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Japan wants to become a part of the TPP free trade talks

in International Business

Japan wants to become a part of the TPP free trade talks

protestJapan wants to join the talks on the Trans-Pacific Partnership (TPP) with the hope it would help revive the Japanese economy.

The TPP is a trade agreement currently being negotiated among 11 countries: Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, United States, Singapore and Vietnam.

The member countries through the pact want to open up their economy for more trade in goods and services and boost investment flows. The pact is expected to substantially reduce tariffs.

Many in Japan have protested against the pact over the impact of TPP on its agriculture sector, amid fears that the pact may result in reducing tariffs on farm products.

Prime Minister Shinzo Abe, on the other hand, is pushing for joining the group.

“Emerging countries in Asia are shifting to an open economy one after another. If Japan alone remains an inward-looking economy, there would be no chance for growth,” said Mr. Abe.

He pledged to address the concerns about the country’s agriculture sector and that the government would ensure that it safeguarded Japan’s interests.

Japan’s decision to enter the talks comes at a time when its economy has been struggling to gain momentum.

Its growth has been hurt by a decline in demand for exports from key markets as well as a subdued domestic demand.

Analysts said that a trade pact such as the TPP would open up growth opportunities for Japanese businesses and give them easier access to these markets.

They added that the agreement may also prompt Japan to undertake reforms in key sectors, which are seen by many as vital to reviving its struggling economy.

“The plan of getting Japan moving and growing again, does not only depend on printing more money or on fiscal spending, but really depends on liberalising the economy,” said Martin Schulz, an economist at Fujitsu Research Institute in Tokyo.

“For that, TPP is a core part because it involves all sectors, from energy, to agriculture, insurances, the car industry as well.

“That would be a big step for Japan,” added Mr. Schulz

According to Mr Schulz, if Japan, the world’s third-largest economy, eventually joins the TPP, the group would account for nearly 40% of total global economic output.

“It would be a very, very big area and it would have a significant impact,” he said.

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