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World awaits post-election Japan -

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World awaits post-election Japan

Eleanor Hall reported this story on Monday, August 31, 2009 12:34:00

ELEANOR HALL: Japan is Australia's largest trading partner and the Japanese and Australian
Governments have recently been negotiating a free trade deal.

So what could this major shift in Japan's political landscape mean for Australia and for the deal?

A short time ago I spoke about this to Professor Jenny Corbett, who is the executive director of
the Australia-Japan Research Centre.

ELEANOR HALL: Professor Corbett, this is a massive electoral victory for Yukio Hatoyama. Some
commentators are saying it is a pivotal historic moment for Japan. What is your sense of its
significance?

JENNY CORBETT: I think it is very significant. It is clearly a huge defeat for the LDP. The DPJ is
not as big a break with past political traditions as sometimes portrayed so in that sense we won't
necessarily see enormous change in policy settings.

ELEANOR HALL: Although Mr Hatoyama shook things up a little in the US recently with some comments
about the end of US-led globalism. What changes is he likely to make in Japan's foreign policy?

JENNY CORBETT: Well he has spoken of changing the balance of power and having slightly more
independent Japanese foreign policy which may mean more disagreements with the United States from
time to time such as the disagreement over refuelling their ships heading for Afghanistan.

He is better positioned to build more friendly relations with China and Korea. He is more sensitive
to their issues than his predecessor and we help to balance China from Japan's perspective.

So I don't think that there would be a development that excluded Australia in any way.

ELEANOR HALL: Australia and Japan are in the midst of some tense negotiations on the free trade
deal with agriculture already a major sticking point. Now Mr Hatoyama's party has pledged to take
an even tougher line on agriculture. Does that mean the FTA could be in doubt?

JENNY CORBETT: I think it will be tougher to negotiation. The Hatoyama Government has got a
somewhat schizophrenic position on trade.

On the one hand they are saying that they are pro-trade and they are keen to develop free trade
negotiations with a number of their developed country partners. But at the same time they have been
promising to protect those who are disadvantaged and they certainly have been saying they'd protect
farmers so the agriculture element of our FTA is going to be more difficult to negotiate.

ELEANOR HALL: And what could that mean then for the whole deal?

JENNY CORBETT: Well I think it will take some skilful stepping around the barriers if it is to go
ahead and it does mean that there are other opportunities which might be developed to compensate
for anything that might have to be missing in the agreement.

I think there are lots of areas where Australia and Japan have great opportunities for mutual
benefit - developing services, trade, having Australia's expertise in areas like infrastructure and
the mechanisms for developing public private partnerships to build infrastructure.

These are things where Australia has lots of expertise that Japan needs and there are possibilities
for promoting those through an FTA so it will be a question of what the negotiators are able to
find as common ground.

ELEANOR HALL: So could the changes that this new Government is saying it will push through
domestically open up any new investment and trade opportunities for Australia in that regard?

JENNY CORBETT: They might. Certainly their domestic policy is going to be geared towards helping
the less privileged in Japan, the emerging groups who are at the bottom of the pile. And that is
lots of people in part-time employment, it is the elderly. There will be much more concentration on
welfare and social safety nets.

But the real issue is that this Government hasn't yet enunciated a policy to get growth going
again. There isn't a strategy for how to improve productivity. There isn't a strategy about how to
move economic reform forward. And those are the things that really provide the opportunities for
Japan and for Australia and we just don't know what they are proposing yet.

ELEANOR HALL: Do you think Australia is sufficiently prepared to take up any opportunities that do
arise?

JENNY CORBETT: I think fairly well although the media coverage recently has left Japan somewhat out
of the picture and its focussed mostly on China.

There is a very big group of Australian businesses who understand clearly that Japan is their major
market and they've gone on building relationships with Japan. They understand the opportunities
there pretty well.

ELEANOR HALL: And they're not disadvantaged by this major shift in the political situation?

JENNY CORBETT: I don't think so except that there will be some uncertainty. There will be a period
in which we don't know who will be powerful. We don't know which of the established relationships
between politicians and bureaucrats will be maintained so there will be a period in which we are
trying still to find out who is in charge and that will take some adjusting to.

ELEANOR HALL: Professor Corbett, thanks very much for joining us.

JENNY CORBETT: You're welcome. Thanks.

ELEANOR HALL: And Professor Jenny Corbett is the executive director of the Australia-Japan Research
Centre at the Australian National University.