Hiroyuki Ishige was polite, but he didn’t mince words.
The chairman and CEO of the Japan External Trade Organization, which promotes mutual trade between Japan and the rest of the world, had traveled to Atlanta from New York on Oct. 20 to deliver his remarks at a Japan-U.S. Investment Partnership Forum.
Although he had plenty of good things to say about U.S.-Japan relations, and even better about Japan-Southeast relations, he couldn’t disguise his displeasure with the Trump administration’s undermining of the Trans-Pacific Partnership.
“…I am reluctant to say this, it seems that the policy of the current administration doesn’t fit with the trend of the times,” he told attendees at the forum held at Commerce Club in the 191 Peachtree Tower downtown.
He defined “the trends of the times” to mean the development of “supply chains” that have brought economies across the world closer together.
“As Japanese manufactures have invested into the U.S., and as products have grown high-tech, supply chains between our countries have grown complex,” he said. “We are no longer in an era in which most products can be made in a single country. For example, even the core components of automobiles often cross borders several times before final processing.”
The days of old when Japan acquired raw materials from other countries , manufactured the finish products in Japan, then exported those products to the U.S. market, are gone, he added.
Free trade areas facilitate the smooth transfer of products, services, funds, information and natural persons across borders, he said. And where the FTAs existed, companies have been able to create “much better products at more reasonable price. Of course they benefited consumers as well.”
He couldn’t evade a note of regret about TPP’s current situation. “As negotiations between members were already finished in October 2015” — with much of the work among participants being concluded in Atlanta — “there are likely no longer any big hurdles to be cleared.”
Now the tide has shifted. Vietnam, for instance, an enthusiastic member of TPP, considered the U.S. an essential member.
“Although Vietnam did not seem interested in a TPP without the U.S. Vietnamese Prime Minister Phuc said at a seminar in Tokyo this June that globalization is an inevitable process. He also made it clear to me directly in conversation. And Vietnam still endorses the TPP. (The Vietnamese people are very pragmatic and realistic.)”
So what now?
Mr. Ishige cited the discussions taking place among Japan, China, Korea, India, Australia and New Zealand in addition to the 10 ASEAN countries to create a Regional Comprehensive Economic Partnership (RCEP). The agreement doesn’t have the detail and ambition behind TPP, he said, but it does have the ASEAN’s backing because that regional bloc is celebrating its 50th anniversary.
And don’t forget, he added, that “China has a vision to use RCEP as a stepping stone to establish the Free Trade Area of the Asia-Pacific (FTAAP). Yes, “China has another grand vision,” he added, “the Belt and Road Initiative,” linking East Asia and Europe by land and sea routes to create a major economic zone.
Just so everyone understood, he added, “It seems China is aiming at further economic development by incorporating various regions of the world,” he said. “It’s an agenda consisting of two wheels: ‘the Belt and Road Initiative’ and the ‘global free trade network of RCEP or FTAAP.”
And to underscore his concerns and to make them crystal clear, he also said, “North Korea’s missile development poses a geopolitical risk to economic integration within the Asia-Pacific. It is conceivable that China will, with its two-wheeled growth strategy, play a leading role in creating a new order in Asia-Pacific.”
After making his thoughts regarding TPP perfectly clear, he went on to suggest that all of the seven Southeast’s states work together “to maintain and promote multilateral free trade frameworks. This will encourage Japanese companies to further invest in the Southeast.”
The full text of Mr. Ishige’s address can be found at the end of this article.
Two panel discussions followed his address. The first panel featured Japanese investments in Georgia and was composed of William Strang, president of Toto USA; Frank Windsor, chief operating office of Rinnai America and Michael School, vice president of the Georgia plant of the Hitachi Automotive Systems Americas.
The second panel featured Georgia investments in Japan and was composed of Fini Fukue, vice president, marketing and new business, the Coca-Cola Co.; Jennifer Moore, vice president for client services, Znalytics and Yusuke Hirayama, senior vice president, business development, NTT Docomo USA, Inc.
The forum closed with comments by Naoluki Maekawa, director, foreign affiliate support division, JETRO Invest Japan Business Support Center and Takashi Shinozuka, Japan’s consul general based in Atlanta.