Office of the United States Trade Representative submitted the 2013 National Trade Estimate Report on Foreign Trade Barriers to U.S. President Barack Obama and Congress. Concerning Japan, the report lists issues of concern in such sectors as automobile and insurance, the areas which are addressed in the preliminary negotiations between Japan and the U.S. on Japan’s participation in the Trans-Pacific Partnership free-trade talks. The report also includes demands which could go against the campaign pledges concerning the TPP that the Liberal Democratic Party made in the Lower House elections last year. The Japanese government should not allow the U.S. to interfere unjustly in internal policies.
The U.S. demand which could be inconsistent with the LDP’s pledges is the one related to the preferential handling procedure (PHP) certification system for imported cars. The system, aimed at facilitating imports of foreign cars, was introduced by the Japanese government in 1986 in response to U.S. requests. It allows 2,000 vehicles per vehicle type to be imported annually under a simpler and faster certification procedure. The USTR report calls for “equivalent opportunities” for imported cars, apparently asking Japan to increase the coverage of vehicles eligible for an incentive program for eco-friendly cars. The U.S., however, is said to have been demanding in the bilateral preparatory negotiations that Japan set a numerical target for U.S. car imports, like in the case of the U.S.-South Korea free trade agreement in which the two governments agreed on a de facto numerical target for South Korea’s imports of U.S. vehicles. It is necessary to closely watch the outcomes of the negotiations to see that they do not include clauses which go against the LDP’s pledge of rejecting any numerical targets on manufactured goods such as automobiles in the TPP negotiations. Moreover, incentives such as subsidies on eco-friendly cars are policies taken from environmental perspectives, and the U.S. has no right to twist its objectives.
As for the insurance sector, the report states that the U.S. government “continues to closely monitor” the Japanese government’s processing of applications for a new product submitted by Japan Post Insurance, apparently pressuring the company to refrain from selling new products. The report specifically refers to applications submitted by Japan Post Insurance and Japan Post Bank to offer a modified education endowment insurance product and new housing loan services, reportedly the first time the U.S. government mentions specific insurance products in an official document.
The Japanese government decides which applications to approve based on such criteria as each insurance firm’s capabilities to review insurance claims. The government must firmly object to and turn down unjust demands. Japan Post Insurance was expected to introduce a new education endowment insurance product in April, but failed to do so because it could not meet the conditions for authorization by the Financial Services Agency and the Ministry of Internal Affairs and Communications. Japan Post Bank was also forced to review its plan to offer new housing loan services as it was not approved by the agency. If these decisions have nothing to do with pressure from the U.S., it is a matter of course for Japan to assert the legitimacy of its system.
The 11 TPP participating nations, including the U.S. and Australia, are scheduled to hold a meeting of ministers in charge of the TPP in late April along with the ministerial meeting of the Asia-Pacific Economic Cooperation forum, and decide whether to let Japan join in the TPP talks. The USTR report can be seen as a tip of the horse-trading — in such areas as automobiles and insurance — between Prime Minister Shinzo Abe’s administration, impatient to get in the TPP talks as soon as possible, and the U.S. government which is eager to lure Japan into the negotiations being revealed. If the Japanese government allows unjust intervention in domestic affairs, it will be impossible to protect the national interests, as Abe insists on doing, and the national sovereignty will be rocked to its foundations. The government should disclose information in the Diet deliberations and other opportunities and adamantly refuse unreasonable requests.
(April 3, 2013)