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October 2009

Emeritus Professor Peter Drysdale recently presented in Sydney a preview of his now-published consultancy report for Austrade, which urges (p3):

“a paradigm shift in thinking about Australia’s relationship with the Japanese economy. The Japanese market is no longer confined to Japan itself. It is a huge international market generated by the activities of Japanese business and investors, especially via production networks in Asia. It is a market enhanced by the economic cooperation programs of the Japanese government throughout the developing world, particularly in the Asian and Pacific region. And it is a market in which Japanese business now plays an increasingly important role from an Australian base in manufacturing, agriculture and services.”

The Australian Financial Review now confirms that Japan has led China and other Asian investors into Australia over the last year (“What Crisis? Asian Investors rush to our shores”, 24 September 2009). But many probably remain unaware of these facts highlighted by Drysdale’s report (pp 3-4):

“The stock of Japanese investment in Asia amounted to A$ 180 billion out of Japan’s global investment of A$ 772 billion at end-2008. The flow of export and import trade which Japanese business generates in Asia each year was US$ 690 billion in 2008. Procurements through Japanese corporate subsidiaries in Asia amount to A$ 1.2 trillion annually. In addition, Japan spent A$ 11 billion (901 billion yen) in Asia on Overseas Development Assistance programs and procurement through economic cooperation programs. Japanese business has now also established a platform for export to the region from Australia, with diversified investments across food, manufacturing as well as resources, that already delivers A$ 6 billion in Australian sales to Asian markets other than Japan. These are all large new elements in the economic relationship with Japan beyond the A$ 51 billion export trade and A$ 20 billion import trade that Australia already does each year with Japan itself.”

These pervasive economic ties are underpinned by very wide-ranging and stable relations between Australia and Japan at all sorts of levels: governmental, judicial, educational, working holidays, and so on. As pointed out in another recent report “Australia and Japan: Beyond the Mainstream”, by Manuel Panagiotopolous and Andrew Cornell for the Australia Japan Foundation, the GFC has led policy-makers as well as businesspeople to look again more favourably on relationships that combine lower risk with less return, compared to high risk/return ventures.

We can take advantage of these strong and still very profitable Australia-Japan bilateral relationships, as well as the investment and trading links each country (especially Japan) has developed in other parts of Asia particularly since the 1990s, by more actively joining Australian and Japanese partners for ventures throughout Asia. This spreads the risks typically associated with the possibility of higher returns, and also allows each partner to contribute goods or services in which that country has more of a comparative advantage. Thus, for example, Drysdale suggests (p25):

“partnership with Australian services firms in finance, legal services and engineering could be mutual productive. … In FTA talks with Japan the Rudd Government is trying to open the way for professional and financial services firms to set up in Japan, encouraging wider recognition of qualifications and the removal of barriers to obtaining licences in Japan”.

As an example of “legal and consultancy services”, Drysdale mentions that several Australian law firms have long experience in the Asian region, and gives the example of Mallesons Japan. But he concludes that “if we are serious about joining global supply chains and capturing service industry opportunities in Asia then Australian firms need to be there on the ground to capture the business”.

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Following on from my previous report on Mr Akira Kawamura's talk in Sydney about the significant transformations impacting on the legal profession in Japan, East Asia and world-wide, let us briefly consider also some inter-related changes to legal education in our region. ANJeL Judges-in-Residence Program Convenor Stacey Steele is co-editing, with Kathryn Taylor, "Legal Education in East Asia: Globalisation, Change and Contexts" (forthcoming in December from Routledge: ISBN 978-0-415-49433-5) to commemorate the late Professor Mal Smith, who did so much for ANJeL, Australia-Japan relations, and legal education particularly in the Asia-Pacific region. ANJeL Co-director Kent Anderson and Competitions Program Convenor Trevor Ryan have contributed a very useful chapter on "Gatekeepers: A Comparative Critique of Admission to the Legal Profession and Japan’s New Law Schools", which they and Stacey have kindly shared with me in manuscript form.

Hopefully without stealing too much of their thunder, I would like to extend it to locate especially Australian legal education. Below are my opening remarks for a co-authored National Report on Topic I.D "The Role of Practice in Legal Education" for the 18th International Congress of Comparative Law, held four-yearly in different venues - this time from 25 July 2010 in Washington DC. Through the Sydney Centre for International Law, Professor Cheryl Saunders, Justice James Douglas and I have arranged for many other National Reporters on diverse topics selected for the Congress. We can also expect there many National Reports from Japan, although it remains to be seen whether anyone has volunteered one for the same Legal Education topic. There remains considerable uncertainty about Japan's new postgraduate "Law School" programs and their relationship to the National Legal Examination system, as I explained in a paper first presented a conference organised by Stacey in Melbourne where the "gatekeeper" framework was first unveiled.

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