Terrie's Take 823 -- TPP Doubts Linger, ebiz news from Japan

Terrie's Take terrie at mailman.japaninc.com
Sun Oct 11 22:49:59 JST 2015

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term 
technology and media entrepreneur living in Japan.

General Edition Sunday, October 11, 2015, Issue No. 823

- What's New -- TPP Doubts Linger
- News -- Consumers shoulder Japan's tax burden
- Upcoming Events
- Corrections/Feedback -- More movies that draw tourists
- Travel Picks -- Halal bakery in Tokyo, Unforgettably artful hotel in 
- News Credits

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Earlier this week, the trade ministers from 12 pacific rim countries 
wrapped up their Trans-Pacific Partnership (TPP) negotiations in 
Atlanta, Georgia (USA). The 12 countries represented were: Australia, 
Brunei, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, 
Singapore, Vietnam and the USA. Between them they account for about 40% 
of the world's total GDP and thus the new trading bloc will represent 
one of the largest free trade initiatives ever.

Frankly, we never thought we'd see the TPP negotiators get this far, 
after 7 long years of seemingly intractable negotiations. And still, 
even though the basics are now agreed to, the hardest part is yet to 
come. For now each country's leadership has to convince their respective 
law-making bodies to agree to the conditions. The country with the 
biggest hurdle to approval is probably going to be the USA, especially 
since it will take at least 3 months to get the legislation in place and 
start getting it heard. So this means that TPP focus by legislators will 
quickly get diverted to the run-up for the 2016 presidential elections. 
Indeed, it is the elections that probably stimulated the 12 ministers to 
hurry up and get to the final agreement so quickly. The chances are high 
that the next US president won't have the same interest in seeing them 
through to conclusion as does Obama.

Although Obama has said he supports TPP and will sign a finalized deal, 
pretty much everyone running in the 2016 race (Republican or Democrat 
candidate) has said they oppose it -- including Hillary Clinton, who did 
a lot of work to get TPP to where it is today. There are lots of reasons 
for people in each member country opposing TPP, but basically they fall 
in three camps: those who think any easier access to home markets will 
take jobs from their nationals, those who think it will impinge on the 
sovereignty of their country and its respective laws and customs, and 
those who don't think it goes far enough. We suppose it depends on 
whether you subscribe to world government conspiracy theories or not.

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[...Article continues]

At this last negotiation session, the participants agreed that the pact 
would be considered active if sufficient countries to account for 85% of 
the bloc's GDP approved it at their legislative bodies. Practically 
speaking this means the USA (60% of bloc GDP), Japan (18%), and either 
of Canada (7%), or Australia and Mexico (5% each) would carry the day.

There are many detractors of TPP who think it is an evil plot by 
multinational corporations to supersede local laws. Certainly the TPP 
process s nothing to dispel those feelings. Firstly, there is the fact 
that the negotiations have been kept so secret. What we currently know 
about the agreement is extremely limited, gleaned from a few carefully 
worded announcements by the leadership of each partner country, Oh... 
and by a number of leaked documents (most dating back to early versions 
in 2013) published by Wikileaks! :-) In most cases, the deepest details 
are only known to a handful of people from each country, and hopefully 
more information will come to hand when the leaders of each member 
country starts to sell the agreement to their respective legislative bodies.

Secondly, there is the wording of those capers we do know about. For 
example, one of the most controversial parts of the agreement is the one 
on IP rights. Possibly it's most controversial because it became most 
recently available on Wikileaks (several days ago).


This chapter appears to have been drafted in consultation with large US 
multinationals. It provides very specific terms and conditions for 
managing rights for music, movies, pharma, agrochemicals, the internet, 
and other industries. This has caused fears that the USA is trying to 
impose its will and systems such as the flawed Digital Millennium 
Copyright Act (DMCA) on other sovereign countries. Indeed, after reading 
the IP chapter, you can't help agreeing that the other 11 countries are 
going to have to rewrite a lot of their laws to fit TPP expectations. 
For example, on Page 40, section 4, there is specific mention of the 
right to seek loss of profits and disincentives to illegal activity, in 
legal proceedings. Usually Japanese courts only award actual damages and 
not punitive damages, so we imagine that this will become a political 
hot potato if there is ever a high-profile case.

It's also interesting to compare on the Wikileaks site the IP chapter, 
which US corporate interests are so focused on, with the Environment 
chapter, which is so vague and watered down that you have to wonder why 
they even bothered writing it. Of course we don't have the latest 
environment chapter, just the 2013 version on Wikileaks, so maybe it got 
sharpened up a bit. But we doubt it will change that much, because the 
IP section didn't change so significantly from the 2013 version to the 
current one either, and it is one of the most aggressive parts of the 

The TPP documents thus leaked not only show one-sideness from the point 
of view of big countries versus small ones, but also big companies 
versus the public. In the IP chapter, there doesn't seem to be any 
enshrinement of fair use by individuals, which is well established in 
the USA already -- so why did it get left out? It appears also, that US 
large companies can sue individuals and even governments from their home 

The Electronic Frontier Foundation has a very good web page on what they 
see as potential threats to consumer rights here: http://bit.ly/1LApJTZ.

We conclude by saying that while we do support the general concept of 
the TPP, it appears that the current agreement has been partly hijacked 
by US big corporate interests and the fact that there has been no open 
discussion about the measures being considered just reinforces this 
feeling. The Japanese farming and legal sectors won't like this 
agreement one bit and will kick up a lot of fuss about it. Therefore, we 
would not be at all surprised that if the agreement gets shot down in 
the USA the Japanese government won't be sorry about it.

Anyway all eyes will now be focused on the US between next week and 
Feb-Mar 2016. If, by some miracle, Obama can get the agreement ratified, 
then Japan and Australia/Mexico will most likely fall in line and TPP 
will at long last become fact.

...The information janitors/


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+++ NEWS

- Online attacks costing more in Japan
- Economic slowdown forecast for top 3 economies
- Machine orders down 3.5%
- Consumers shoulder Japan's tax burden
- Monkey underwear in 2016

=> Online attacks costing more in Japan

A study by the Ponemon Institute of Michigan, USA has found that across 
seven major economies, US companies suffered the highest costs of online 
attacks, with an average cost (averaged across all surveyed companies) 
of US$15m. Lowest costs were incurred by Russian firms, at US$2.4m a 
year, and the average cost was US$7.7m. Japan was a bit lower than 
average, at US$6.81m. The biggest financial impact was caused by DDoS 
attacks, followed by insider attacks and stealing of company data. 
***Ed: It's pretty common knowledge that Japanese firms are 
under-prepared for cyberattacks, especially from Chinese hackers. We 
regular hear of stories from customers who were attacked. Public 
disclosure and related damage control actually seems to be the biggest 
cost.** (Source: TT commentary from zdnet.com, Oct 08, 2015)


=> Economic slowdown forecast for top 3 economies

Probably we already knew this, but the OECD has made it official that 
based on August numbers, the world's three largest economies: USA, 
China, and Japan, have all slowed down and the indicators show that this 
is a trend. The OECD is now warning of the risk of a global recession -- 
something that the US Fed will surely be watching carefully. The Bank of 
Japan is countering the slowdown with ongoing QE and share purchases, 
but as a UN agency has said, maybe instead of focusing on pumping more 
liquidity into the financial system, governments should instead consider 
more material alternatives such as public works and similar public 
investments. ***Ed: Although the last thing Japan needs is more public 
works! They'd be better served investing in the social infrastructure, 
such as providing better facilities for working moms, advanced education 
to adult students, and better financing for start-up companies.** 
(Source: TT commentary from marketwatch.com, Oct 08, 2015)


=> Machine orders down 3.5%

Japanese manufacturers are a pretty smart bunch and have once again been 
proven right about their conservatism in the face of PM's Abe's 
exhortations for them to spend more on their employees. The recent 
turmoil and overall economic slowdown in China is something that goes 
far beyond the ability of Japanese corporates to remedy, and since the 
situation is worsening, machine orders by Japanese firms have fallen by 
the largest margin in the last 10 months, down 3.5% for August from the 
same period a year earlier. ***Ed: You really have to wonder why the US 
markets are so optimistic when here in the East everyone is already 
waiting for the penny to drop.** (Source: TT commentary from ft.com, Oct 
08, 2015)


=> Consumers shoulder Japan's tax burden

It's amazing that the hard-pressed Japanese public never complains about 
the big switcheroony that the government (the LDP and the DPJ before it)
achieved by moving the tax system base from personal earnings to 
consumer spending. At the time it was said that the increase in 
consumption tax would be fairer because it spread the tax burden across 
people who didn't work but who still consumed government services (i.e., 
the retired). That was a reasonable proposition, but the numbers now 
show that what has actually happened is that Japanese consumers not 
companies are shouldering most of the tax burden. Apparently 61% of the 
government's tax revenue now comes from personal income tax and 
consumption tax, while corporate tax provides only 20%. Why the big 
difference when Japanese companies are making so much money? The answer 
is that they are not repatriating the profits back to Japan -- their 
right, of course, but it does mean that deflation is still very evident 
and that real wages adjusted for inflation fell 2.8% last year. ***Ed: 
Tax revenue is expected to be around JPY54.5trn this fiscal year, the 
highest in 24 years, but still less than half the government budget.** 
(Source: TT commentary from bloomberg.com, Oct 08, 2015)


=> Monkey underwear in 2016

We have never heard of this custom before, but apparently it's lucky to 
wear red underwear during Year of the Monkey, the next one of which will 
be next year, 2016. Known as "saru-mata" (literally "monkey underwear"), 
in the last Year of the Monkey, in 2004) Wacoal apparently sold 500,000 
pairs of undies, four times more than usual. Mostly it was to older 
people who follow the oriental belief that the color red keeps the body 
warm. But this time around young women are also getting interested 
because red denotes passion as well, so apparel makers are girding up 
for a record-breaking year. (Source: TT commentary from nikkei.com, Oct 
11, 2015)


NOTE: Broken links
Some online news sources remove their articles after just a few days of 
posting them, thus breaking our links -- we apologize for the inconvenience.


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=> In Terrie's Take 822 we spoke about using movies as a way to pull 
tourists to otherwise uninspiring locations around Japan. A reader comments:

*** Reader: Your latest newsletter resonated with me. In my case there 
are three places that drew me to visit them after seeing the movies:
- I went to Dogo Onsen because of Spirited Away
- I usually bring visitors to the Nishi-Azabu Gonpachi, also because of 
its connection with the Kill Bill movie
- I used to bring every visitor I had to the Karaoke booth in the 
Shibuya Karaoke-Kan, which starred in that famous scene of Lost In 
Translation. Well, it was the same booth, until they unfortunately 
renovated it.

There must be more places like this. It would probably make a good 
special feature on your japantravel.com site?



=> Let's have bread for breakfast! (Tokyo)
Warm and Fragrant bread at Halal Bakery Cafe Liason

There were only three things I could think of after visiting the Halal 
Bakery Cafe Liason: "Delicious", "fresh", and "I'll be Back Again". This 
wonderful bakery is located in Minato-ku (ward) in Tokyo. The name is 
catchy enough for Muslim tourists to remember when visiting Japan, but 
it's great even if you are not Muslim and just want to try something 

Though Halal Bakery Café Liason has only been operating since 2013, it 
has successfully attracted customers from all over thanks to its 
delicious line-up of breads and pastries. Take your pick -- buns, 
pastries, cakes, or French baguettes. Aside from baked products, the 
cafe also serves hot and cold drinks such as tea, coffee, and fresh juices.

I soon realized that the display trays were emptying quickly, with staff 
shuttling back and forth to fill them up again right away. Hamizah, one 
of the staff from Brunei, recommended me to try the Chicken Curry Bun, 
which is a local favorite and soon sells out. So I became curious to see 
what it was like. Oh, I also tried the Strawberry Pastry.

Well, I can tell you that it was great, and right after biting into it, 
I instantly knew why this bun is such a big favorite. It was so soft, 
fragrant, and fresh, with a unique curry taste and soft texture. Mmmm... 
just thinking about it as I write this is enough to make me want to be 
back there again!


=> Art Hotel Color Aomori
A completely unique (and artful) Japanese business hotel

The Japanese business hotel experience is fairly universal. Anyone who 
spends time in Tokyo can at least recognize them from the outside; in 
fact one could argue that the speckling of blue neon Toyoko Inn signs 
are what make Tokyo's night time skyline. The beds are hard, sitting 
adjacent to a desk on one side and a relatively small bathroom on the 
other. Wi-Fi strength varies, but aside from that not much sets one 
Japanese business hotel apart from the next.

However, I found an amazing exception in a little alley near the 
northernmost tip of Honshu -- in the form of the Aomori Art Hotel Color 
in Aomori-Shi, Aomori -- a ten minute walk from Aomori station in one 
direction and the same from the port in the other. There you will be 
greeted not by a hotel employee, as at more up-scale hotels, or by a 
sign pointing you to check-in, as at other business hotels, but rather 
by a wall painting of a face, featuring highly made-up eyes and rouged 
mouth, painted under a bright red nose comprising the fire alarm...! The 
face is surrounded by a wall of pink and blue dots and patches, 
suggesting to me that this hotel could be the most fun accommodation 
I've ever had. The adjacent walls are no less colorful, varying in 
design from abstract to apples, the prefecture's main crop.




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Written by: Terrie Lloyd (terrie.lloyd at japaninc.com)

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