02
03/11
Kan Pledges to Open Up Japan, Seek Freer Trade With EU, Asia
“The spirit of opening up the nation is now called for in Japan,” Kan said in a speech today at the World Economic Forum in Davos, Switzerland. “Free trade is the best way to share prosperity with the rest of the world.”
Kan is struggling to jumpstart an economy burdened by deflation, rising social welfare costs and the world’s largest public debt. He is seeking to overcome political opposition and join the U.S.-led Trans-Pacific Partnership trade talks with nine Asia-Pacific countries by June.
“In regard to the TPP, Japan will continue to hold consultations with the U.S. and other relevant nations,” Kan said. “We also look forward to beginning negotiations with the EU, another important trade partner for Japan.”
Standard & Poor’s two days ago lowered the country’s sovereign debt rating, citing the lack of a “coherent strategy” by Kan’s ruling Democratic Party of Japan to cope with a debt burden that is forecast to reach 210 percent of gross domestic product in 2012. That’s the highest among countries tracked by the Organization for Economic Cooperation and Development.
‘Crisis’ Kan this month warned of a “crisis,” and called for a debate on raising the 5 percent national sales tax to boost revenue. The government may be unable to meet its pledge to limit bond sales to 44.3 trillion yen ($539 billion) a year, Finance Ministry estimates suggest. A revenue gap of 49.5 trillion yen for the year starting April 2012 will widen to 51.8 trillion yen the year after, according to the ministry.
Kan reiterated his intention to decide by June policies to make a decision on the TPP negotiations, as well as to revitalize the country’s agriculture industry.
Japan’s economy may have contracted last quarter on waning effects of stimulus and the strong yen that threatens exporter profits.
China last year likely passed Japan to become the world’s second-largest economy. Asked about this, Kan said that the while the development was “welcome,” China now “has a greater role to play internationally, and I hope they will fulfill it.”