Trading Japan

Do you think Japan PM Taro Aso should negotiate a free trade deal with China and Korea?

Japan could economically benefit from free trade in East Asia as Japanese companies would have legroom to expand into other Asian markets like China (where their products are popular) and Korea (similar to China). This would mean increased profit for the Japanese companies and a stronger economy.

Politically, it would be a very bad move for Aso. Japanese consumers are very suspicious of Chinese imports after a string of scandals involving tainted food products, and any policy seen as going easy on China and allowing more potentially dangerous Chinese imports into Japan would be very unpopular with the general public, regardless of whether or not it would be good for business. The popular demand in Japan right now is for more regulation of trade, not less.

It would also be devastating to Japanese agriculture. Thanks to the high cost of land and the shortage of cheap labor in Japan, the only way domestic Japanese agriculture can stay competitive is if the Japanese government subsidizes domestic food and erects trade barriers to imported food. If there was a free trade agreement then the price of Chinese rice would be only a fraction of the cost of Japanese rice, and millions of Japanese rice farmers would lose their livelihoods.

Thirdly, it doesn’t seem like Japan would gain anything through free trade that it doesn’t have already. High-quality Japanese products are already available in Korea and China. Why would they need a free trade agreement when they’re already doing business there?

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