Japan’s free-trade dilemma -- Yes, it should

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http://www.economist.com/node/21534837

IT TAKES a minute or two to work out what is refreshingly odd about Hideki Shimazaki’s lettuce farm in Nagano on Japan’s main island. Then it dawns: all the workers are 20- or 30-somethings, with the same lop-sided grins and earthy jokes common to young farmers elsewhere in the world.

In Japan, this is incongruous. Most farmers are over 60, and their task is solitary: growing rice in small paddies, mostly on a part-time basis. In contrast, Mr Shimazaki’s lettuces spread across hillsides, and his business, Top River, could grow far more if only other landowners would let out unproductive land.

On the face of it, Mr Shimazaki should have good reason to support Japan’s involvement in talks to forge the Trans-Pacific Partnership (TPP) that America’s president, Barack Obama, and the leaders of eight other countries are keen to promote at an Asia-Pacific trade bash, APEC, in Honolulu on November 12th-13th. After all, a powerful incentive for Japan to take part is to make its farm sector, which contributes just 1% to GDP, more competitive. A tariff on rice imports of nearly 800% and subsidies underpinning the rice price keep old farmers in the game and hold back on land consolidation.

Yet Mr Shimazaki is hesitant about free trade. His position highlights the delicate task that the new prime minister, Yoshihiko Noda of the Democratic Party of Japan (DPJ), has in convincing the public that Japan should be the tenth country to join the TPP talks. Mr Shimazaki thinks farm liberalisation is inevitable as old farmers retire, but like many is worried about the costs of open borders on other uncompetitive parts of the economy, such as the finance and construction industries.