Impact of the Nuclear Crisis on Japan's Imports and Exports

By A. M. Newhall, BASC Research Assistant

In the wake of Japan negotiating multiple trade agreements with Australia and India in terms of imports and exports, one must wonder how deeply the ongoing nuclear crisis will hinder their standing in the global economic market. On March 29, 2011 Japan pleaded at a World Trade Organization conference for consumer markets not to ban their products, a plea that came on the heels of New Zealand and other states experiencing an export boost in Asian markets "as buyers shun Japanese products on concern they may be tainted with radiation."

Near the Fukushima Daiichi power plant in the northern region of Japan, radiation has been detected in the ocean water, in groundwater, in the soil, and on crops. This will directly affect the fishing and seaweed industries and undoubtedly hinder Japan's dairy exports. According to CNN, "radiation gets into the milk because it falls on grass eaten by cows." Consumer concerns have been dismissed by the U.S. Environmental Protection Agency, which asserts it is safe to drink milk with low quantities of radiation. However, given that Japan's domestic milk and other produce may now have a uranium flavor, the Japanese government may be more receptive to Australia's previous demands that Japan abolish its tariffs on its beef, wheat, sugar, and dairy products.

Furthermore, one wonders if the recent troubles and ongoing criticism centered on Japan's outdated nuclear reactors has likewise made India have second thoughts about their recent trade negotiations with Japan. A press release stated, "Japan and India launched negotiations in June on a pact that would allow Tokyo to export its cutting-edge nuclear technology to the energy-hungry South Asian nation, a hotly contested market for atomic plants." Whether Japan's "cutting-edge nuclear technology" will still be as fervently desired or favorably viewed remains to be seen.

Ultimately, the economic impact of this multi-pronged disaster will be one more burden for the Japanese people to bear in the years ahead. Obviously, this disaster may accelerate the removal of Japan's tariffs on imports at a much faster rate than previously forecast and perhaps alter the nation's views about free trade. Indeed, the disaster has resulted in the European Union proposing a free trade agreement with Japan that "would be the most significant trade deal signed by the EU with a single country." In short, the tragedy unfolding in Japan may greatly affect free trade in the Asia-Pacific region.

Indonesia Rising

by Michelle Chang

BASC Research Assistant

In December 2010, Foreign Policy magazine forecast ten trends in 2011 that will come to change the world in the coming decades. Among them is the rise of Indonesia.

As the world lavishes most of its attention on China and India, Indonesia doesn’t come across as a hot topic. It rarely crosses anyone’s mind that Indonesia is the fourth most populous nation in the world, a fact alone that marks countless opportunities and possibilities.

Indonesia has emerged almost unscratched from the recent economic crisis, as its financial sector was not closely integrated with that of the rest of the world. After a landslide victory for President Yudhoyono in 2009, Indonesia is now firm on the path to solve problems of endemic corruption and invest heavily in building new infrastructure all over the country.

It is also worth noting that Indonesia also has the largest Muslim population in the world. President Obama has already acknowledged Indonesia’s key importance in global security in the future. We do not yet know exactly how Indonesia’s future shall unfold, but we can be certain that its political and economic importance will continue to rise in the years to come. It is a future worth anticipating, and for that, we should all be keeping Indonesia on our radar.