Policy Proposals Asia and Oceania
Keidanren Mission to Australia and New Zealand
Mission Leader's Observations
March 21, 2014
For Japan's sustained growth, it is essential that we move forward with economic integration and pursue improved levels of stability and affluence in the Asia-Pacific as it is a region with which Japan has close economic ties and a region expected to continue demonstrating strong growth in the years ahead. Australia and New Zealand are two advanced nations with which we share fundamental values including the principles of democracy and the rule of law. Both are also leading producers of natural resources, energy, and food. Accordingly, strengthening our ties with these two countries will be crucial not only within the economic context but also in terms of foreign relations, regional security, and other dimensions of Japan's national strategy. Both have become important partners in the drive to create the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP).
This was the awareness behind a 46-member Keidanren mission including chairman of the Board of Councillors Fumiaki Watari, eight vice chairmen as well as two vice chairmen of the Board of Councillors that toured Australia and New Zealand from March 16 to March 22 for meetings with top government officials and business leaders in both countries. Members of the mission briefed on Keidanren's position on economic integration in the Asia-Pacific region and efforts being made to that end, and appealed for an early conclusion to negotiations on the TPP and an economic partnership agreement (EPA) between Japan and Australia. On the question of fostering the economic integration of the Asia-Pacific, government and business leaders in both countries voiced strong expectations toward the leadership and political judgment of top government officials in Japan. Furthermore, members of the Keidanren mission engaged in a mutually constructive exchange of views and opinions on fields amenable to broader and deeper ties of economic cooperation, including resources, energy, the environment, and infrastructure.
As the mission's leader, I would like to reflect on some of my observations regarding these matters below.
1. Promotion of Economic Integration of the Asia-Pacific Region
During the mission's meetings in the two countries, we sought to explain that the Japanese economy had moved into a steady and sustained recovery and begun to escape from its deflationary spiral as a result of economic revival policies enacted by the second Abe administration. Additionally, we conveyed that business leaders in Japan have placed importance on promoting economic partnership and especially an early conclusion to TPP negotiations as a step toward implementation of the growth strategy that represents the third arrow of the Abenomics program. Further, we explained that as part of its policy to secure its path to sustained growth, Japan planned to utilize an agreement on the TPP as leverage for achievement of an RCEP, thus setting the stage for creation of a Free Trade Area of the Asia-Pacific (FTAAP) by 2020 and harnessing the vitality of the fast-growing Asia-Pacific region.
Government and business leaders in both countries voiced high hopes for the success of Abenomics and were of the view that this achievement would be essential to the sustained economic growth of their countries as well as the Asia-Pacific region as a whole. In particular, the current government administrations in both countries have been moving forward with policies of their own that resemble the growth strategy known as the third arrow of the Abenomics program, thus illustrating their attention to the serious drive in structural reform Japanese Prime Minister Shinzo Abe has put into motion.
On the subject of promoting economic partnership in the Asia-Pacific region, government and business leaders in both countries clearly favored strategic initiatives aimed at creating an FTAAP by 2020 and staking the future of their countries on the TPP, RCEP, and related partnership arrangements. This convinced me that we all shared common goals. Our understanding was that cooperation with both countries will be a must for the early conclusion of TPP and other negotiations and ultimately the achievement of a comprehensive, high-level agreement.
New Zealand Prime Minister John Key noted that to his country, the TPP would have a dual dimension of importance—as an FTA both with the US and with Japan. In view of the current state of negotiations, NZ Trade Minister Tim Groser and other economic ministers were hopeful that bold decisions at the summit level would bring about an early settlement.
Australian Prime Minister Tony Abbott expressed strong hope for the conclusion of an EPA between Australia and Japan, and declared that an EPA would have the effect of expanding the level of Japanese investment in Australia and, in the process, contribute to even better bilateral ties. Australia's Minister for Trade and Investment, Andrew Robb, shared the view that if a high-level agreement on a Japan-Australia EPA can be reached, it would serve as a signal showing Japan's determination to other countries in the TPP talks and improve prospects for the acceleration of TPP negotiations.
2. Strengthened Trade and Investment Ties with Both Countries
As leading producers and exporters of natural resources, energy, and food products, both countries have established mutually complementary ties with Japan and have built those ties on a foundation of trust cultivated over many years. Nonetheless, government and private business leaders in both countries have expressed strong interest in taking those ties with Japan to a higher level and expanding them into new areas for cooperation.
The Japanese and Australian sides shared similar views regarding the necessity of an early conclusion to talks on an EPA as a foundation for elevating Japanese and Australian ties to a higher level. Prime Minister Abbott is scheduled to visit Japan in April and Prime Minister Abe plans to visit Australia at a later date, and both sides have expressed hopes for conclusion to negotiations on an EPA between the two countries. Australian Trade and Investment Minister Robb noted that his country is prepared to move forward in negotiations on investment and the trade in automobiles and automotive components but conversely also expressed the view that Japan would need to show more initiative in talks on beef and other farm products.
As new areas for cooperation, Australian Minister of Industry Ian McFarlane proposed collaboration with Japan in value-added high-tech industries and areas of science and technology. Keidanren mission members proposed cooperation on clean coal technologies, coal-fired power generation, carbon capture and storage (CCS), hydrogen fuel, and other resource and environmental fields and their Australian counterparts showed interest in those ideas.
2.2 New Zealand
Both sides presented proposals for cooperation in areas ranging from geothermal power generation and other renewable energy fields, environment and energy conservation, gas exploration and other resource and energy fields to tourism and—as two countries experienced with earthquake disasters—safety-oriented urban development. Citing successes (namely, in the wine industry and dairy farming) that derived from the liberalization of their country's agricultural sector, New Zealand side also tendered proposals to assist Japan with structural reforms in the agricultural field.
3. Heightened Human and Cultural Exchange and Strengthened Ties of Cooperation in Science and Technology
Close economic ties with Australia and New Zealand have fostered heightened levels of interpersonal and cultural exchange and stronger ties of cooperation in the spheres of science and technology and set the stage for the expansion of bilateral ties on multiple levels. In its meetings with government and business leaders in both countries, the Keidanren mission presented ideas for the promotion of exchange in the fields of tourism, foreign exchange study, and professional training.
Japan's ties with Australia in recent years have continued to strengthen in the dimensions of foreign relations and security. Foreign Minister Julie Bishop gave Japan high marks for its involvement in disaster relief, humanitarian assistance, and peacekeeping operations in the Asia-Pacific and expressed hope that cooperation between our two countries would continue to deepen in the years ahead.
On the New Colombo Plan that Australia has launched as an initiative to expand ties with the rest of the Asia-Pacific region, Foreign Minister Bishop explained that her country had set up scholarships for Australian students interested in pursuing study in other countries of the region as well as programs that provide students with opportunities for corporate internships while continuing with their university studies. This year, 2014, has been designated a pilot year for the plan with Japan and three other countries selected as destinations for foreign exchange study. Keidanren is ready to cooperate with this initiative upon request.
During the Keidanren mission tour of Australia, we attended an event commemorating the 25th anniversary of the National Science and Technology Centre (known as Questacon) in Canberra as representatives for the Japanese business community. When Questacon was built, the Japanese government and Keidanren together donated half of the total in funding for its construction. Currently, it is known as Australia's biggest center for science education and has earned strong acclaim for its contributions to the country's pool of talented scientists and researchers. This year, Questacon teamed up with Japan's National Museum of Emerging Science and Innovation (Miraikan) to co-sponsor a Science Circus Tour through districts ravaged by the recent earthquake disaster in Japan's Tohoku region. In terms of fostering exchange with Japan in the field of science education, Questacon fulfills a core role. Keidanren hopes to provide continued cooperation with an eye to expanding the level of exchange in this field.
3.2 New Zealand
The Christchurch Earthquake in New Zealand and the Great East Japan Earthquake struck at almost the same time. During that difficult period, we nurtured stronger bilateral bonds through the reciprocal deployment of disaster rescue teams to each other's countries. In our meetings with our counterparts in New Zealand, we reconfirmed the importance of sharing our experiences with earthquake disasters and working together with private sector participation in undertakings in earthquake reconstruction, disaster prevention, and safer urban development.
In the interest of fostering heightened exchange in the arenas of sports and culture, we were in consensus with our New Zealand counterparts on promoting bilateral exchange at the corporate level with attention to the upcoming Rugby World Cup in Japan in 2019 and the Tokyo Olympic Games in 2020.