Japan’s inclusion into the Trans-Pacific Partnership (TPP) negotiations would open a path for critical structural reforms and a revival of its economy, a Japan expert said during a Japan-America Society of Georgia luncheon Thursday, April 11.
As if right on cue, the White House approved Japan’s entry into the negotiations the next morning on Friday. All 11 nations involved have to approve Japan’s entry into the negotiations, but the U.S. decision marks a critical step in advancing the trade pact.
Upon hearing of the administration’s approval, Global Atlanta immediately put in a call to Nicholas Szechenyi’s office at the Center for Strategic and International Studies, the Washington think-tank where he is a senior fellow, to learn of his reaction.
Although unsuccessful in reaching him at the moment, his remarks at the luncheon held at the Federal Reserve Bank of Atlanta in Midtown indicate that he will be enthusiastic of this development for Japan’s economic future.
Mr. Szechenyi was one of three speakers at the luncheon where John Robertson, a senior monetary policy adviser at the Atlanta Fed, and Shigeru Hayakawa, senior managing officer of Toyota Motor Corp. also spoke.
Mr. Szechenyi described the recently elected Prime Minister Shinzo Abe’s proposed policy mix of easing monetary policy, providing fiscal stimulus and supporting infrastructure improvements.
Referring to the new economic strategy as “Abenomics,” and a “three-arrow policy,” he emphasized structural reforms as critical to the revival strategy of the world’s third largest economy.
“Trade liberalization is in Japan’s interest,” he said adding that the TPP negotiations would provide the fastest route toward increasing its integration into the global economy and providing it with an important role in setting the “rules and norms” regulating trade and finance.
If Japan enters the negotiations, it will be in a position “to shoot the three arrows in tandem,” he said.
The U.S. and Japan agreed to enter negotiations on the partnership despite opposition from Japan’s powerful agricultural interests and from some U.S. manufacturers and labor groups.
Japan must still win over Australia, Canada, New Zealand and Peru before it can enter the negotiations. Brunei, Chile, Malaysia, Mexico, Singapore and Vietnam already have approved Japan’s entry into the talks, which began in 2010 in an effort to further liberalize the economies of the Asia-Pacific region.
Mr. Szechenyi said that Mr. Abe needed the support of a majority during critical parliamentary elections to the upper house this summer to fully implement the reforms and counteract the deflation that Japan has endured for 20 years and its “political paralysis” since 2006.