Small Japanese companies supported in TPP plan

The Japanese Govt is hoping the TPP will give its smaller businesses a tailwind to expand overseas. Photo / iStock

The Japanese government has drafted an outline of comprehensive policies related to the Trans-Pacific Partnership free trade pact as early as Wednesday, sources said.

The outline includes support for overseas ventures by small and midsize companies, with the goal of having their attempts to open markets and expand operations succeed at least 60 percent of the time, the sources said Friday.

These and other policies would seek to use the TPP as a tailwind to enable domestic businesses to go on the offensive. Yet the outline also includes "defensive policies," that would seek to protect rice, beef and pork producers from an expected increase in imports.

The government may include policies based on the outline in a supplemental budget for fiscal 2015 and its initial budget for fiscal 2016.

The draft states that the TPP is the "trump card" of Prime Minister Shinzo Abe's economic policies, known as Abenomics.

"The government will give its full support to creating a market of 800 million people for local industries, agricultural products and other goods," the outline states.

To promote exports by small and midsize companies, the outline proposes creating consortiums with members that include the government, local authorities and the chambers of commerce and industry. These would provide support in areas such as product development and meeting international standards, as well as help companies seeking to expand overseas in particular fields, such as food culture and other "Cool Japan" areas, and environmental technology.

The outline also emphasizes the role the TPP could play in achieving the targets of the government's growth strategy.

The 12 nations that are participating in the TPP have agreed to create a committee on small and midsize companies to discuss policies to expand exports and on other issues. The idea is to help small and midsize companies, not just large corporations, use the TPP to boost their businesses.

The outline also calls for stimulating the domestic economy through foreign investment, the sources said.

It would set a goal of having global companies establish at least 470 centers, such as for research and development, by fiscal 2019. This is to be achieved through the Japan External Trade Organization.

The outline also emphasises the role the TPP could play in achieving the targets of the government's growth strategy.

The outline also includes policies to protect producers of rice, beef, pork and the other so-called five important items.

One example is to use the abolishment and lowering of tariffs by member countries to export agricultural, forestry, fishery and food goods valued at a total of ¥1 trillion before the current target date of 2020.

TPP member nations would also be required to open major public works and other projects to international bidding and emerging economies would have to abolish non-tariff barriers.

In light of this, the outline sets a goal of winning orders for power plants, high-speed rail and other infrastructure projects worth about ¥30 trillion in 2020.

The outline also includes policies to protect producers of rice, beef, pork and the other so-called five important items.

For rice, the government would seek to prevent prices from falling due to the new import quota for U.S. and Australian rice, by increasing purchases for government rice stocks.

It also stipulates that a system to cover the deficits of beef and pork producers, who will be facing more open markets, should be passed into law, with the goal of increasing the proportion of deficit coverage from 80 percent to 90 percent.