Japan must tear down barriers to trade with the rest of Asia and step up technological innovation to maintain solid growth despite a shrinking population, the head of the top business lobby said Feb. 19.
"The world economy is growing in a high rate of about 4% and its window to growth is wide open to Japan," said Fujio Mitarai, chairman of the Japan Business Federation, or Keidanren. "The key for Japan to take advantage of the robust growth in the global economy is by signing economic partnership agreements with other countries," said Mitarai, who is also chairman of Canon Inc.
The first necessary step for Japan is to seal free trade deals with Asian countries as soon as possible," he said.
Japan's population declined in 2005 for the first time since World War II, but Mitarai said that the impact of the shrinking population on the Japanese economy should not be overestimated. He said the chief driver of economic growth had always been technological innovation and population growth had played only a limited role.
Japan has been increasingly pursuing free trade pacts, seeking to secure access to raw materials and markets for its exports. Japan's first FTA, with Singapore, took effect in late 2002 and Tokyo has since agreed on deals with Mexico, Malaysia, Thailand and the Philippines. It has ongoing negotiations with South Korea, six oil-rich Gulf nations and the 10-nation Association of Southeast Asian Nations (ASEAN) as a whole.
Prospects for a region-wide free trade area have been clouded by Japan's tense relations with Asian neighbors such as China, and the business lobby has urged the government to step up efforts to repair diplomatic relations.
Copyright Agence France-Presse, 2007