Japanese Labour Export Policy Is Both Unclear And contradictory

February 27, 2021 by No Comments

The Japanese Government has been a key player in the establishment of bilateral free trade negotiations with the European Union. Trade between both countries is heavily controlled by the Government in a manner similar to the US Free Trade Agreement. It is essential for the smooth running of the Japanese economy and a strong international trading position. Negotiations on the future of Japan’s Free Trade Area Agreement (FTA) are underway with the European Union. The chief sticking points in the negotiations concern the role of the Japanese pharmaceutical industries in the negotiation and how they can maintain competitiveness in the agricultural industry vietproud.

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A major factor holding back the progress of the negotiations is the reluctance of the Japanese authorities to open up the market for foreign investment. Pharmaceutical companies have traditionally depended on Japanese Government regulation and rigid labour laws to protect their interests. The last few years the pharmaceutical industry in Japan has been forced to close several of its domestic laboratories. In response to this reaction, the Government announced that it was planning to liberalize the pharmaceutical industries. This was met with sharp criticism from pharmaceutical company executives who view this as an attempt to shift their investment to countries with more liberal labour laws.

These comments were not entirely unwarranted. Japan is one of the world’s largest exporters of medicines and other pharmaceutical products and it’s obvious that it would be willing to open up its domestic market to foreign competition in return for foreign investment and jobs. It’s also understandable that pharmaceutical companies need access to raw material and capital resources to expand and increase production capacity. Pharmaceutical manufacturing in Japan is already well established and poses no threat to the profitability of Japanese pharmaceuticals. If the Government really wants to help foreign pharmaceutical firms do well in their business operations in Japan then it must provide a level playing field so that these companies are not at a disadvantage when negotiating trade deals with other countries.

How does the Government plan to make available these opportunities? The policy adopted by the Government in the negotiation of the current free trade agreement is quite ambiguous. On one hand it claims to support free trade, but on the other it simultaneously warns against dumping and supports protecting the domestic interests of Japanese pharmaceutical companies by ensuring adequate protection for patented technology. In effect the Government seems to adopt two contradictory positions in a matter of only two paragraphs!

It is very difficult to understand where the Government is aiming with this policy as there has been little or no attempt to address the issues of poor working conditions in the pharmaceutical industry in Japan or the low cost of patented pharmaceutical products. On the one hand, the thrust of the policy is to ensure access to affordable healthcare for all and it claims to promote competition by allowing pharmaceutical companies to develop generic forms of patented drugs. However the reality is that generic forms of patented drugs have not been developed and indeed the costs of producing them in Japan are higher than the costs of producing them in countries outside of Japan where they will be cheaper to produce. The result is that thousands of people in other countries who need affordable healthcare will be left out of the loop while the Japanese pharmaceutical industry continues to rake in the cash!

The real disaster here is that the Japanese pharmaceutical industry has already been facing a crisis due to spiralling costs of generic drugs which have forced hundreds of companies to pull out of business and many more to reduce their staff strength and even cut their staff levels. Now that the Government has attempted to rectify the situation by giving the pharmaceutical industry some temporary relief, the problem will re-occur and these thousands of people who depend on the NHS for health care will once more find themselves without a voice! Worse still, the situation looks like it will worsen. As the world recovers from the recent economic crisis a lot of people who were counting on exports to secure their economic future now find themselves unemployed and without any prospects of the future. The Japanese Government has not done enough to prevent this situation and its failure to act will not help their credibility in the international community and may well harm future trading agreements with other countries.

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