Economics, Politics and Public Policy in East Asia and the Pacific
Author: Luke Nottage, University of Sydney
Australian Prime Minister Julia Gillard was one of the first among world leaders to visit Japan, over 20–23 April, after the nation was stricken on 3 March by the ‘earthquake-tsunami-radiation triple disaster’.
But the Australian government was tactful and realistic in not placing emphasis on progressing bilateral Free Trade Agreement (FTA) negotiations at that time. Read more…
Author: Luke Nottage, The University of Sydney
In its recent review of Bilateral and Regional Trade Agreements (BRTAs), the majority report from Australia’s Productivity Commission remained opposed to including treaty provisions for investor-state dispute settlement (ISDS).
Recommendation 4(c) advised that Australia should not include ISDS ‘provisions in BRTAs that grant foreign investors in Australia substantive or procedural rights greater than those enjoyed by Australian investors.’ Read more…
Author: Luke Nottage, University of Sydney
The over-sensationalising of Australia’s alleged ‘Secret Dealing on Whale Hunts’, in Australian media reports last week drawing on documents released by WikiLeaks, has been correctly criticised by Tim Stephens. Yet his contribution has engendered further public debate over whaling, including the case recently initiated by Australia against Japan (with New Zealand also intervening) before the International Court of Justice (ICJ).
The Japanese government appears confident about winning the case, basically because the Whaling Convention was set up to permit (sustainable) whaling. Read more…
Author: Luke Nottage, University of Sydney
The Productivity Commission (PC) last month released a Draft Report for its Review of Bilateral and Regional Trade Agreements to reconsider the Australian government’s policy in negotiating Free Trade Agreements (FTAs). The report acknowledges the inefficiencies of preferential agreements compared to multilateral approaches and pragmatically suggests various means to maximise benefits in the short-term.
Unfortunately, that ideal is unlikely to be achieved – risking perverse implications throughout the Asia-Pacific, where Australia has concentrated its FTA activity – if the PC’s Final Report includes all of the suggestions in its Draft Recommendation 5. Read more…
Author: Luke Nottage, University of Sydney
Privately-supplied alternative dispute resolution (ADR) services are increasing in Japan. This is partly explained by a shift in self-image among many bengoshi lawyers, linked to the increasing presence of corporate law firms. In 2004, the ‘Law to Promote the Use of Out-of-Court Dispute Resolution Procedures’ which followed a Judicial Reform Council (JRC) recommendation in 2001, was rapidly enacted.
Despite its slow start, this law has been successfully promoting privately-supplied ADR services. Read more…
Author: Luke Nottage, Australian Network for Japanese Law
Imagine a transnational regime with these institutional features:
Author: Luke Nottage
Mainstream Australian media provided distressingly meagre coverage of Japan’s exciting general election for the more powerful lower House of Representatives, which saw a remarkable about-face. The centrist Democratic Party of Japan (DPJ) went from 115 to 308 seats, with allies Social Democratic Party (SDP) (the small leftover of the once-powerful Japanese Socialist Party) and the New Party Nippon taking another 7 and 3 seats respectively. Overall, these and other former Opposition parties took 340 seats, whereas the conservative ruling coalition suffered a massive defeat. The Liberal Democratic Party (LDP) dropped to 119 seats, from 300 before the election (and 296 in 2005, the previous election called by Junichiro Kozumi who then retired as Prime Minister). The Komeito dropped from 31 to 21 seats, meaning that the former ruling coalition now only has 140 seats. In short, the tables have turned almost completely since 2005, in a country famous for its aversion to abrupt political changes.
This piece is a reflection on this result and the potential implications it has for policy and law reform in Japan.
Author: Luke Nottage
The Prime Minister, Kevin Rudd, has just contributed a long essay with this title to the Sydney Morning Herald (25-6 July 2009). Here are some extracts that should be connected to ongoing initiatives and discussions about consumer credit and consumer law more generally:
1. Rudd’s grand plan now for the forthcoming ‘building decade’:
‘It will take time to build the foundations of Australia’s long-term global competitiveness. But we must take time to do it thoroughly. We must take time to invest in the infrastructure of the future, the skills of the future, the competitive tax system we need for the future, an ambitious agenda for competition and regulatory reform, and to maintain the best national balance sheet of major advanced economies.’
Author: Luke Nottage
Peter Drysdale’s weekly editorial, along with related postings to this blog and enormous media attention in Australia and elsewhere, focuses ‘on the continuing detention of Rio Tinto executive, Stern Hu, in Shanghai on allegations of espionage’. Drysdale signposts some future analysis of ‘the legal framework under which Hu’s detention has taken place’. He also emphasises that we need ‘a cooperative framework—bilaterally, regionally and globally’ for ‘China’s authorities to avoid damage to the reliability of markets and for Australia to avoid the perception of investment protectionism’.
The most pressing legal (and diplomatic) issues concern China’s criminal justice system, especially when ‘national security’ is allegedly involved. But we need to consider some broader ramifications, including investment treaty protections. Part of the backdrop to the Hu saga could be that nations retain considerable sovereignty when it comes to deciding on the operational ambit of foreign investments. Investment treaties – which may be bilateral or regional, stand-alone or folded into broader Free Trade Agreements – now often entrench substantive liberalisation. But these treaties maintain exceptions for national security or subject investments to national interest tests. So even if Australia and China conclude their current FTA negotiations making it broadly easier for firms from either country to invest in the other, that sort of exception could be invoked by Australia, for example, to block or restrict an investment like the now scuttled proposal by Minmetals to acquire Oz Minerals back in March 2009.
Author: Luke Nottage
Dr Malcolm Cook and Mr Andrew Shearer at the Lowy Institute in Sydney published last month a short analysis entitled Going Global: A New Australia-Japan Agenda for Multilateral Cooperation:
To help both governments navigate [a] more complicated and uncertain international environment, the paper offers a agenda for enhanced Australia-Japan multilateral cooperation organised around:
- support for American global leadership, and
- reforming post-war multilateralism.Three areas of international policy are particularly well suited to closer Australia-Japan cooperation in pursuit of these goals: climate change and energy security; nuclear non-proliferation; and official development assistance.
I have doubts about these two foundational principles, especially over the mid- to long-term, given America’s own longstanding ambivalence about multilateralism, and its relative decline particularly since the GFC.
Author: Luke Nottage
On 21 November 2008, the Attorney-General’s Department (AGD) announced a Review of Australia’s International Arbitration Act 1974 (IAA). The aim was to consider whether the Act should be amended to:
-ensure it provides a comprehensive and clear framework governing international arbitration in Australia;
-improve the effectiveness and efficiency of the arbitral process while respecting the fundamental consensual basis of arbitration, and;
-consider whether to adopt ‘best-practice’ developments in national arbitral law from overseas.
The AGD’s Discussion Paper (DP) expressed the hope that a revised IAA would make Australia a more attractive venue for conducting international commercial arbitration (ICA), especially within the Asia-Pacific region. Unfortunately, Australia has missed that boat, with China, Hong Kong and Singapore the clear leaders now in this part of the world.
Author: Luke Nottage
The former Chair of the Australia Competition and Consumer Commission, Professor Allan Fels, co-authored a column for the Weekend Business section of the Sydney Morning Herald entitled ‘Rudd’s Consumer Activism Over the Top’ (21-2 March 2009, p 5) . Their title is misleading, although they raise some good points in response to Treasury officials’ latest Consultation Paper, ‘An Australian Consumer Law: Fair Markets, Confident Consumers’. On its own terms – let alone compared to developments over recent years in the EU, Japan, and soon Canada – the Paper and the Australian Governments’ current proposals remain a disappointment for Australian consumers.
Yet now should be a perfect opportunity, however belatedly, to implement a better consumer regulatory framework and thereby revive consumer trust. After all, partly through cash handouts to consumers, Australia is trying to spend its way out of a huge recession, itself caused (or at least exacerbated) by regulatory failures and increasingly blind faith in improperly regulated markets. Read more…
Author: Luke Nottage
This year, Australia Day (26th January) fell on Chinese Lunar New Year, so there were a few more events celebrating Chinese traditions as well as the ever more frequent display of Australian flags around Sydney. But the day after, the Sydney Morning Herald ran a front-page story entitled ‘Revealed: secret whale deal‘. It highlighted the Federal Government’s involvement in generating a proposal whereby:
- Japanese whalers could hunt a regulated number of minke whales in its coastal waters, and take many more whales in the North Pacific, under the plan.
- Japan would agree to one of two offers in exchange: either to phase out scientific whaling in the Antarctic entirely, or to impose an annual Southern Ocean limit.
- The proposal was hammered out in secret by an International Whaling Commission drafting group of six nations, which includes Australia and Japan, at a meeting in Britain last month.
With the whaling season already underway, however, Australia’s Environment Minister insists that this is still under negotiation and that the Government remains opposed to any commercial whaling. But one NGO – the International Fund for Animal Welfare – calls this ‘Whalergate’, criticising the opaque nature of the IWC. Read more…
Author: Luke Nottage
(with thanks to Ichiro Araki)
Japan appeared to have recovered from its own financial crisis a decade ago, albeit at the cost of much accumulated government debt. The country was then hit by the collapse of its export markets and the rapid rise of the yen, following the imminent global recession.
Professor Iwao Nakatani, former Chairman of Sony, has urged a radical shift in economic policy in Japan and elsewhere from policy ‘based on neo-conservative economics and the philosophy of small government to one based on Keynesianism and welfare state ideology’.
Some may be sceptical as to whether Japan ever really embraced the former philosophy, and its ascendancy was certainly never as pronounced as in the US, the UK or then Australia.
But deregulation of alcohol distribution is one of Japan’s many transformations over the last decade. It is also the flipside of ever-stricter rules on drink driving, although these rules also reflect a broader trend towards criminalisation of socio-economic deviance, evident in product safety or consumer credit re-regulation.
On the other hand, deregulation is most notable in terms of where you can buy alcohol to celebrate this New Year of the Ox: namely, vending machines and those ubiquitous convenience stores. It is less obvious in what you pay, especially for certain beer substitutes, which reflect differential tax rates.
In fact, these tax rates may well violate WTO law. Yet there is probably not enough financial reward for potential beer exporters to Japan to encourage their home governments to sue Japan. So an implication for FTA negotiators , even those from Australia, may be to seek some offset advantage in their overall bilateral deal with Japan, which would further undermine the entire multilateral WTO framework. Read more…
Author: Luke Nottage
If you are one of those many more short-term visitors to Japan nowadays, and even if you are an old hand, watch out for signs setting out various rules that may be unexpected or new. Like these two signs:
The bigger one to the bottom left is one of many signs we see increasingly around Japan in English (and sometimes now Chinese or Korean). The text is small but reads: “In the Beautification Enforcement Areas you will be fined up to 30,000 yen for littering regardless of your nationality or status”. The kind of prohibition and penalty you might expect in Singapore. Not in Japan, where local communities have long taken pride in being tidy – although that has not excluded individuals or dodgy firms from dumping their rubbish in distant communities! But what is meant by the round blue sign up on the right? Read more…