Invisible hands

[samuraiwig]

Mandelson calls on Japan to lift 'invisible' barriers to free trade

Full article at The Guardian

Japan must remove its "invisible" barriers to foreign trade and investment to spur a low-carbon global economic recovery, the business secretary, Peter Mandelson, said today.

Speaking during a three-day visit to Tokyo, Mandelson praised Japan's new prime minister, Yukio Hatoyama, for his "internationalist" approach and "willingness to challenge old thoughts", but called on him to pull down the barriers to free trade with Britain and the EU.

"What aggravates UK-Japan relations is what is not seen, the invisible hand that hinders access to Japan's markets," he told British reporters. "Japan has in the past been a practitioner par excellence of operating behind barriers and preventing access to its markets."

Mandelson said he was confident the new government in Tokyo had accepted it could no longer run the economy "like an old boys' club. They have to open the windows and let more fresh air in."

He added that unless Japan gave up on non-tariff barriers including red tape and limits on foreign ownership of key industries – the true potential for economic co-operation between Japan, and Britain and the EU would remain unlocked.

"Both sides have to try a whole lot harder and make it more of a priority, in order to pave the way for negotiations about a new EU-Japan economic integration partnership," he said. "Japan's rejection of global nationalism and commitment to openness could not be more important than against this backdrop of global recession."

Despite his criticisms, Mandelson welcomed assurances from carmakers Toyota and Nissan this week that they remain committed to car production in the UK.

In a meeting yesterday with Nissan's senior vice president, Andy Palmer, Mandelson pushed Britain's bid to become the European manufacturing base for the carmaker's electric vehicles. Nissan has already agreed to produce batteries for electric cars at its plant in Sunderland.

"I am excited that we are going to see battery production in Britain, and I'm very hopeful that will be followed by full car production," he said. "So between Britain and Nissan, it's all systems go."

Palmer later said, however, that Nissan had yet to decide on a European venue for electric car production, due to begin about 2012.

Last year, as EU trade commissioner, Mandelson described Japan as "the most closed investment in the world", saying it was happy to benefit from open economies elsewhere but largely shunned foreign investment in its own.

Foreign direct investment into Japan came to about 3.6% of GDP last year, according to Jetro, a Japanese trade organisation, compared with 15.1% in the US and 48.6% in the UK in 2007. Japan has said it will try to raise inward investment to 5% of GDP by 2010.

Today, Mandelson cited the controversial decision in February to award the Japanese firm Hitachi a contract to build a train assembly plant in Britain as evidence of a "lack of reciprocity".

"In the UK we have thrown open railway production to Hitachi, but no British firm would get corresponding access to Japan's market," he said.

"This lack of reciprocity can't endure forever. Some in Europe would rather take a tougher stance against Japan, so unless change comes, it will see less openness and more backlash."

Mandelson called on Japan to learn from the success of its involvement in the British car industry. "It is sad to say that there is no UK equivalent to Nissan or Toyota in Japan," he said. "Britain's presence here is hardly weak ... but it's not the sort of presence you'd expect to see in the world's second-biggest economy."

[Number11]

No government or politician wants fairness and reciprocity. They're all just looking for an advantage.

[sublight]

"It is sad to say that there is no UK equivalent to Nissan or Toyota in Japan,"

There's no UK equivalent to Nissan or Toyota in the UK, either.

[samuraiwig]

There's no UK equivalent to Nissan or Toyota in the UK, either.

Indeed.

And his Hitachi example is a bit weird. If he feels like that then why did the British govt choose a Japanese company?

Overall he makes some valid points, but nothing new. Japan will open up to FDI when it needs to, not before. I know some people will argue that it needs to now, or needed to 10 years ago, but for all its woes it's still the second biggest economy. And for better or worse there are a bunch of cultural and social reasons why Japan is more conservative about this than other countries.