Japan’s top government spokesman has expressed concern over prospects for the nation’s exports to the United States after the US Congress on Wednesday approved a free trade agreement with South Korea.
”We need to watch very carefully” the impact of the US-South Korea FTA on Japan’s exporters such as car and electronics makers, chief cabinet secretary Osamu Fujimura said at a press conference.
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His remark came amid growing fears that the free trade pact between Washington and Seoul could put Japan’s export-oriented companies at a competitive disadvantage against their South Korean counterparts in the US market as Japan does not have an FTA with the United States, Kyodo News noted.
”Japan will (also) pursue higher-level economic partnerships” with other countries, Fujimura said.
On whether Japan will participate in the US-led Trans-Pacific Partnership trade talks, Fujimura said, ”We haven’t changed our stance that we will reach a decision on the issue at an early date.”
According to an estimate by Japan’s Ministry of Economy, Trade and Industry, the country’s exports to the United States in the automobile, electronics and machinery sectors are expected to fall by JPY1.5 by 2020 as South Korean exports to the United States in these sectors rise.
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By GlobalDataThe South Korean parliament is expected to approve the free trade pact with the United States possibly by the end of this month.
Congress on Wednesday salso approved FTA deals with Colombia and Panama – the first trade agreements to pass Congress since Democrats broke a decade of Republican control in 2007, according to the New York Times.
The economic benefits are projected to be small, the paper said. A federal agency estimated in 2007 that the impact on employment would be “negligible” and that the deals would increase gross domestic product by about US$14.4bn or roughly 0.1%.
Proponents of the trade deals predict that they will reduce prices for American consumers and increase foreign sales of American goods and services, providing a much-needed jolt to the sluggish economy, the paper said.
Increased protections for American automakers in the South Korea deal won the support of traditional opponents of trade deals, including some Midwestern Democrats and the United Automobile Workers union, the NYT added.
Economists generally predict that free trade agreements, which eliminate tariffs and other policies aimed at protecting domestic manufacturers, benefit all participating nations by creating a larger common market, increasing sales and reducing prices. But such deals also create clear losers, as workers lose well-paid jobs to foreign competition.
The White House and Republican leaders said that the three agreements would provide a big boost to the lagging American economy and put people back to work.
