[ Keidanren ] [ Journal ]
Messages from "Economic Trend", October 2011

Pitfalls of Dualism

Akimitsu ASHIDA
Vice Chairman of the Board of Councillors, Keidanren
Chairman, Mitsui O.S.K. Lines, Ltd.

When an economic issue becomes politically charged, attention tends to focus on simplistic confrontation and the most important point of the discussion, i.e. the overall optimum balance of relevant interests, tends to be forgotten. In so many cases today, deadlock between yes and no creates paralysis.

Even in discussions of the Trans-Pacific Strategic Economic Partnership Agreement (TPP) in Japan, the dualism between the "domestic demand-oriented sector" and the "foreign (export) demand-oriented sector" dominates whether participation in TPP is right or wrong. This precludes any rational analysis regarding its economic effects, and quickly turns into a test of political will. This is a disservice to the economy and the nation.

This is not a matter to view simplistically from the viewpoint of dualism. We must recognize that both positions are related and fundamentally complement each other. For example, when the Great East Japan Earthquake disrupted the automobile parts supply chain and seriously affected automobile exports, manufacturers of auto parts for export have contributed to local employment and tax revenue through their operations. Why is it so difficult to visualize that these are directly or indirectly benefiting the agricultural sector in the same region while revitalizing their communities?

Looking at Japan as a whole, we are among the world's top five agricultural producers in monetary terms, and among advanced countries, we are second only to the United States. Our self-sufficiency ratio on a calorie basis for FY2010 remained at 39%, but reached 69% on a monetary basis. We can embrace this as a success—Japan has increased its national purchasing power backed by foreign demand and shifted to high-value added agricultural products. On the contrary, if we push the manufacturing industries that have benefited from foreign demand into a corner, we will see a rapid stagnation of regional economies, with no time for agricultural reform.

We strongly urge the government to make a wise choice, not by allowing TPP discussions to fuel debate between "protecting agriculture" and "ensuring international competitiveness of industries," but by qualitative assessment of the merits or drawbacks to the overall economy and individual industries.

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