Obama Meets with Shinzo Abe, Japan's New Prime Minister

Posted on March 5, 2013 at 7:03 PM

U.S. President Obama shakes hands with Japanese PM Abe in WashingtonJapan’s government debt could lead to economic opportunities for the U.S.  Japan's new Prime Minister, Shinzo Abe, recently met with President Obama for the first time to talk face-to-face about an ambitious program to revive his country's stalled economy.  Japan's unfortunate government debt, negative trade balance and other economic concerns may be pushing it towards free-trade negotiations with the United States. American officials have wanted to be able to trade with Japan because of it's potential to open up it’s isolated yet promising markets and to increase U.S.’s presence in Asia. The Prime Minister’s plan for economic restructuring is undefined but it is already controversial. The Japanese government's proposals for government stimulus spending have lead the International Monetary Fund to caution that its efforts could be short-lived and aren't the best way to tame the government's debt.

The Prime Minister’s plan to revive the Japanese economy has been given it’s own moniker,"Abenomics". The third arrow of "Abenomics" involves resuscitating the growth of an economy that is aging and, since the 2011 Fukushima nuclear complex disaster, confronts both rising energy costs and a potential migration of its industrial sites to places less prone to tsunamis and earthquakes. The combination of these pressures has created momentum to include Japan in the 11 nation Trans-Pacific Partnership negotiations; including Japan in these negotiations would encourage the Prime Minister to open several highly regulated local markets in return for the prospect of new investments and potential energy lifeline in the form of natural gas imported from the U.S. It is estimated that the 11 nations currently discussing the agreement comprise about 30% of the global economic output; adding Japan and possibly South Korea could bring that to 40%-- which would potentially set trading standards for powerful nations such as China and India.

Japan could be pivotal in spreading the U.S.’s influence to China, India and South Korea, which is part of the motivation in including Japan in the TPP talks. However, U.S. officials are asking for concessions upfront before they agree to let the Prime Minister and Japan join the talks. Since then, Japan has opened up the food market and is importing U.S. beef, for example. Joining the TPP would force Japan to open other parts of its economy as well-- health care, financial services and agriculture are among the few markets that could be opened up to breathe a little.

However, as the TPP talks have gone on and the Prime Minister is set to meet with the EU on March 25 in Tokyo, Japan is also setting its own terms of agreement. According to United Press International, in exchange for eliminating a fair amount of non-tariff trade barriers Shinzo is asking the EU to "eliminate its 10 percent tariff on imported vehicles to benefit the Japanese automobile industry". UPI also states "the European Commission estimates a free-trade arrangement would boost its exports to Japan by about 30 percent and create around 400,000 jobs in its member countries".

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