* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>
A weekly roundup of news & information from Terrie Lloyd.<br>
(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br>
<br>
General Edition Sunday, March 06, 2011, Issue No. 604<br>
<br>
+++ INDEX<br>
<br>
- What's New -- Why Japan Needs the TPP Trade Pact<br>
- News -- 'Wahaha', More than Just a Chinese Yoghurt Joke<br>
- Candidate Roundup/Vacancies<br>
- Upcoming Events<br>
- Corrections/Feedback -- English lessons with Philippines<br>
- News Credits<br>
<br>
SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br>
<a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br>
<br>
BACK ISSUES<br>
<a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br>
<a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br>
<br>
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<br>
+++ WHAT'S NEW<br>
<br>
In 2011 we may see a historic opening up of the Japanese <br>
domestic market to agricultural imports, via the <br>
Trans-Pacific Partnership free trade pact, more commonly <br>
known as TPP. PM Naoto Kan shocked many conservatives in <br>
October last year when he announced that his government <br>
would bring Japan into the TPP discussions as early as this<br>
year (2011), making a final decision about whether to join <br>
the framework by June.<br>
<br>
In making this announcement Kan was effectively attacking <br>
the farming political bloc, who have scuttled every other <br>
attempt over the last 30 years to open up Japan's <br>
agricultural sector to foreign competition. He is doing <br>
this because unlike the past, when the only issue at stake<br>
was high consumer prices -- and no one really cares about <br>
the consumers -- the problem is now that the bilateral nature<br>
of TPP may effectively give competing countries a huge <br>
price advantage over Japanese firms in autos, electronics,<br>
and other traditional export sectors.<br>
<br>
>From what we can see, Kan appears to be staking his <br>
political future into making TPP happen, and is really <br>
digging in his heels despite demonstrations by farming<br>
groups and remonstrations by Farm Ministry officials. Short<br>
of losing a no-confidence motion, he appears ready to tough<br>
it out and get Japan signed up. Kan certainly has a sense <br>
of history in his mission, stating shortly after his <br>
re-election over Ozawa last September that TPP is like "the<br>
third kaikoku (opening of Japan to the outside world), <br>
following the Meiji Restoration (of 1868) and defeat in <br>
World War II."<br>
<br>
So what is the TPP and is it really a significant event?<br>
<br>
[Continued below...]<br>
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<br>
[...Article continues]<br>
<br>
The pact actually started way back in 1983, as an agreement<br>
between Asia's only two native English-speaking countries, <br>
Australia and New Zealand, as a sort of recognition that <br>
the two were close enough that they could almost be one <br>
country never mind the friendly competitiveness and the <br>
sheep jokes... <br>
<br>
Fast forward to 2000, and NZ, Singapore, the USA, Vietnam, <br>
and some other countries around the pacific rim started to <br>
sign free trade pacts with each other, leading to four of <br>
those countries forming the current TPP network between<br>
2006 and 2009. The four are: Brunei, Chile, New Zealand, <br>
and Singapore. Advanced negotiations happening to bring in <br>
Australia, Malaysia, Peru, the United States and Vietnam. <br>
<br>
What is interesting is that those 9 countries account for <br>
about 28% of nominal global GDP and 26% of Japan's total <br>
exports by volume. So involvement with the TPP is an <br>
obvious trade retention exercise -- in that it provides <br>
Japan with an inside track to defend exports against the <br>
predations of competitors who are moving on their own FTAs <br>
with individual TPP members, most notably the USA.<br>
<br>
Indeed, it is one particular such competitor, South Korea, <br>
that most appears to be prodding Japan into action. <br>
<br>
The fact is that Korea over the last ten years has whipped <br>
Japan's a** in home electronics, semiconductors, <br>
automobiles, clothing, and a variety of other sectors, <br>
partly due to the devaluation of its currency, but also <br>
partly because the government there was quick to realize <br>
that to survive they had to open up, get rid of damaging<br>
protectionism, and excel only in the industries that they <br>
chose to put their minds to.<br>
<br>
Thus it was that in 2003 Seoul put into place an Free Trade<br>
Agreement (FTA) "road map" that caused it to start <br>
aggressively negotiating non-tariff access to other markets<br>
in return for access to its own. As a result, the nation <br>
already has a US FTA, although not yet ratified, and will <br>
see a European Union (EU) FTA go into effect from this <br>
June. Eventually Korea expects to have around 90% of its <br>
exports being tariff-free.<br>
<br>
As an example of the impact this will have on Japan, take<br>
LCD TVs. Right now Samsung makes LCD TVs which are <br>
technically as good as Sony, Sharp, and other Japanese <br>
brands and offers a price just 5%-10% less than the more <br>
Japanese famous brands. However, shortly, Samsung's sales<br>
in the EU will be free of 10% tariffs. This effectively <br>
will make Samsung products hundreds of euros cheaper than <br>
their Japanese competitors and the results on Japanese <br>
exporters will be obvious.<br>
<br>
Adding further pressure on the Japanese government is the <br>
fact that the USA is expected to join the TPP before it <br>
hosts the next APEC conference in Honolulu in November this<br>
year. For the USA to be part of TPP, along with the Koreans<br>
and their soon-to-be-active FTA, means that once again, <br>
Japan's products will be tariffed while their competitors <br>
have open access to the US market. That plus the ongoing <br>
high yen rates could be disastrous.<br>
<br>
Keidanren, the Japan Business Federation, is clearly very <br>
worried about the implications of TPP, and is pushing the <br>
government to move as quickly as possible to join the pact.<br>
It says that TPP, combined with proposed corporate tax <br>
cuts, will keep manufacturing in Japan and reverse the <br>
current hollowing out. They also say that domestic capital <br>
investment will rise about 60% over the next 10 years. The <br>
Trade Ministry (METI) likewise says that not being in TPP <br>
will severely hurt exports of autos, machinery, and <br>
electronics and push down GDP in 2020 by JPY10.5trn, <br>
causing more than 800,000 jobs to be lost.<br>
<br>
Thus, while it is obvious that Japan should be part of the <br>
TPP for the sake of its major exporters, why is it that the<br>
Japanese are dragging their feet? <br>
<br>
The answer is the nation's conservatives, who have long <br>
used farmers as a symbol of traditional core values and <br>
something to be preserved at all costs. They say that TPP <br>
will lead to the loss of Japanese cultural heritage if the <br>
farming sector is fully exposed to the ravages of <br>
international competition. Although bewildering to a <br>
non-Japanese, the elevation of agriculture and farming to <br>
something almost sacred is a tactic that has worked in the <br>
past, as is obvious from the lop-sided representation <br>
of sparsely populated farming electorates in parliament and <br>
the 700% price supports for rice. But as Kan's government <br>
has been saying, now is the time to stop protecting just <br>
1.5% of the economy, for the sake of the health of much <br>
bigger sectors such as manufacturing and financial <br>
services.<br>
<br>
It is our take that farming will not be damaged to the <br>
extent that the conservatives make out. Recent trends in<br>
Grown-in-Japan fruit, veges, and rice exports to Asia have<br>
gone to show that Japanese produce can get the high prices <br>
needed, in return for promising unyielding quality in taste<br>
and health. Evidence of this re-pricing working can even be<br>
found here in Japan. Because of the various food scandals<br>
associated with China, Japanese housewives now willingly <br>
pay JPY200 for a solitary clump of garlic or ginger than <br>
JPY150 for a whole bag of the Chinese-sourced product. The <br>
farming sector just needs to understand how to market <br>
better, and they can make a killing through exports and<br>
value-added domestic sales, rather than fighting over a <br>
shrinking local market.<br>
<br>
What's more, the whole farming sector is in dire crisis <br>
anyway -- so what is being defended here? Basically <br>
some idealized embedded in a bureaucrats imagination? <br>
The average age of farmers is in their late 60's, well past<br>
the point where they are physically capable of peak <br>
output, and many of the nation's farms are lying fallow <br>
because there is no one to work them. In fact, we have <br>
two separate non-farming friends (one is a foreigner) who <br>
have been able to buy up fallow land at ridiculously <br>
cheap prices, simply because it was designated farming <br>
only and they have pledged to farm it -- even if only <br>
part-time.<br>
<br>
We believe that TPP will be the catalyst for some really <br>
major change for Japan, just as Kan predicts, and is an <br>
opportunity not to be missed. While the media speculate <br>
that Kan's government will fall any day soon, we sincerely <br>
hope that the PM's famous stubborness wins out at least <br>
until the end of the year, and that he gets Japan on track <br>
for the TPP. Japan needs the gaiatsu to get itself back on <br>
track internationally and to flush out the internal decay <br>
brought on by its many self-interested political groups.<br>
<br>
...The information janitors/<br>
<br>
***------------------------****-------------------------***<br>
<br>
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<br>
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<br>
And our congratulations to Mike Bagosy for winning<br>
the free night's stay for two at the Royal Park Shiodome <br>
Hotel in Shimbashi/Shiodome.<br>
<br>
Becoming a Metropolis Member is as simple as going to the <br>
website and signing up for the weekly newsletter. No other <br>
obligations. <br>
<a href="http://blogs.metropolis.co.jp/club/">http://blogs.metropolis.co.jp/club/</a><br>
<br>
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* Simply receive the MMC newsletter to stay in the draw.<br>
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-----------------------------------------------------------<br>
<br>
+++ NEWS<br>
<br>
- JA tries to fend off TPP with new collectives<br>
- Radio media ownership rules change<br>
- China firm to buy out yoghurt maker?<br>
- Marc Faber talks up Japan<br>
- 25% increase in suicides over youth joblessness<br>
<br>
<br>
-> JA tries to fend off TPP with new collectives<br>
<br>
Small minds miss the point, and Japan's agricultural <br>
cooperative, JA-Zenchu, has a collective mind which is <br>
smaller than most. Threatened by the government's intent to<br>
join the TPP pact, JA is saying that a better target is to <br>
upsize the nation's many tiny farm plots into larger <br>
tracts, to make them more efficient. Currently the average <br>
farm plot is 1.27 hectares, whereas the JA proposal is to <br>
"collectivize" those plots into larger farms of 20-30 <br>
hectares. ***Ed: How this will work and why it will be <br>
better for Japan than the TPP is not spelled out, but <br>
somehow JA thinks it will help improve agricultural output.<br>
Instead, what we can see it as yet another level of <br>
bureaucracy, which will lower feelings of commitment by <br>
farmers, and most likely lead to even more inefficiency <br>
than is the case now...** (Source: TT commentary from <br>
<a href="http://e.nikkei.com">e.nikkei.com</a>, Mar 5, 2011)<br>
<br>
<a href="http://e.nikkei.com/e/ac/tnks/Nni20110304D04JFA27.htm">http://e.nikkei.com/e/ac/tnks/Nni20110304D04JFA27.htm</a><br>
<br>
-> Radio media ownership rules change<br>
<br>
Just goes to show that the bureaucrats know how to be <br>
flexible when the writing is on the wall. Apparently the <br>
Ministry of Internal Affairs and Communications will from <br>
late June allow any single company to own up to four radio <br>
stations, rather than a single station as is now the case. <br>
The relaxation of the media ownership rule has come about <br>
because many of the nation's radio stations are in severe <br>
financial condition and need rehabilitation or they will <br>
go under. (Source: TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Mar 4, <br>
2011)<br>
<br>
<a href="http://e.nikkei.com/e/ac/tnks/Nni20110304D04JF519.htm">http://e.nikkei.com/e/ac/tnks/Nni20110304D04JF519.htm</a><br>
<br>
-> China firm to buy out yoghurt maker?<br>
<br>
The chairman of the improbably-named Wahaha group, a person<br>
who also happens to be China's richest person, says that <br>
the group is considering buying a "Japanese yoghurt maker" <br>
without saying which one. Wahaha controls about 9.7% of the<br>
Chinese dairy products market and is the third largest <br>
player in that sector. Apparently the Wahaha boss likes <br>
Japanese food know-how and product taste and wants to use <br>
the acquisition to boost market share in China. ***Ed: One <br>
hopes that the target Japanese firm has done its homework <br>
on Wahaha. The company just settled a court battle with <br>
Danone over charges that they took products owned by a <br>
j/v with Danone and sold them through their own private <br>
network. This may not be a partner the Japanese want to <br>
have on their side.** (Source: TT commentary from <br>
<a href="http://bloomberg.com">bloomberg.com</a>, Mar 6, 2011)<br>
<br>
<a href="http://bloom.bg/eXybT0">http://bloom.bg/eXybT0</a><br>
<br>
-> Marc Faber talks up Japan<br>
<br>
Well-known HK investor, Marc Faber, has commented at a <br>
conference in Tokyo that Japan stocks are looking very <br>
favorable over the next ten years. His rationale is <br>
interesting. He says that because public debt is so high, <br>
the government will be forced to "print money" to monetize <br>
the debt. In doing this, it will cause the yen to fall, <br>
boost earnings for exporters, and consequently boost <br>
stocks. (Source: TT commentary from <a href="http://barrons.com">barrons.com</a>, Mar 4, <br>
2011)<br>
<br>
<a href="http://bit.ly/e5KTML">http://bit.ly/e5KTML</a><br>
<br>
-> 25% increase in suicides over youth joblessness<br>
<br>
One of the terrible fall-outs of the global job squeeze is <br>
the increased number of young people in their twenties who <br>
commit suicide after failing to cope with the feelings of <br>
inadequacy and depression. According to police statistics, <br>
there was a 25% increase in the number of suicides, up to <br>
153 deaths, of young people after failing to find a job. On<br>
a slightly more positive note, the overall number of <br>
suicides in Japan dropped for the first time in nine years,<br>
to below 32,000. (Source: TT commentary from <a href="http://reuters.com">reuters.com</a>, <br>
Mar 3, 2011)<br>
<br>
<a href="http://reut.rs/gXVs61">http://reut.rs/gXVs61</a><br>
<br>
<br>
NOTE: Broken links<br>
Many online news sources remove their articles after just a<br>
few days of posting them, thus breaking our links -- we<br>
apologize for the inconvenience.<br>
<br>
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<br>
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<br>
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-----------------------------------------------------------<br>
<br>
***------------------------****-------------------------***<br>
<br>
+++ UPCOMING EVENTS/ANNOUNCEMENTS<br>
<br>
------------- Entrepreneur Seminar in Osaka ---------------<br>
<br>
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with Japan's major companies. Using foreign technology and <br>
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<br>
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<br>
Date: Thursday, March 10<br>
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Access Map: <a href="http://bit.ly/dKd73I">http://bit.ly/dKd73I</a><br>
Time: 12:00PM ~ 14:00PM (reception opens at 11:30AM)<br>
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<br>
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<br>
Closing date for attendee registration: March 7<br>
* Cancellation after Closing Date is subject to 100% <br>
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<br>
For more info, contact Yamada at 06-6537-1792 by fax.<br>
-----------------------------------------------------------<br>
<br>
***------------------------****-------------------------***<br>
<br>
+++ CORRECTIONS/FEEDBACK<br>
<br>
In this section we run comments and corrections submitted<br>
by readers. We encourage you to spot our mistakes and<br>
amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br>
<br>
*** In TT603, we covered an item about a Japanese company <br>
selling video conferenced English lessons with teachers in <br>
the Philippines for just JPY100 for 20 minutes. That <br>
company is growing gangbusters.<br>
<br>
=> Our reader comments:<br>
<br>
Regarding your quote: "Our guess is that retirees in the <br>
USA and elsewhere will wind up being the most popular <br>
online English teaching providers." Well, you should <br>
know that the minimum wage in California is $8.00 per HOUR<br>
while the minimum wage in Cebu, Philippines is $6.50 per <br>
DAY. Put another way, one can hire college-educated, <br>
bilingual staff for this $6.50 daily wage and as a result<br>
the Philippines surpassed India in 2010 to become the #1 <br>
call center nation in the world.<br>
<br>
A Japanese English-language student can speak with a young <br>
Filipina/Filipino about shared interests, including <br>
American music, J-Pop, K-Pop, etc. You guys may bet on <br>
American retirees being in demand for this work, but I'll <br>
bet on the Filipinos! <br>
<br>
I agree that the openness of some Filipinas may lead to <br>
sexually explicit discussion and probably makes them even <br>
more in demand. But the call centers here are mostly very <br>
professionally run, and any significant local call center <br>
is not going to allow their staff to do sexually explicit <br>
things on a call.<br>
<br>
=> We respond:<br>
<br>
Thanks for the excellent feedback. Clearly trans-border <br>
language lessons are the wave of the future. Why did we <br>
mention American retirees? Although we didn't go into <br>
detail, they are more likely to have the relevant work <br>
experience and technical experience that company employees <br>
need to practice. We think that young Filipinos will be <br>
more attractive to casual and home learners.<br>
<br>
Also, there is no minimum wage if the parties participate <br>
in an open language-matching marketplace. This is already <br>
a proven fact for the translation business, with sites such<br>
as Proz.com. English teaching won't be far behind.<br>
<br>
***********************************************************<br>
END<br>
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Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
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