Japan’s Foreign Trade: The Low-Cost Way To Japanese Wages
The Japanese Government is doing all that it can to support its agricultural industry and the Japanese Labour Exporting Corporation (NZEX) is helping by subsidising Japanese farming. The NZEX was established in 1958 and is currently aiming at building a network of affiliates in China, Korea, India and Vietnam. By creating its own niche in these markets, the NZEX is seeking to provide a responsive, flexible and cost-effective platform through which exporters can market their products.
Japan’s membership to the World Trade Organization (WTO) in December allows it to impose certain import duties on goods coming from other countries. These duties, and others like them, are designed to help Japan attain higher exports and reduce its dependency on other countries for its raw materials. The Government is therefore looking to increase its exports through the means of subsidies and tariffs.
The means to achieve this objective is the introduction of a quota system for the recruitment of skilled manpower. According to the plan, each country will agree to accept a prescribed number of skilled persons from Japan as part of its overall commitment to the World Trade Organization. The decision to introduce a quota system for the selection of foreign manpower, however, has sparked a fierce debate in the country vietproud.com.vn. Some argue that by limiting the number of workers that a country can hire from other countries, Japan is simply reducing its dependence on other countries for its labour. Other experts argue that such moves by Japan may amount to an abuse of the labour agreement signed with the European Union.
In addition to the introduction of a quota system for the allocation of foreign workers, another strategy adopted by the Japanese Government is the establishment of several hundred agricultural zones throughout the country. These zones, designed to provide specialised farming facilities to specific industries, are designed to increase productivity and encourage exports. Although a major part of the agricultural industry is based on traditional farming methods and inputs, some argue that the widespread use of machinery in the agricultural sector can increase the efficiency of the market by bringing down the costs involved in agricultural inputs.
Many of the products that are produced in these agricultural zones are highly specialized, making them in high demand by international businesses. These include electronics, medical supplies, and chemical products. Although the growth of the country’s economy is lagging behind that of most developed economies, a strong Japanese economy is still seen as a potential threat to global economic stability, particularly as China continues to expand its global trade. As a result, in recent years the Japanese Government has made efforts to ensure that it receives maximum benefits from its export position. This has included the establishment of a series of preferential rates for imported goods, preferential tariffs on raw materials and other measures to increase the competitiveness of the Japanese labour market.
While the exact impact of these strategies on Japan’s domestic economy is not clear, one thing is clear: the growth of the Japanese economy depends very much on the amount of cheap labor it gets from other countries. A report prepared by the Organisation for Economic Co-corporation and Development (OECD), indicates that countries with the strongest labour markets also tend to enjoy robust economic growth. One important implication of this is that the Japanese government should continue to adopt policies that support employment growth in the country. Without such encouragement, Japan’s ability to attract investment capital may be limited, thus limiting the country’s ability to finance infrastructure investments required for sustaining its economic growth. While other countries have successfully used labour-intensive techniques to boost productivity and earn large profits from their industrial sector, employing a skilled and highly educated work force in Japan may prove to be an even more difficult proposition.