanwhile, in addition to 11 countries that have already concluded the Trans-Pacific Partnership agreement, Britain and South Korea show interest in joining the TPP. The framework of the TPP should be expanded under the initiative of Japan.
Trade policy may not be a high-profile election issue, but is closely related to people’s lives. It has become possible to buy imported beef at low prices due to the enforcement of the TPP agreement. Tariffs on passenger car exports to Canada will be abolished. Benefits brought to consumers and firms are huge.
Some farmers, however, are being dealt a blow. Giving consideration to ill effects is indispensable.
Japan-U.S. trade negotiations are scheduled for after the House of Councillors election in July. Trump is in a hurry to conclude an agreement ahead of next year’s U.S. presidential election.
Holding cuts in tariffs on agricultural imports from the United States to the levels set under the TPP agreement and warding off punitive tariffs threatened by Trump on automobile imports from Japan: For these purposes, it is imperative to work out an elaborate strategy. The ruling and opposition parties are called on to deepen policy debate for the sake of protecting the national interest.