Fran O'Sullivan: Japan PM's visit likely to concern more than free trade talks

11 comments
Japanese Prime Minister Shinzo Abe. Photo / AP
Japanese Prime Minister Shinzo Abe. Photo / AP

John Key will have to pick his way through a diplomatic minefield when he hosts Japan PM Shinzo Abe in Auckland on Monday during his first formal visit to New Zealand.

Abe's charisma will also be on show when he visits Christchurch to pay tribute to the 28 Japanese citizens who lost their lives in the February 2011 earthquake. There is a strong relationship building element to the visit by the politician whose signature economic reforms - particularly the "third arrow" or growth strategy - have been dubbed Abenomics.

But from the NZ Prime Minister's perspective there is business to be done. When the Abe visit was first scheduled it was portrayed as an opportunity for Key to emphasise the "Pathway Forward" for the conclusion of the controversial Trans Pacific Partnership free-trade pact - known as TPP - which has been agreed between Abe and Barack Obama earlier this year.

But the Abe Cabinet's decision to end the post-World War II ban on Japanese troops fighting overseas means Monday's visit will take on an even stronger geo-strategic focus. Particularly as China is opposed to Japan asserting its military "rights" to protect its own overseas interests.

These issues are fundamentally of much more importance to New Zealand than which mid-level foreign affairs protocol officials failed to convey a direct message that claiming diplomatic privileges for the Malaysian diplomat Muhammad Rizalman bin Ismail over the alleged sexual assault of a young woman was not a goer.

That affair has exposed the readiness of Foreign Affairs Minister Murray McCully to blame officials for failures that have negative consequences rather than probe too deeply himself into why his elite ministry has failed to perform to the standards expected of them.

But the blame-storming will be swept to one side while Abe is in town.

Key has indicated he will raise the tempo on TPP with Abe by stressing that New Zealand wants a comprehensive and high-quality deal. The danger for the TPP negotiations is that Abe will not be persuaded that Japan should put much more on the table for TPP than the tradeoffs in the low-ball preferential trade agreement signed between Japan and Australia.

What Key wants is for Japan to sign up to a TPP arrangement that will have Japan phase out its agricultural tariffs over a lengthy set period.

Abe clearly appreciates that signing up to TPP will enable Japan to spearhead at a much faster rate the economic reforms necessary to ensure the long-term competitiveness of its prime industrial and agricultural sectors which have increasingly come under threat from its neighbours.

Key has signalled New Zealand will not want to sign up to a TPP which does not set high standards for the future. All his persuasive powers will be necessary to ensure that Abe - who will move on to Australia after New Zealand - stays focused on the bigger trading picture.

But the signs are that Japan is keeping its outward focus. Already Japan is lifting its investment footprint in the Asia-Pacific.

Abe will be accompanied to New Zealand by a high-powered Japanese business delegation, led by Kazuhisa Shinoda, chairman of Oji Holdings and also the Japanese chairman of the Japan/NZ Business Council. Oji Holdings recently bought the Carter Holt Harvey's pulp and paper and packaging businesses for $1.037 billion in a joint-venture with the Innovation Network of Japan.

Other major Japanese investors in Abe's business delegation include representatives from Sumitomo, Nippon Steel, Rinnai, Mitsubishi, NYK Line and the JTB Group.

Expect the delegation to strongly promote TPP during its meeting with NZ interests.

But if Abe feels he cannot carry the Japanese public with him for a top-quality deal, it is likely the Japanese business delegation will start the softening up process to lower expectations while here.

- NZ Herald

Fran O'Sullivan

A columnist for the NZ Herald

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

Have your say

We aim to have healthy debate. But we won't publish comments that abuse others. View commenting guidelines.

1200 characters left

Sort by
  • Oldest

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production apcf03 at 28 Dec 2014 17:19:38 Processing Time: 766ms