March 4(Friday)

The inaugural session of the "Opening of Japan" Forum: Why open up Japan now?

 

The 'Opening of Japan' Forum: The 21st Century Opening Up of Japan and Our Daily Lives was finally launched on February 26.

 

How should the government tackle the goal of "open up Japan to open up the future"? And how will opening up Japan impact our daily lives? Minister for National Policy Koichiro Gemba and other ministers and vice-ministers in the Kan Cabinet will consider these issues together with the public through discussions with experts from the business world and agriculture in various locations around the nation. We heartily encourage everyone to participate.

 

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At the first Forum, held in Saitama City on the 26th, Minister for National Policy Gemba, Senior Vice Minister of the Cabinet Office Tatsuo Hirano, and Senior Vice Minister of Finance Fumihiko Igarashi were joined by panelists Dr. Yasuyuki Todo, Professor at the University of Tokyo; Mr. Kanji Ochiai, President of Seibu Shinkin Bank; Mr. Yasuhiro Ogawa, Chair of the Gunma Prefectural Council of Agricultural Managers; Mr. Naoto Ohmi, Assistant General Secretary of the Japanese Trade Union Confederation; and Ms. Satoko Ito, a freelance journalist and visiting professor at the Graduate Institute for Entrepreneurial Studies.

 

Various points emerged in the course of the panel discussion, including that (1) it is necessary to incorporate Asian growth into Japan through the opening of Japan, and that Japan surely has a wealth of companies and farmers with great potential; (2) that the stable supply of food must not be sacrificed as a result of the opening of the country, and that comprehensive measures are necessary, addressing not only agriculture but also distribution; (3) carefully-crafted policies will be necessary, such as addressing uncompetitive sectors first by fostering competitiveness over time, with necessary assistance also to be given should that prove insufficient; (4) while the intensification of competition will cause some to be hard-pressed, the situation should be utilized as a springboard for various innovative approaches; and (5) Japan should strengthen economic partnerships with various countries in ways that increase the number of countries thoroughly implementing worker protection and environmental conservation.

 

A variety of views were also voiced by the members of the general public participating, including that (1) ensuring a steady supply of food is one of the most important roles played by the nation; when opening up the country, the government should explicitly lay out the path ahead for how it intends to bring it into actualization (views from a farmer); (2) living in China, one can feel the high potential for Japanese food (views from a university student); (3) discussions should be held after also clarifying the impacts to be felt by sectors other than agriculture (views from a farmer); and (4) Japan should provide education that will enable younger generations to spread their wings around the world (views from a woman who has been engaged in agriculture along with her husband since he retired).

 

Regrettably, some people were unable to participate in the Forum directly on account of the results of the lottery for seating. However, the suggestions received from the public at this Forum, along with the views submitted during the application process for seating, will certainly be used during future deliberations. Thank you very much for contributing your views.

 

In the weeks to come we will be holding sessions of this Forum in Sapporo, Sendai, Kanazawa, Nagoya, Osaka, Hiroshima, Takamatsu, and Hakata.

 

 

"Prime Minister Kan's Blog" will introduce across several installments how the Forum has developed in various locations around the country, along with the administration's way of thinking regarding this issue. This first installment explains, "Why open up Japan?" and related matters.

 

Agriculture and industry both facing tough times

Why is "the opening of Japan" such a high-profile issue at present? In the background to the opening of Japan coming under the spotlight are the issues facing Japanese society and the means for resolving those issues.

 

Currently, both agriculture and industry in Japan are confronting major challenges. The population of Japan is essentially not growing at present. In the future, as the population decreases, the number of consumers buying things will also decrease. There is the potential for declines in the volume of both food items and industrial products being sold in Japan.

 

Looking at local communities, it is clear that agriculture, industry, and the distribution and service industries do not operate in isolation from each other, but instead sustain the region as a single unit, with each being deeply interrelated with the others.

 

Yet, particularly in Japan's local areas, "places to work" in various localities are declining in number. Over the last ten years, the number of factories and other workplaces has decreased by as many as 220,000, with employment in manufacturing dropping by some 3 million. During this time, there has been a graying of the people engaged in agriculture (with an average age of 66) and there are not enough people to succeed these farmers. Over the past 15 years, agricultural income has halved. The number of people engaged in agriculture has declined from 4.1 million to 2.6 million, a drop of 1.5 million people.

 

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New markets extending all around the globe

Against such a backdrop, from a global viewpoint, we find that newly emerging countries such as China and India are experiencing rapid economic growth and increasing their presence in the world.

 

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According to some estimates, Asia's "middle class*" will expand by a billion people over the next decade, bringing the total to 2 billion. Ten years from now, the scale of consumption for Asia as a whole is seen as reaching three times the total consumption of Japan. Asia's "middle class" has the potential to be important customers buying Japanese products in the future. If tariffs are lowered through negotiations, it will enable Japanese goods to be exported on favorable terms.

*The term "middle class" as used here refers to people with a household annual disposable income of between US$5,000 and $35,000.

 

Negotiations thus far on lowering tariffs have taken place at the WTO, where nations all around the world have gathered, and Japan has been at the forefront globally in lowering tariffs. As a result, Japan's tariff rates on industrial products are at the lowest level of anywhere in the world.

 

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At the same time, with negotiations at the WTO having reached a standstill, recently there has been a considerable increase in economic partnership agreements (EPAs) and free trade agreements (FTAs), in which particular countries negotiate reductions in tariffs as well as rules governing trade and investment among themselves.

An economic partnership agreement grants special treatment only to interchanges among the countries that concluded the agreement. Therefore, if Country A concludes an economic partnership agreement (or a free trade agreement) with Country B and tariffs are lowered only on exports coming from Country A, then products exported from Japan to Country B will be at a disadvantage.

In particular, as competition with emerging economies becomes more severe, if only emerging economies conclude economic partnership agreements and enjoy the benefits of reduced tariffs, this could become an enormous drag on exports from Japan.

 

The shift towards a more inward-looking mindset

As we aspire to develop new markets extending all around the globe, another issue is that the mindset of Japanese is becoming more inward focused. The number of Japanese students studying abroad, which until recently had been increasing steadily, peaked in 2004 at just over 800,000, then began to decline in recent years.

Japan is still far from having human resources able to succeed in international settings in sufficient numbers to enable us to develop our markets overseas.

 

Four pillars for the 21st century opening up of Japan

In light of this, we will assimilate into Japan the vitality of Asia and other areas and aim to build a nation in which both the country as a whole and each local region become prosperous, with agriculture, industry, and commerce all thriving. That is the thinking behind the "21st century opening up of Japan."

Specifically, we will address the following four pillars in an integrated manner.

  1. Revitalize the food, agriculture, forestry, and fishery industries
  2. Foster human resources able to flourish internationally
  3. Improve the appeal of Japan as a place for economic activity
  4. Promote economic partnerships

 

The following installments will take up in specific terms measures related to each of these four pillars.

 

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(Website linked from this post is provided in Japanese only)



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