Japan should join TPP to boost reconstruction
Realizing economic growth by expanding free trade is not only crucial for the nation's future but is also indispensable for reconstruction after the Great East Japan Earthquake.
The government should promptly decide to join the Trans-Pacific Partnership agreement, which is currently being negotiated among nine countries, including the United States and Australia.
The guidelines that the government will soon finalize for the country's economic policy after the March 11 disaster are expected to use such vague expressions as "the government will comprehensively discuss the timing of participation in the [TPP] negotiations."
Before the March 11 disaster, Prime Minister Naoto Kan pledged to the international community that Japan would decide on whether to participate in the TPP around June, touting the "opening up of the nation in the Heisei era." However, by adopting such language in its guidelines, the government is apparently just putting off its decision on the TPP.
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Don't block development
Won't this delay nip the growth of the Japanese economy in the bud? The government should resume its study on participation in the TPP, which has been suspended due to the disaster, and speedily establish a nationwide consensus on the matter.
The nine countries are accelerating the TPP negotiations on such issues as eliminating tariffs, seeking to reach a broad agreement around November.
June is the absolute limit for announcing Japan's participation in the TPP. If the decision is delayed, Japan will be unable to join in the negotiations and could be forced to accept unfavorable trade and investment rules in the future.
Some people in the government apparently think they are too busy now for anything like the TPP and seem to be defensive regarding free trade, but the importance of the TPP remains unchanged even after the March 11 disaster. For Japan--which has a declining birthrate and a graying population--to continue to grow, it is important to benefit from the vitality of other Asian countries through the promotion of free trade.
Japan should map out measures to revitalize the economy that would give a boost to post-disaster reconstruction as well as prepare the nation for trade liberalization. Participation in the TPP should be their foundation.
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Make Tohoku region model
The disaster-hit Tohoku region is a prosperous agricultural area. We suggest the government implement bold agricultural reforms, using the region as a model.
Productivity would be substantially improved if agriculture became more large-scale by consolidating farmland into core farms. It is also necessary to ease regulations to encourage companies to enter the agricultural business as well as to implement measures to attract young people into the agricultural industry to replace aging farmers.
The government should make the country's agriculture strong enough to endure trade liberalization by expanding such efforts to other parts of the country.
The TPP is also crucially important to increase exports of industrial products and prevent domestic industries from hollowing out.
In addition to the negative impact of the March 11 disaster, industrial circles also are facing a rising yen and power shortages. A senior official of Toyota Motor Corp. suggested that the company may have to scale down its domestic production, saying the current situation "is beyond the limit of one company's efforts."
We must strengthen the country's competitiveness by utilizing the TPP to prevent manufacturing in Japan from being put at a disadvantage.
Obama's reelection hinges on state of U.S. economy
U.S. President Barack Obama has launched a campaign to be reelected in the presidential contest scheduled for November 2012.
Obama announced his intention to seek a second term early--at the beginning of April--and has embarked on a fund-raising drive for the election. Fully utilizing the strength of such recent means of communication as the Facebook social networking Web site, Obama has set a goal of raising 1 billion dollars (about 81 billion yen) in campaign funds, an unprecedented figure in U.S. politics.
Obama's approval ratings, earlier languishing at less than 50 percent, shot up to nearly 60 percent after the announcement in early May that U.S. commandos had killed Osama bin Laden, the Al-Qaida terrorist leader said to have masterminded the Sept. 11, 2001, attacks on the United States.
Obama appears to be off to a good start in his election campaign.
Two members of the opposition Republican Party, one of them former House Speaker Newt Gingrich, have declared they will run for president. It appears that with the grass-roots Tea Party movement wielding strong influence within the Republican Party, the party will have difficulty ironing out differences between conservatives and moderates.
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Business recovery key
Most important in determining the outcome of the election will surely be the state of the U.S. economy.
Obama won the 2008 presidential race amid the global financial crisis under the electoral banner of "change." The upcoming contest will focus on the extent to which Obama has fulfilled his election pledge to bring about a "rebirth of America."
The Federal Reserve Board has said the economic recovery in the United States is proceeding at a moderate pace, and decided to cease at the end of June the central bank's quantitative monetary easing policy of purchasing huge amounts of treasury bonds.
The unemployment rate, however, has remained high at around 9 percent while gasoline prices have hardly dropped, partly due to political turmoil in the Middle East.
Obama's success in gaining reelection appears to hinge on whether he can improve the labor market and attain a significant economic recovery.
The U.S. federal deficit for this fiscal year is expected to top 1 trillion dollars for the fourth year in a row. Success or failure in trimming the deficit will be key to Obama's reelection bid.
During the mid-term election campaigns last year, the Obama administration was criticized for such elements of his reform agenda as overhauling the U.S. health care system, which skeptics claimed will lead to so-called big government and tax increases. As a result, the Democratic Party suffered a crushing defeat in the elections, with the party's strength falling below a majority in the House.
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Cuts in deficit a hard job
After the midterm elections, Obama agreed to continue for the time being a large tax reduction introduced by his predecessor, George W. Bush. This policy switch represented a compromise with the Republicans, but slashing the budget deficit has been increasingly difficult because of falling tax revenues.
Obama's decision to cut defense spending is part of attempts to cut the deficit.
About 20 years ago, President George H.W. Bush, the father of George W., was proud to have approval ratings of nearly 90 percent because of the U.S. victory in the Gulf War. But his public support later nosedived due to an economic downturn, resulting in his defeat to Bill Clinton, who campaigned under a pledge of giving top priority to restoring the U.S. economy.
Even though Obama has achieved results in the war against terrorism, it cannot be denied that he will follow in Bush Sr.'s footsteps if he cannot find ways to keep the U.S. economy afloat and ensure the rebuilding of U.S. government finances.
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