Wednesday, November 9, 2011

Elsewhere in the free-trade debate...

While South Korean parliamentarians are debating the finer points of ratification of a free-trade agreement with the United States, folks in Japan are mulling over the merits and demerits — and the winners and losers — if their country were to become part of an envisioned Trans-Pacific Partnership. The APEC meeting in Honolulu that starts today has brought the issue to a head.

From The Japan Times:
If Japan joins the U.S.-backed Trans-Pacific Partnership free-trade agreement and tariffs on highly protected farm products are lifted, it would greatly benefit consumers by boosting imports and lowering product prices, a point often overlooked amid recent intensifying debates, experts said in a recent panel discussion.

They added, however, the question is whether the government can find the financial resources to compensate farmers who are likely to be most affected by the agreement.

"Many people say it is good that the current surplus increases and bad that imports increase. But that's not true," economist Nobuo Ikeda said during a Friday discussion in Tokyo, where experts from various fields both for and against the TPP gathered to discuss the controversial trade pact.
Japanese farmers, needless to say, are none too happy about the prospect of dismantling the high tariffs they enjoy on rice, wheat, and other foods.

From the AP via WaPo:
In an upscale neighborhood where Japanese buy their handbags and smartphones, furious farmers drove their tractors down the main road last week in their latest protest against a controversial regionwide free-trade pact.

The stunt was an illustration of the way the country’s agricultural forces are pushing up against modern glitz. As Japan nears a self-imposed deadline to decide whether to participate in the U.S.-backed Trans-Pacific Partnership, it must first resolve a clash between farmers who think the pact will ruin them and exporters who want to reach new markets with lower tariffs.
It should be noted that many in the Japanese government see participation in the TPP as a necessary means of restoring balance with Washington in the wake of the soon-to-be-fully-ratified Korea-US free-trade agreement.

When it comes to the KORUS FTA, NAFTA, the GTO, and things like that, I do find myself sympathetic with both sides. I think free trade can be very good, a win-win if it's on a level playing field. But at the same time there are industries — necessary industries — that because of who is in them or what they do, are utterly unable to compete. The kicker is that we may be far worse off if they're gone.

Would Japan be more secure and better off if its farmers eventually decided to close up shop and everyone imported cheaper rice from other countries? Perhaps not. Food security is a serious issue (and Korea bore the brunt of things when Imperial Japan decided to forcibly use Korea as its bread basket rice bowl).

I've always thought that a better situation would be to provide each country participating in some free-trade pact with a gimme or two. That is, each side can pick one or two representative or crucial items, particularly of a traditional or cultural nature, that are immune to the free-trade agreement, on which tariffs can remain up the wazoo if necessary. Korea and Japan would both have rice, I would imagine. My idea might fall apart, however, if the US insisted on automobiles (is that a traditional industry?).


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