KUALA LUMPUR: Japan is keen to spearhead the Trans Pacific Partnership 11 (TPP11) and also holds out its hopes that the United States will eventually find its way back to the grouping, said a senior economic adviser to the government.
“The TPP is a very important for us as it creates wealth for us and the government has worked hard with the private sector including the agriculture sector,” commented Professor Emeritus Motoshige Itoh, who is a senior adviser to Prime Minister Shinzo Abe.
Japan is prepared to wait patiently for the US to rejoin the grouping.
“So far our priority in TPP is for two reasons – it is important even without the US because it remains a high-level free trade agreement and, secondly, if we have a TPP11, it provides more opportunities for the US to come back whether during President Donald Trump’s administration or later,”he said at a media briefing today, after his lecture on Abenomics.
The chief negotiators of the TPP11 – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, are now having a 3-day discussion in Sydney on moving the talks forward.
Ito argued that trading economies have to be realistic about regional economic partnerships like the TPPA as long as the World Trade Organisation continues to be imbued with difficulties.
On the Japan EU Economic Partnership Agreement which was recently agreed in principle, Ito said the EPA was akin to the TPP as the talks covered areas beyond tariff reductions.
Earlier in his lecture on Abenomics, Ito spoke about the frustration of the government in stopping deflation despite the successful three-arrowed strategy to boost the economy through the monetary policy, fiscal stimulus and growth strategy.
“Abenomics remains successful and the performance of the economy over the last four quarters showed that there has been an obvious improvement ,”added Ito, who is the leading mind behind Abenomics.
Japanese corporations have been enjoying highest profits while labour market conditions have also improved with job-offer and job seeker ratio which was the highest in the last three decades.
“But prices and wages have not increased much and, since the peak 20 years ago, the economy continues to struggle with a slow growth pace.”
One of the areas which could boost growth sharply is investments by the private sector which currently hold a large savings stock.
He said the savings stock in the Japanese economy has ballooned over the past four years, contributing about 5.1 per cent or 27 trillion yen per year.
Ito said the Japanese growth strategy looks at realising the Fourth Industrial Revolution, increasing investment in new growth areas such as renewable and alternative sources, healthcare and education.
At the same time efforts have stepped up to mitigate the impacts of an ageing population through more active participation of women and the elderly in the labour force, having more foreign labour and also reforming the labour market.
On competition between China and Japan in Southeast Asia, he said “competitive influx’ was mostly on the infrastructure front as Japan has a stronghold on the automotive and electrical and electronics (E&E) industries.
“And, infrastructure (unlike the technology-related sectors) is more politically-influenced.”
Recipient countries will have to weigh whether it is the price or quality which is more important to them when awarding the projects, he added.