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Executives' Comments  Press Conferences Chairman Sakakibara's Statements and Comments
at His Press Conference

March 26, 2018

US Trade Policy

Last week the US government announced two trade measures. The first was a decision to take action against China based on Section 301 of the US Trade Act, on the grounds of unfair trade practices relating to intellectual property. This is an issue between the US and China, and Keidanren will monitor it closely. On the other hand, the problem is not limited to the US, and Japanese companies also complain about infringements of intellectual property rights. Essentially such disputes should be addressed according to WTO rules. Unilateral action such as that taken under Section 301 of the US Trade Act could trigger countermeasures from the target country. China is now indicating its intention to take such measures. If these moves escalate, they may develop into a trade war. I fear that this kind of situation could have a major impact on the global economy.

The second measure was to impose tariffs on steel and aluminum imports, which also apply to Japan. This measure could have serious effects on world trade in steel and aluminum. If other countries take countermeasures, the dispute may extend beyond steel and aluminum to affect other industries, which could have an impact on the entire global economy. Keidanren will keep a careful watch on developments. We will strongly urge the Japanese government to seek an exemption from the US government. Some commentators have suggested that one of the reasons for South Korea being exempted while Japan has been targeted is that Japan does not have a free trade agreement with the United States, but US intentions are unclear. I hope that the government will take opportunities such as the Japan-US summit scheduled for April to clarify the situation. I remain convinced that bringing the TPP 11 agreement into effect is a priority.

These trends prompted a sharp fall in stock prices last week. Analysts noted that markets were reacting to background events including protectionist actions invoked by the US that could affect the global economy, risks associated with expansionary fiscal policies in the US, and a series of key personnel changes in the US administration. Keidanren will continue to closely observe market trends, but economic fundamentals have not altered and remain firm. We will seek to discern whether current trends are merely temporary, or if they will change the course of events significantly.

Moritomo Gakuen Scandal

Approval ratings for the Abe administration have dropped sharply, and the Moritomo Gakuen Scandal has undeniably had an impact. However, the fact remains that this administration has made great strides in both internal and external affairs. I hope it will strive to gain public understanding by carefully and convincingly explaining the Moritomo Gakuen issue. Such explanation is likely to restore the administration's approval ratings, and this would be a desirable outcome.

From a public records management perspective, alterations to approval documents are inexcusable. Such conduct is even more serious when it involves intentionally altering documents submitted to the Diet, which is responsible for making laws. This scandal has seriously undermined public trust in government, and attention has turned to the summoning of Nobuhisa Sagawa, the former head of the Finance Ministry's Financial Bureau, to testify before a Diet committee. Many people have doubts about who issued instructions for public records to be altered, why this was done, and how they were altered. A key focus of these doubts is whether politicians and those related to them had excessive involvement in the sale of state land. I hope that testimony on this point will convince the public.

National government officials have a duty and mission to support politicians and implement policy for the sake of the people. I believe that most officials fulfil their duties with this sense of mission. I hope that when Mr. Sagawa testifies tomorrow, his testimony will return to these fundamentals and restore public trust.

Constitutional Reform

Broad-based public understanding and support are prerequisites for progress in discussing constitutional reform. The Liberal Democratic Party recently released draft amendments to the constitution. Formation of a popular consensus will require a basis for discussion, and this is a specific proposal prepared for such purposes. The draft sets out revisions relating to four items: the self-defense force, states of emergency, abolition of the system for upper house elections in which two prefectures are combined and become one constituency, and enhancement of educational opportunities. I understand that all of these matters are necessary to people's lives and national security. Progress in discussions and the presentation of draft revisions are the first step toward constitutional reform. Considering the timing of such reform, however, the most important step at present is to fully explain issues surrounding Moritomo Gakuen and restore public trust in government and politics. The government faces a host of domestic and international issues, including economic revitalization, North Korea, and US trade policy, and I urge it to prioritize the economy. Keidanren has not discussed the constitution since its deliberations on the issue last summer. We have not yet reached the stage of compiling specific ideas on the constitution.

Executives' Comments