Tearing down the trade barriers surrounding its faltering economy will mean "pain and suffering" for Japan, Prime Minister Naoto Kan warned Sunday as he concluded a Pacific Rim summit.
As host of the 21-member Asia Pacific Economic Co-operation (Apec) group - which includes the United States, China and Russia - that Sunday set the goal of a region-wide free trade zone, Japan's vow to open up is in the spotlight. The grouping also vowed to resist the forces of protectionism as the world recovers from a painful downturn, and maintain the region's role as a key growth engine.
In contrast Japan has faced criticism for protecting its inefficient farm sector and especially its cherished rice farmers, but now says it is intent on making reforms. "Japan will be opening up," Kan said as he closed the summit. But "opening up the country will entail pain and suffering," he warned. "First we have to reform agriculture in Japan and take specific steps to improve it."
Kan's government is edging towards a US-led plan to widen a regional free trade treaty known as the Trans-Pacific Partnership (TPP), but has deferred until June a decision on whether to join talks on membership.
It is currently at war with itself over whether to join the pact, with the trade ministry in favour but the agriculture ministry opposed, fearing that cheap imports would decimate a farming industry badly in need of vitality. "The average age of Japanese farmers is nearly 66 years old," said Kan, adding he sought to "engage younger generations in helping more people consider careers in agriculture."
Japan, citing food-security and cultural reasons, has long protected its now highly inefficient rice farmers against imports of cheaper grain from big producers such as the United States, Australia and Vietnam. It has slapped a near 800 percent tariff on imported rice and up to 250 percent on wheat imports. These would disappear under a TPP, prompting around 3,000 angry protesters to converge on Tokyo last week against the pact. But analysts say reforms are needed as the nation struggles to overcome deflation, a shrinking population, a mountain of public debt and the impact of a surging yen on a fragile economic recovery.
Kan has warmed to the symbolism of airing his new approach in Yokohama, where 151 years ago Japan made the monumental decision to open itself to commerce with the outside world after two centuries of self-imposed isolation.
But aside from Sunday's pledge towards more "concrete" actions, APEC has made little headway in creating an envisaged free trade zone across the Pacific Rim region. The TPP initiative backed by US President Barack Obama is gaining momentum however, and Japan's attendance at talks to form an Asia-wide trading pact on Sunday was seen as a positive step. The TPP is seen as a vital building block for a Free Trade Area of the Asia Pacific (FTAAP) that would link economies from China to Chile and the United States but currently remains an undefined and long-term goal. It so far has just four signed-up members - Brunei, Chile, New Zealand and Singapore - who have agreed to drop most tariffs and other trade barriers. The world's largest economy, the United States, is now in talks to join the group, as are Australia, Malaysia, Peru and Vietnam.