The recent G7 Summit was a forum for in-depth discussions and the leaders issued a communiqué encompassing points emphasized by Keidanren such as upholding free trade and promoting economic growth. On the other hand, President Trump engaged in deal-based diplomacy and used all kinds of issues as bargaining chips. This approach is inconsistent with the international economic order built up by the global community. Such conduct presents a new challenge for the G7. Some commentators had suggested that the North Korean issue would place the Japanese government in a weak position over trade, but at the G7 and in bilateral meetings Prime Minister Abe proved that he is fully capable of fronting up to the US.
I recognize that investors pulling funds out of newly emerging markets has not yet become a big trend, but it is a risk factor. Newly emerging countries include the superpower China, and trends in China affect the Japanese economy. I will closely monitor such developments.
Japan-US Economic Relations
In July, Japan and the US will start free, fair, and reciprocal trade talks. The negotiations are likely to be tough, but I do not take a pessimistic view. I have a sense of déjà vu. After going through a period of trade friction in the 1980s, Japan and the US now have a strong economic relationship. The US is a powerful nation, and sometimes political leaders use this power to get favorable trade condition. Prime Minister Abe has forged a relationship of personal trust with President Trump and pursued deeper engagement. Talks will need to be conducted via a broader range of channels than ever. I urge the Japanese government to respond by using all the tools at its disposal to strengthen bilateral economic relations and resolve trade issues, based on the premise of very high levels of interdependence in Japan-US economic ties. The Japanese government’s steadfast determination in diplomacy gives me hope. Keidanren will also need to approach the challenges in the US from multiple angles. Rather than relying solely on lobbying in Washington, D.C. we have built strong ties with governments and business communities in many states. We will continue our focus on these activities.
Since the WTO has a large number of members, it no longer functions effectively when decisions have to be made. However, it does have a judiciary function, which should be utilized effectively to address recent trade issues. The Japanese government shares this view. Having said that, a decision that simply labels conduct as a WTO violation does not naturally lead to further agreement, even if it resolves some aspects of a deadlock. In today’s digital era, especially, it is not easy to resolve data-handling issues in the WTO.
US-North Korea Summit
A single summit will not solve everything, and inevitably there will be ups and downs. As a first step, we should welcome face-to-face talks between the leaders. We need to carefully watch how this summit affects the easing of tensions on the Korean peninsula. The Japanese government should use every opportunity to assert its views.
Welcoming More Foreign Workers
Immigration is not a question of accepting migrants because Japan is short of workers. Japan needs to increase diversity in order to become more industrially competitive, boost its research capabilities, and improve the level of scholarship. Japanese is basically spoken only by Japanese people and yet we are not adept at foreign languages, which hampers communication. However, we must also consider the social costs of accepting people with different cultural and social backgrounds. I regard Prime Minister Abe’s real intention as making it easier for more people from overseas to visit and work in Japan, rather than dwelling on migrant status.