26/04/2014 Talking Business with Linda Yueh


26/04/2014

Similar Content

Browse content similar to 26/04/2014. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

sank in 1912. Now on BBC News it's time for

:00:00.:00:00.

talking business with Linda Yueh. Will the US pivot towards Asia?

:00:00.:00:09.

President Obama aims to do so by creating the biggest free`trade area

:00:10.:00:11.

in the world, linking America to Asia. Here in Tokyo, I am Linda Yueh

:00:12.:00:19.

and we are Talking Business. A warm welcome to the programme. A

:00:20.:00:50.

centrepiece of the second term of US President Obama is his Asia pivot

:00:51.:00:52.

strategy. He wants to rebalance America's foreign and economic

:00:53.:00:55.

policy away from the Middle East and Europe, towards fast`growing Asia.

:00:56.:01:00.

It is not just a geopolitical rebalancing, economics is at the

:01:01.:01:05.

heart of it. However, after failed attempts to travel to the region

:01:06.:01:07.

last year, he's hoping a four`country tour of Japan, Korea,

:01:08.:01:10.

Malaysia and the Philippines will get the centrepiece of that policy

:01:11.:01:23.

going. Which is to create the biggest free`trade area in the world

:01:24.:01:26.

linking 12 countries around the Pacific Rim in what he is calling

:01:27.:01:33.

the Trans`Pacific Partnership. The key to getting the TPP agreed will

:01:34.:01:37.

be whether the US can negotiate with Japan. `` what the US can negotiate

:01:38.:01:47.

with Japan. I went to find out what that would take. Springtime. The

:01:48.:01:53.

promise of a new beginning. But before you can reap, you have to

:01:54.:02:04.

sow. 80`year`old Shigeo Endo is preparing his rice fields as he has

:02:05.:02:09.

for over half a century. Farmers like him have been protected by the

:02:10.:02:17.

government. There is a 700 `` there is 878% tax on imported rice. He

:02:18.:02:23.

does not want to see that end. TRANSLATION:

:02:24.:02:30.

We cannot compete with countries like Australia or Canada which farm

:02:31.:02:34.

on a large scale. If terrorists are abolished, people will go with what

:02:35.:02:39.

is cheaper. `` if terrorists are abolished. I think Japanese farming

:02:40.:02:46.

`` if taxes are abolished. I think Japanese farming will be fatally

:02:47.:02:49.

wounded. He and his family have been shielded

:02:50.:02:54.

for decades. It is a sore point for the Americans and the proposed

:02:55.:03:01.

agreement. But the Trans`Pacific Partnership, TPP, is not just about

:03:02.:03:09.

trade. It is the key to Obama's strategy to align the US more

:03:10.:03:16.

towards Asia. But that makes no difference to these protesters.

:03:17.:03:21.

These are the most vocal critics of the TPP. Japan and the US are major

:03:22.:03:26.

trading nations who trade in not with each other so of course there

:03:27.:03:31.

are some benefits in having more free trade. What is so special about

:03:32.:03:36.

this one? Is it more about who is not at the table? Abe put his hat in

:03:37.:03:44.

the ring because he wanted to prove to the United States that he was a

:03:45.:03:54.

reliable alliance partner. So I think Japan will look at TPP not

:03:55.:03:59.

just because of `` is not just through the `` not just for the

:04:00.:04:04.

economic but also political is users such as China's ambitions for the

:04:05.:04:13.

region. They celebrate the arrival of the new season. President Obama

:04:14.:04:17.

wants to celebrate a new spring, a new era, even the second opening of

:04:18.:04:24.

Japan. Prime Minister Abe is hoping for trade to deliver growth. With so

:04:25.:04:30.

much at stake, both Abe and Obama will hope to deliver progress. But

:04:31.:04:36.

it will be baby steps. So the Trans`Pacific Partnership is a key

:04:37.:04:40.

part of Obama's Asia pivot. It is also what the Japanese describe as

:04:41.:04:50.

the facilitation of the second opening of Japan. Expectation are

:04:51.:04:55.

high that a great deal could revive the Japanese economy. Two mile over

:04:56.:04:59.

these issues, I caught up with the Dean of the Asian development bank

:05:00.:05:04.

Institute. Is there something special about the relationship with

:05:05.:05:08.

the United States, President Obama will be talking about trade and a

:05:09.:05:14.

new trade deal. I think the visit of President Obama is very important

:05:15.:05:18.

because North Korea is a fisting our region. `` is existing in our

:05:19.:05:26.

region. There economic situation is very different from South Korea and

:05:27.:05:32.

Japan. So it is important for him to visit our country. Secondly, we have

:05:33.:05:38.

trade disputes about automobiles. Many people in Japan prefer free

:05:39.:05:45.

trade. But farmers are very cautious about the mobility of goods and

:05:46.:05:51.

services. With China rising as a partnership but the TPP excluding

:05:52.:05:54.

China, is there something about the positioning that would benefit the

:05:55.:06:02.

US and Japan? I think, because China is different from Japan and US

:06:03.:06:09.

relationships. Japan and US is free exchange of mobility. But China

:06:10.:06:16.

still based `` is still based on dollar`denominated currency. So the

:06:17.:06:21.

first step for China is gradually changing its currency basket to

:06:22.:06:29.

gradual depreciation. Also, the capital inflow and outflow has to be

:06:30.:06:34.

mobilised. Is there something about excluding China that will make it

:06:35.:06:39.

difficult for this region? Because it is so integrated into the supply

:06:40.:06:45.

chain? In the short`term, China has to change its rate policy. It used

:06:46.:06:54.

to be `` it needs to lower its exchange rate and come to the

:06:55.:07:00.

optimal basket currency system. At the same time, free mobility of

:07:01.:07:04.

capital for China will be another thing. So it will take several

:07:05.:07:11.

years, but in those fluctuations, we should come to the same table with

:07:12.:07:16.

the others. Is this supporting the reforms that the Prime Minister has

:07:17.:07:21.

already done? Last autumn, he has decided to cut back on the actual

:07:22.:07:25.

subsidy system because it is part of making the economy more

:07:26.:07:31.

competitive. So sometimes countries use trade agreements to push through

:07:32.:07:35.

hard domestic reforms that increase productivity of their economy. Is

:07:36.:07:40.

this one of the reasons why he's pointing to free trade is important

:07:41.:07:44.

to boost growth? I think that frequent addition is very

:07:45.:07:48.

important. Farmers have to face, edition. However `` farmers have to

:07:49.:07:56.

face competition. But it is a gradual adjustment. So you think

:07:57.:08:06.

that would be the main benefit, to increase the competitiveness of the

:08:07.:08:09.

agricultural sector. Would that be enough to boost the aggregate `` the

:08:10.:08:15.

Japanese economy? Not necessarily. We are faced with an ageing

:08:16.:08:19.

population. We have to utilise those old people, and female participation

:08:20.:08:28.

in the labour force. Those are the two important issues. The third one

:08:29.:08:32.

is that banks and financial institutions are sometimes reluctant

:08:33.:08:36.

to make loans to start`up companies because it is risky. So the banks

:08:37.:08:40.

should not necessarily provide money, but we can open them to

:08:41.:08:47.

crowdfunding `` to crowdfunding so that the general public can support

:08:48.:08:52.

them. So it sounds to me as if you don't think trade could play a big

:08:53.:08:55.

part in turning around Japan's fortunes. We used to have a very

:08:56.:09:05.

high ratio of export. Now it is only 10% of the economy. Of course free

:09:06.:09:11.

trade is important, but changing the domestic economy is also important.

:09:12.:09:16.

The Trans`Pacific Partnership includes ten other countries

:09:17.:09:21.

including Japan and the US. So how would a free`trade area affect a

:09:22.:09:24.

middle`income country like Malaysia, one of the Paul Nations ``

:09:25.:09:32.

one of the four nations on Obama's itinerary. I went to find out. On

:09:33.:09:39.

the verge of becoming rich, Malaysia was once a fast`growing economy.

:09:40.:09:43.

Before it was struck by financial crisis. There is hope that a

:09:44.:09:48.

free`trade agreement will get it moving again but there are big

:09:49.:09:55.

challenges to overcome. This media entrepreneur wants to see his

:09:56.:10:00.

country tackle them. What is the difference between... Private

:10:01.:10:05.

businesses like him see the future lying beyond Malaysia's borders.

:10:06.:10:10.

Operating in a country of only 30 million, he needs overseas markets

:10:11.:10:15.

to grow. The challenge for Malaysia is that we have been a medium`sized

:10:16.:10:21.

country for a long time. It is time for us to catch up with the rest of

:10:22.:10:27.

the world. We need to tackle corruption, that is what is holding

:10:28.:10:31.

us back. We need to get our act together and move on. Those at the

:10:32.:10:37.

very top of already benefited from Malaysia's growth. But the country

:10:38.:10:43.

as a whole can win if it opens up trade and links with the biggest

:10:44.:10:47.

markets in the world. The problem is there will be some who lose. Ethnic

:10:48.:10:57.

Malays have been protected by the government through affirmative

:10:58.:11:00.

action programmes which give them ownership of key industries. It is

:11:01.:11:04.

where the accusations of cronyism stem from. The US has pushed for

:11:05.:11:08.

reforming those policies as the price for admission into its

:11:09.:11:20.

free`trade area. It is a concern for others. They are generalising the

:11:21.:11:24.

issues without understanding complexities. Trade deals take years

:11:25.:11:35.

to agree. As the US negotiates with the big players in Asia like Japan

:11:36.:11:42.

it is not a dance of equal part was. The little guy does not get to lead.

:11:43.:11:48.

The president is crucial for any negotiations. But he does not have

:11:49.:11:55.

the final word on trade. Any deal must be ratified by the US Congress.

:11:56.:12:07.

This report from New York. This is the UPS sorting facility and can

:12:08.:12:12.

tuck it. Thousands of packages making their way through here every

:12:13.:12:17.

day. If the US agrees on a free`trade deal with other countries

:12:18.:12:24.

it could get us there. We would see tremendous growth. We have seen that

:12:25.:12:33.

in past trade agreements. Like the US ` the Singapore trade agreement.

:12:34.:12:40.

US`Chile. A 20% increase in volume with those. But past agreements have

:12:41.:12:46.

taken manufacturing jobs out of the US. Which is why not all businesses

:12:47.:12:52.

will get behind a trade partnership linking nearly 60% of local GDP.

:12:53.:13:00.

Businesses alike forward, maker of the iconic mustang. It could have

:13:01.:13:06.

our business. It could take jobs away from American workers. It could

:13:07.:13:14.

use it to manipulate other countries currencies. Exporting employment

:13:15.:13:18.

problems to other parts of the world. We do not think that this

:13:19.:13:24.

rate. American manufacturers often complain that countries engaging in

:13:25.:13:29.

currency manipulation by keeping it artificially low has had a

:13:30.:13:32.

devastating impact on the American manufacturing sector. In last year

:13:33.:13:39.

is a state of the union address President Obama made specific

:13:40.:13:46.

mention of the TPP. To boost exports, support jobs, level the

:13:47.:13:50.

playing field in the growing markets of Asia, we intend to complete

:13:51.:13:57.

negotiations. Tonight I am and sink talks on a comprehensive

:13:58.:13:59.

transatlantic trade and investment partnership. `` announcing. Trade

:14:00.:14:05.

that is fair and free supports millions of American jobs. But this

:14:06.:14:13.

year, no reference to the deal. Getting fast`track authority to pass

:14:14.:14:17.

deals with the crucial to extracting concessions from Japan and other

:14:18.:14:22.

countries. But getting that through a divided Congress is unlikely. A

:14:23.:14:26.

sign that the biggest obstacle for the president could be right here at

:14:27.:14:34.

home. Before it gets to the US Congress

:14:35.:14:37.

there are still a number of issues to sort in the transpacific

:14:38.:14:42.

partnership. To discuss the prospect I got up with a professor at Keele

:14:43.:14:51.

University, and it chief strategist at CES or a. It is more competent

:14:52.:14:59.

than it looks. What we're talking about at the moment is principally

:15:00.:15:04.

agriculture. Because we cannot talk about the other measures. For Japan

:15:05.:15:11.

and the US agriculture is a certain percentage of GDP, Japan wants to

:15:12.:15:16.

open up the hermetically sealed US auto market. 2.5% in tariffs. 25%

:15:17.:15:26.

with trucks. Until we can get something moved on fast`track gauche

:15:27.:15:29.

nations then the rest of the things cannot discussed. Fast`track is

:15:30.:15:35.

obviously down to President Obama not having defaulted to put forward

:15:36.:15:38.

a trade deal with the Congress and it working. There are a few dead it

:15:39.:15:44.

were just great through. `` whereas a few dead. `` whereas if he did. It

:15:45.:15:54.

would be an improvement of the investment climate. That is

:15:55.:16:00.

definitely important for the Japanese economy. That is not the

:16:01.:16:09.

rhetoric we are getting. It sounds like the impasse over agriculture.

:16:10.:16:16.

It appeared likely one year ago that they would give away a lot of the

:16:17.:16:21.

protection for agriculture. When you look at it farmers to not have a lot

:16:22.:16:26.

of power. The average age of a Japanese farmer is 66. Within five

:16:27.:16:31.

years about one third will have retired. Who will they go to and

:16:32.:16:38.

from the government? The opposition has called very little political

:16:39.:16:41.

support. It is an urban party, not... What I am getting at is, you

:16:42.:16:49.

are describing a scenario that does not seem to fit what is happening.

:16:50.:16:58.

Who would give away agriculture as a negotiating eight when you anything

:16:59.:17:06.

in return? That is the problem. Cannot get anything in return until

:17:07.:17:13.

you have FDA. It could be reversed. Because Congress can pick apart the

:17:14.:17:20.

agreement? Essentially this is a problem of American impotence. They

:17:21.:17:26.

were unable to turn up to the original negotiations because they

:17:27.:17:29.

were arguing about the debt ceiling. Now they think they have had their

:17:30.:17:34.

power taken away from them. They present this as if it is

:17:35.:17:38.

factionalism within Japanese politics but actually it is

:17:39.:17:41.

President Obama who cannot get support from his own party, the

:17:42.:17:46.

Democrats. It is his own faction that is holding us back. The US

:17:47.:17:52.

Congress may blackmail at the last moment even if negotiators agree. So

:17:53.:17:59.

that be a difficulty in making a big decision. But at the same time,

:18:00.:18:07.

Japan and other countries can influence to some extent US

:18:08.:18:14.

politics. That is a sort of thing Japan should do. That is the kind of

:18:15.:18:18.

claim the Japanese seder pedalling. That somehow TPP will provide the

:18:19.:18:26.

structural reforms. It will raise competitiveness. Driving at over 2%.

:18:27.:18:38.

It is a small sector already. 1.3% of GDP. It does not really generate

:18:39.:18:43.

growth. That is it different issue but it is very symbolic course will

:18:44.:18:49.

stop TPP will affect overall activities of the Japanese farmers.

:18:50.:18:55.

Is that not the conundrum? You are being held up over agriculture as a

:18:56.:19:03.

bargaining chip but the reality is most of the other parts of TPP and

:19:04.:19:10.

deep trade integration? It means introducing competitiveness. Is that

:19:11.:19:20.

not ultimately why TPP would not advance, there are certain groups

:19:21.:19:38.

that will be hurt by it? Even if we have a replacement of major tariffs

:19:39.:19:44.

with domestic subsidies, some sort of ending of obligations, still we

:19:45.:19:52.

could do that. It just does not seem like a gun to get much of an

:19:53.:20:00.

agreement. `` you are going to get. Until President Obama has the

:20:01.:20:07.

authority... He may not. It is quite possible. If it falls apart there

:20:08.:20:12.

are lots of other trade treaties being talked about. This is being

:20:13.:20:20.

held up as special. Because it is not talking about agriculture. It is

:20:21.:20:24.

supposed to be a intellectual dropped, state interest... That is

:20:25.:20:33.

important. The problem is getting an agreement, Japan, US, Europe, they

:20:34.:20:40.

have such low import tariffs. If your agriculture it agriculture it

:20:41.:20:44.

is 1.3 for Japan, two for the US. Not a lot of protection. What you

:20:45.:20:49.

are trying to get out of this is some sort of agreement on

:20:50.:20:57.

intellectual property but the whole thing is being held up because the

:20:58.:21:01.

Americans cannot hold up the part of the agreement. Do you think we will

:21:02.:21:08.

get the TPP in the foreseeable future? Within a couple of years? I

:21:09.:21:18.

think you are pessimistic. We still have the possibility to get through

:21:19.:21:21.

negotiations this week or next month. It is not just a bilateral

:21:22.:21:32.

deal. Nicholas? What has got to Japan moving faster is watching a

:21:33.:21:40.

lot of FC is get tied up by Korea. Japan wants the stunt particularly

:21:41.:21:42.

for the protection of state`owned enterprises, intellectual property,

:21:43.:21:48.

it is being held up by stupid things. It will ultimately get done.

:21:49.:21:55.

But I would have thought that it is slow`moving for the time being.

:21:56.:21:57.

Until the authorities reached decisions. Whether it is members of

:21:58.:22:07.

the US Congress, companies in Malaysia, Japanese farmers, they are

:22:08.:22:11.

among the obstacles to realising a giant free trade area in the

:22:12.:22:17.

Pacific. They are also standing in the way of President Obama achieving

:22:18.:22:21.

his Asia have it with less than two years lecturing his term. `` Asia

:22:22.:22:27.

pivot. And the stakes could not be higher. That is all we have time

:22:28.:22:34.

for. Check out the website, or contact me on Twitter.

:22:35.:22:45.

Through the course of today an area of low pressure is basically

:22:46.:22:50.

wrapping itself around the British ales. That is the cloud you see

:22:51.:22:57.

here. Heavy and persistent rain into eastern coasts. Showers and the

:22:58.:23:01.

south`west. Overnight, they will

:23:02.:23:02.

Download Subtitles

SRT

ASS