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Opinions toward the forthcoming TPP summit in Bali

September 26, 2013

Yoshiaki Fujimori
Chairman, Committee on the Promotion of EPAs/FTAs
Keizai Doyukai
(President & CEO, LIXIL Group Corp.)

Chief delegates and other negotiators of Trans-Pacific Partnership (TPP) member countries are working assiduously in a bid to bring their TPP negotiations to a successful conclusion by the end of 2013. By striking a TPP agreement, member countries are trying to establish a new economic order within the Asia-Pacific region. The envisaged free-trade agreements expected to bring about benefits not only to major business corporations but also to small- and medium-sized companies and people in member countries. The TPP is an indispensable trade framework for Japan if it is to achieve sustainable economic growth and enable people to enjoy more affluent lives at a time when the country is graying rapidly with a declining birthrate.

The TPP would eliminate and reduce tariff and nontariff barriers while promoting the standardization of rules and regulations, and harmonization of certification processes in the Asia-Pacific region. In view of the expected decline in necessary costs when a country responds to various trade rules and the expected decline in export-related clerical work, the TPP should produce a wide range of benefits to consumers. In addition, small- and medium-sized Japanese companies with highly advanced technological expertise should become able to meet overseas demand with their operation bases remaining in Japan.

There are not a few countries in the Asia-Pacific region where protection of investors and their assets is not ensured, laws relating to business licenses and permits are enforced in a discretionary manner, and rules on the terms and periods required for completion of various business procedures are not transparent. If these rules and laws are made fairer and their enforcement becomes more predictable and more transparent under the TPP, business corporations will become able to do business without any major worries in the Asia-Pacific region, the world's growth center. Investor-state dispute settlement (ISDS) is a provision that is covered by all of the 15 investment agreements and nine of the 10 bilateral trade agreements Japan has concluded. The provision is beneficial not only to foreign companies operating in Japan but also Japanese companies operating overseas.

Ensuring security in the field of energy is one of the highest priorities for Japan, a country scarce in natural resources. In recent years, many cases in which countries rich in natural resources have limited foreign access to such resources have been reported. Given the fact that rules on export tariffs are not stipulated under the World Trade Organization (WTO), establishing such rules under the TPP, as well as a framework that can guarantee the observation of these rules and rules on export restrictions, would contribute greatly to ensuring a stable supply of natural resources for Japan.

  1. Access to goods markets
    1. All the negotiating countries should aim for more than 98% tariff elimination with products exceptionally exempt from this step to be limited significantly
    2. Prohibition of export restrictions and clarification of rules on export tariffs (general abolition of export tariffs)
  2. Unification of rules of origin and procedures for issuing certificates of origin, and the establishment of accumulation rules in response to globalization of value chains
  3. Government procurement markets need to be opened as much as under the protocol amending the WTO's GPA
  4. Strengthening effective protection of high-level intellectual property rights, the scope of protection and enforcement of criminal sanctions against intellectual property right violations
  5. The need to create a competitive environment aimed at promoting fair competition so that all market participants can compete on an equal footing
  6. Investment: Ensuring the principle of national treatment, and banning demands made in some countries for implementing special measures and enhancing predictability and transparency regarding enforcement of rules for business permits and licensing
  7. Others
    1. International harmonization on standards and certification processes,and trade facilitation
    2. Establishment of institutional systems with an eye toward promoting multilateral trade liberalization

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