Asean
Can Nishikawa resolve Japan’s TPP agricultural impasse?
Author: Aurelia George Mulgan, UNSW Canberra
Japanese Prime Minister Shinzo Abe’s appointment of Koya Nishikawa as the new Minister of Agriculture, Forestry and Fisheries (MAFF) is a big plus for the Trans-Pacific Partnership (TPP). Nishikawa is an executive of the so-called ‘agricultural tribe’ (norin zoku) in the ruling Liberal Democratic Party (LDP). While this suggests to some that he will hold out to the last on the issue of opening Japan’s agricultural markets, Nishikawa may not act as expected.
Nishikawa’s appointment as MAFF Minister is a sign that the prime minister is serious about finding a way of resolving the TPP impasse. What Abe has done is essentially repeat what he did just after the LDP returned to power in December 2012. On 1 January 2013, he discussed how to prepare the party for participating in the TPP negotiations. The first person he telephoned was Nishikawa, whom he then appointed as chairman of the LDP’s TPP Affairs Committee. Abe’s strategy was to fight fire with fire, as he explained his move as ‘fighting tribe Diet members (zoku) with a tribe Diet member (zoku)’.
Abe spent much of his period in the political wilderness (between his first and second stints as prime minister) devoting his time to researching the personnel affairs of former prime ministers Eisaku Sato and Yasuhiro Nakasone who both maintained long-term administrations based on skilful personnel management. As a result of his research he found the ‘solution’ for dealing with the TPP. Abe decided to use an anti-TPP figure to suppress other anti-TPP members.
Nishikawa is well qualified for the task. As well as being a long-standing member of the LDP’s norin zoku he has previously represented the LDP in WTO agricultural trade negotiations. More importantly, he made a good impression on Abe when he was Senior Vice-Minister of the Cabinet Office in charge of postal privatisation under then prime minister Junichiro Koizumi. In that role, he used his considerable powers of persuasion to bring LDP Diet members who were opposed to privatisation on side. Then in his role as chairman of the LDP’s TPP Affairs Committee, he delivered for Abe by effectively coordinating the consensus in the party that enabled Abe to announce the decision on joining the TPP talks.
Nishikawa remained responsible for intraparty coordination on the TPP issue, which meant deciding the LDP’s TPP policy. For example, the TPP Affairs Committee determined which agricultural items should be exempt from tariff elimination in the TPP negotiations — the so-called ‘sacred five’: rice, wheat, beef and pork, dairy products and sugar. Its March 2013 resolution stated that Japan should pull out of the TPP negotiations unless it could retain the tariffs on these items.
As Abe’s trusted appointee, Nishikawa continued to act as the primary go-between for Abe on TPP issues and to report directly back to him as party president — saying ‘the prime minister gave me the role of keeping the party under control’. He gained a reputation for putting a lot of energy into moving the TPP negotiations forward in the interests of the prime minister. He ran foul of the anti-TPP group in the party by showing flexibility on the issue of abolishing tariffs on the five ‘sensitive products’ in Bali in October 2013. He told reporters that the LDP was planning to study the possibility of eliminating tariffs on some of the sensitive items.
Nishikawa also caused waves in the talks inside the LDP on reform of the Japan Agricultural Cooperatives (JA), going all out to support the LDP’s reform proposal and issuing a strong verbal rebuke to Diet member Yoshio Kimura who accused him (and others) of trying to use JA reforms to make up for the fact that they hadn’t done well on the TPP. He shouted at Kimura, ‘we are doing well [on the TPP]. What are you talking about, you juvenile’. When Nishikawa bumped into Akira Banzai, head of the Central Union of Agricultural Cooperatives (JA-Zenchu, JA’s independent administrative body) in May 2014, he said to him, ‘the JA is always complaining; can’t you show some appreciation?’.
In March 2013, the Nikkei reported Nishikawa as questioning whether the agricultural cooperatives had been a positive influence in the agricultural sector, and asserting that the government should implement drastic agricultural reform measures taking advantage of Japan’s participation in the TPP.
Nishikawa firmly believes that Japanese agriculture needs reform and that trade liberalisation is inevitable. In that light, he has been on a mission to find a middle way between the agricultural protectionist diehards on the one hand and those who support Japan’s entry into the TPP on the other. He wants to conclude the US–Japan TPP talks because he backs the TPP as being in Japan’s national interest.
Earlier this year, he reportedly said that ‘Japan will only accept numbers for tariff rates on sensitive agricultural products that will allow us to keep our promises with the people. Even if the United States adopts a hardline position, we will do just the same’. These remarks show that Nishikawa remains sound on political fundamentals but is flexible on details in order to move negotiations forward. He presents a tough face to both sides and is not afraid of confrontation. At this point, he is eager to conclude the TPP talks even if it means accepting tariff cuts on some of the five sacred products.
Reassured by Abe that his cabinet will protect Japan’s agriculture and farm villages in the TPP negotiations, Nishikawa has now been rewarded by Abe for taking a positive stance towards reform. He certainly disagrees with the new appointee to the party’s highest policy office, Tomomi Inada. She was once quoted as saying: ‘The destination of the TPP bus is the graveyard of Japanese civilisation’.
Aurelia George Mulgan is Professor at the University of New South Wales, Canberra.
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Can Nishikawa resolve Japan’s TPP agricultural impasse?
Asean
ASEAN weathering the COVID-19 typhoon
Author: Sandra Seno-Alday, Sydney University
The roughly 20 typhoons that hit Southeast Asia each year pale in comparison to the impact on the region of COVID-19 — a storm of a very different sort striking not just Southeast Asia but the world.
Just how badly is the COVID-19 typhoon thrashing the region? And what might the post-crisis recovery and reconstruction look like? To answer these questions, it is necessary to investigate the strengths and vulnerabilities of Southeast Asia’s pre-COVID-19 economic infrastructure.
Understanding the structure of the region’s economic house requires going back to 1967, when Southeast Asian countries decided to pledge friendship to one another under the ASEAN framework. While other integrated regions such as NAFTA and the European Union have aggressively broken down trade barriers and significantly boosted intra-regional trade, ASEAN regional economic integration has chugged along slower.
Southeast Asian countries have not viewed trade between each other as a top priority. The trade agreements in the region have been forged around suggestions for ASEAN countries to lower tariffs on intra-regional trade to within a certain range and across limited industries. This has lowered but not eliminated barriers to intra-regional trade. Consequently, a relatively significant share of Southeast Asian trade is with countries outside the region. This active extra-regional engagement has resulted in ASEAN countries’ successful integration into global value chain networks.
A historically outward-facing region, in 2010 around 75 per cent of Southeast Asian commodity imports and exports came from countries outside of ASEAN. This share of extra-regional trade nudged closer to 80 per cent in 2018. This indicates that ASEAN’s global value chain network embeddedness has deepened over time.
Around 40 per cent of ASEAN’s extra-regional trade is with the rest of Asia. From 2010 to 2018 Southeast Asian countries forged major trade relationships with four Asian countries: China, Japan, South Korea and India. Outside Asia, the United States is the region’s major trading partner. ASEAN’s trade focus on Asia’s largest markets is not surprising. Countries tend to establish trade relationships with large, geographically close, and culturally similar markets.
Fostering deep relationships with a few large markets, however, is a double-edged sword. While it has allowed ASEAN to benefit from integration in global value chains, it has also resulted in increased vulnerability to the shocks affecting its network connections.
ASEAN’s participation in global value chains has allowed it to transition from a net regional importer in 1990 to a net regional exporter in 2018. But the region’s deep embeddedness in a small and tightly-coupled network cluster of extra-regional global value chain partners has exposed it to disruption to any and all of its external partners. By contrast, ASEAN’s intra-regional trade network structure is much more loosely-coupled: a consequence of persistent intra-regional trade barriers and thus lower intra-regional trade intensity.
In the pre-COVID-19 period, ASEAN built for itself an economic house held up by just five extra-regional markets, while doing less to expand and diversify its intra-regional trade network. The data shows that ASEAN trade became increasingly concentrated in these few external markets between 2010 and 2018.
This dependence on a handful of markets does not bode well for risk and crisis management. All of the region’s major trading partners have been significantly affected by COVID-19 and this in turn is blowing the ASEAN economic house down.
What are the ways forward? The immediate task at hand is to get a better picture of the region’s position in global value chain networks and to get on top of managing its network risk exposure. Already there are red flags around the region’s food security arising from its position in food value chains. It is critical to look for ways to introduce flexibility into existing supply chains for greater agility in responding to crises.
It is also an opportune time for ASEAN to harness the technology transfer gains of global value chain participation and invest in innovation-driven diversification of products and markets. The region’s embeddedness in global value chain networks certainly places it in a strong position to readily access large export markets not just in Asia but also Europe and the Americas.
Over the longer term, ASEAN is faced with the question of whether it should seriously look…
Markets
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Access to the Singapore Exchange (SGX) adds to Tiger Brokers’ current menu of stock exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq Stock Market (NASDAQ), the world’s two largest stock exchanges, as well as the Hong Kong Stock Exchange (HKEX).
SINGAPORE (ACN Newswire) – Tiger Trade, a one-stop mobile and online trading application by Tiger Brokers, has launched access to the Singapore Exchange (SGX).
(more…)Asean
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To boost productivity in the future, Asian governments will have to implement well-targeted structural reforms today.
Asia has been the world champion of economic growth for decades, and this year will be no exception. According to the latest International Monetary Fund Regional Economic Outlook(REO), the Asia-Pacific region’s GDP is projected to increase by 5.5% in 2017 and 5.4% in 2018. (more…)
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