KEY POINTS:
Prime Minister Helen Clark believes the impact of the international food crisis is the key reason why the Japanese Government has agreed to a ground-breaking study on the benefits of a bilateral free trade agreement.
Japan has been rocked by escalating prices for basic foodstuffs which has led
to prime imported products like New Zealand butter being in such short supply that supermarkets have posted apologies for the missing gaps on their shelves.
In her speech to the inaugural Japan New Zealand Partnership Forum in Tokyo last week, Clark said the world's food supply was under great pressure from growing populations and their growing middle classes.
"In these circumstances, it is vital for major food importing nations, like Japan, to secure their supply chains.
"So at this time, there is a growing coincidence of interest between New Zealand's needs as an exporter and Japan's needs as an importer."
Japanese sensitivities on agricultural protectionism have stymied previous bids to form a closer economic partnership with Japan. But the China FTA provides long phase-out periods for Chinese agriculture tariffs and the Prime Minister was confident ways could be found to manage Japanese concerns.
At the forum - held under Chatham House rules - it was clear that Japanese officials are concerned by what they have termed a "food shock".
Clark was clearly buoyed by the reaction of one very senior Japanese businessman who she said had told the forum that Japan had never failed to complete its negotiations on FTAs.
That was a signal, she said, noting that the businessman was a former senior official at the Japanese Ministry of International Trade and Industry. She later said the next step would be for officials to agree on terms of reference for the free trade study which she hopes will point to the need for a comprehensive deal - rather than a political agreement.
National trade spokesman Tim Groser assured the Japanese that his party supported the Government's move and that the stance would be continued if there was a change of Government in New Zealand.
The Japanese situation is made more complex by the ageing Japanese farming community. The average age of farmers in Japan is now approaching 70 and young people prefer city life to that of their forbears.
The two forum co-chairs Yoshihko Miyauchi (Japan) and Philip Burdon (New Zealand) confirmed to the Herald that Japanese fears over food security were a major factor in the breakthrough.
Miyauchi - who chairs the Asia Pacific committee of Japan's premier business organisation the Nippon Keidanren - said Japan sourced just 39 per cent of its food from within its own borders.
Miyauchi stressed that Japan, which is not resource rich, was used to sourcing offshore and 98 per cent of its energy came from foreign sources. He suggested that if the agriculture sector is reformed and made more productive Japan would increase its own food security.
Burdon, who is chairman of AsiaNew Zealand, said the relationship had reached a watershed. He was buoyed by the forum and confident that it would be repeated.
Japanese Prime Minister Yasuo Fukuda was not present at the forum.
* Fran O'Sullivan received assistance towards accommodation in Japan from the NZ International Business Forum.
