Monday, December 16, 2013

Disagreements Between US and Japan Stall TPP Negotiations

Last week the Trans-Pacific Partnership (TPP) trade ministers met in Singapore and, as had been anticipated, failed to conclude even a “framework” or “outline” agreement.  However, they declared in a joint statement that they engaged in actual negotiating and made significant progress, having determined “landing zones” for some of the contentious issues which they will now direct their negotiators to work out in detail. The ministers did not set a new time table for conclusion of a full or a framework agreement, though many assume that they will aim to have an accord completed by the time President Obama travels to Asia in April.

Sunday, December 15, 2013

The Third Arrow: An Overview of Necessary Structural Reforms and How They Would Help Abenomics Succeed

Abenomics, which has received a lot of press since it was revealed by Prime Minister Shinzo Abe in early 2012, has three “arrows” – monetary stimulus, a temporary fiscal stimulus, and structural reforms. In April 2013, the Bank of Japan announced the first two actions under Abenomics – a stimulus of ¥10 trillion and an inflation target of 2%. While the first two arrows seem likely to hit their targets and bring intended results, vested interests will continue to oppose the major structural reforms that make up the third arrow, which includes the deregulation of, and foreign direct investment (FDI) in, service sectors; trade liberalization; labor market reforms; and relaxing barriers to immigration.

Japan's Finance Ministry aims for structural reforms that will increase the growth of gross domestic product (GDP) from 0.8% per year to 1.5%. From an economic perspective, there is much that can be done in the area of structural reform. Political opposition will be strong and could undermine the reforms necessary to raise growth faster than current estimates. Nevertheless, the chances that Japan will pursue serious structural reforms are higher than they have been for a long time.

There are two main objectives for reform: (1) to raise the supply of labor; and (2) to raise productivity levels, particularly in the non-manufacturing sector (retail, services, and agriculture).

Tuesday, December 10, 2013

The Japanese Housewife: Gender Inequality in the Workplace and its Economic Impact

It is common for female employees in Japan to retire once they enter motherhood, as it is a societal norm for mothers to adopt the full time position of child caretaker. Although women receive a number of strong legal protections in the workplace, Japanese media has been known to mock feminist movements in Japan around the world. And western media continues to stereotype the Japanese woman as a subservient geisha. The lack of female representation in Japan’s workforce is well publicized, and Vice President Joe Biden even met with organizations that promote equal rights in the workplace.  

Monday, December 9, 2013

Biden's Visit Shows That East Asia Won't Be Going To War

For the last year, the Senkaku Island dispute has engulfed Japan-China relations. It has led to a significant rise in anti-Japan protests in China, while the Abe Administration in Japan seems to be gaining support for its plans to expand the capabilities of the self defense forces. It isn't hard for an onlooker to see that tension is clearly escalating with no resolve in sight. To make matters worse, China announced an air defense identification zone just a few weeks ago, which extended over the hotly disputed Senkaku Islands, causing a flurry of negative reactions and accusations among China’s neighbors. Officials in Beijing stated in November that all aircraft entering the new air defense zone must notify Chinese authorities and are subject to emergency military measures if they do not identify themselves or obey Beijing’s orders.

Monday, June 3, 2013

China shouldn't -- nor will they be able to -- join TPP negotiations right now

There is a growing voice in Chinese academic and policy circles which maintains that the main reason behind the Obama Administration’s support for the Trans-Pacific Partnership (TPP) agenda is the US’s desire to use the trade agreement as a tool to economically contain China’s rise. Naturally, USTR has contested that the TPP is only a means to liberalize and promote trade on both sides of the Pacific, and that China is more than welcome to join TPP negotiations either now or in the future. Most analysts agreed that, if successfully negotiated and implemented, the size and scope of TPP would force China to eventually join, but no one predicted to hear interest from China as soon as this year.

Thursday, May 23, 2013

Forget the Nikkei, look at inflation rates to see whether Abenomics is working

After a few weeks of mainstream media outlets celebrating Abenomics and the soon-to-be revitalized Japanese economy, a 7% drop in the Nikkei on Thursday generated a serious dose of skepticism towards the Abe administration's three arrows. Even though the Nikkei seems to be bouncing back after yesterday's drastic drop, bloggers have already begun questioning the infallibility of Abenomics. Basing Japan's economic recovery off of the Nikkei's performance may be presumptuous. Instead, many economists have been looking at how long-term interest rates are being affected by Abenomics to see whether Japan's economy truly is improving.

Friday, October 19, 2012

The case for why Mr. Abe shouldn't visit the Yasukuni Shrine

I shouldn't have been so surprised when I found out that newly elected LDP president, Shinzo Abe, visited the Yasukuni Shrine on Wednesday. Mr. Abe has always been characterized as a hawk, and his rhetoric is textbook right-wing politician. But because he already held the title of prime minister, I thought Mr. Abe was smarter than his predecessors and understood the ramifications of his words and actions.