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Korea-U.S. FTA Shocks Japan

Posted April. 04, 2007 07:55,   


Japan is in shock at the news that Korea and the U.S. have agreed to an FTA.

Japanese newspapers dealt with the news seriously, spending a lot of space on it on April 3.

The Asahi Shimbun carried an editorial, “Japan is next,” and Nihon Keizai Shimbun printed an editorial saying, “Japan can do it, too.”

They urged the Japanese government to learn lessons from the Korea-U.S. FTA agreement and be active in negotiating an FTA with Korea and the U.S.

Until now, Japan could not even discuss an FTA due to strong opposition from domestic businesses to opening the agricultural and marine products markets. However, more and more Japanese people are now thinking that an FTA is necessary thanks to the Korea-U.S. FTA.

Meanwhile, Japanese economic experts worry that once the Korea-U.S. FTA takes effect, Korean products, which will receive preferential treatment such as tariff elimination, would instantly have price competitiveness in the U.S. market and against Japanese cars and household electronic appliances.

Also, some worry that if Japan loses its market share to Korea in the U.S., Japan’s biggest export market, its domestic business conditions which are taking off after overcoming its so-called “lost ten years” could be dampened.

Shujiro Urata, a graduate school professor of international economics at Waseda University, expressed concerns over a situation where Japan is falling behind in FTA trends, saying, “It seems that Korea may go into FTA negotiations with the EU, too, driven on by its success with the U.S.”

However, Japan is glad that rice was excluded from the agreed Korea-U.S. FTA. That is because they think that that could be a good precedent on negotiations related to tea that have been the biggest barrier to a U.S.-Japan FTA, due to farmers’ opposition.