Japan looks set to pursue a twin-track strategy in Asian free trade negotiations, engaging in Trans-Pacific Partnership talks with the United States and other partners while exploring new frameworks being proposed by the Association of Southeast Asian Nations (ASEAN).
Prime Minister Yoshihiko Noda was asked about his economic diplomacy on Nov. 18 by reporters accompanying him to Bali for the East Asia summit.
"On the TPP, we have taken the position of entering into discussions with the relevant nations," Noda said. "Due to that move, discussions have accelerated regarding ASEAN plus three (Japan, China and South Korea) and ASEAN plus six (Japan, China, South Korea, India, Australia and New Zealand)."
He said careful attention to all of the proposed frameworks would be the only way to achieve the Free Trade Area of the Asia-Pacific (FTAAP), which was included in the final wording of the declaration from the Asia-Pacific Economic Cooperation forum summit hosted by Japan last year.
Japan regards the TPP as well as the ASEAN plus three and ASEAN plus six frameworks as alternative routes to realize the FTAAP vision.
Yukio Edano, the economy, trade and industry minister, told reporters in Bali on Nov. 18: "We must welcome the moves by Canada and Mexico regarding the TPP, as well as the accelerated pace of discussions for the ASEAN plus six."
Foreign Minister Koichiro Genba added that it was important the discussions on the two frameworks proceed in parallel.
A major issue facing Japan is how to deal with the emergence of China, which now boasts the world’s second largest economy. By showing an active interest in the TPP, which has been pushed strongly by the United States, Japan is hoping to use Chinese concerns about the United States gaining an upper hand in any Asian framework to encourage Chinese concessions.
A high-ranking Foreign Ministry official said: "What we are ultimately seeking is an economic partnership of a high level that also includes China."
However, there is concern about the delicacy of the task ahead, with Japan trying to pursue its own economic diplomacy and balance the United States and China’s differing agendas.
Another high-ranking Foreign Ministry official said recent developments would make it even more difficult to maintain a proper distance from China, and some experts have also raised concerns about Noda's diplomacy, particularly his initial emphasis on the TPP talks.
A lawmaker from the opposition Liberal Democratic Party, who specializes on economic issues, said: "He should have begun economic integration with Asia, where the hurdles for removing tariffs would be much lower. To begin with, the economic benefits would be higher in Asia."
The Research Institute of Economy, Trade and Industry has estimated that joining the TPP will only bolster Japan’s gross domestic product by 0.54 percentage point in 10 years, while joining the ASEAN plus six framework, including the huge and growing markets of China, India and Indonesia, could increase Japan's GDP by 1.1 percentage points after 10 years.
(This article was written by Ai Matsumura and Takeshi Kamiya.)
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