Japan in Depth / Trump statement casts pall over TPP prospects

Pool photo/ The Yomiuri Shimbun

Leaders of TPP member countries participate in the summit meeting held on Saturday in Lima.

The Yomiuri Shimbun The fate of the Trans-Pacific Partnership free trade agreement has become more uncertain after U.S. President-elect Donald Trump announced that he would announce his intention to withdraw from the agreement on his first day in the White House.

In his video message to U.S. citizens that was made public on Monday, Trump revealed a list of six executive actions that his administration would immediately take after he assumes the post on Jan. 20. The withdrawal from the agreement was placed first on the list. It was Trump’s first mention of the TPP since his victory in the U.S. presidential election. U.S. ratification is indispensable for the deal to take effect.

Trump said in the message that his administration will “reform Washington and rebuild our middle class ... as we work together to make America great again for everyone.”  

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  • The Yomiuri Shimbun

  • The Yomiuri Shimbun

Trump apparently tried to demonstrate that he is capable of implementing policy while keeping his election pledges because he will be able to announce the withdrawal with his executive power.

Concern over employment

It is widely believed that free trade promotes the efficient production of goods and services that improve people’s lives. However, since the 2000s, when China joined the World Trade Organization, an increasing number of people in the United States have come to think that free trade has had a harmful influence. This is because they believe that the influx of cheap imported goods from China has severely damaged U.S. manufacturers and negatively affected employment and wage levels.

The procedures for withdrawal are not specified in the TPP agreement since the emergence of a country that wants to withdraw from the deal before it goes into force was not anticipated. Thus, Trump’s announcement does not necessarily mean the collapse of the deal.

Meanwhile, Trump’s announcement has spread disappointment within the Japanese government.

Prime Minister Shinzo Abe said, “The TPP is meaningless without the United States,” at a press conference held in Buenos Aires on Monday evening. It seemed like Trump was attempting to move away from Abe because Trump’s video message was apparently made public shortly after Abe’s press conference.

According to a source close to the Prime Minister’s Office, after the U.S. presidential election some in the government believed that because Trump is a businessman, he would make a practical decision after being told that the TPP deal would also benefit the United States. The government initially planned to take time to encourage Trump to change his previous decision while advancing the TPP’s ratification procedures.

This plan is close to failure with Trump’s announcement. Yet the government has positioned the TPP as a core of its growth strategy. A source close to Abe said, “It’s not that easy to give it up.”

The government has estimated that Japan’s gross domestic product would increase by ¥13.6 trillion and 795,000 jobs would be created by the implementation of the TPP. The government believes that expansion of trade will enhance the productivity of domestic industries, creating a positive cycle for the economy that includes wage increases and boosted consumption.

All these expectations will be reversed if implementation of the TPP becomes unlikely with the withdrawal of the United States. For this reason, the government has maintained its position of strongly pushing for the implementation of the TPP. A senior government official said that for the time being, the government will continue to encourage Trump to change his decision by promoting a free trade framework between Japan and Europe and other countries, and by completing the ratification procedures of all TPP members except the United States.

Trump’s announcement was made soon after his meeting with Abe on Thursday in New York, revealing once again how difficult it would be to ensure Trump’s policy reflects Japanese intentions.

After their meeting, Abe praised Trump and implied that he would be able to build a relationship of trust with Trump to a certain extent. Abe said, “President-elect Trump is a leader who can be trusted.”

During his presidential campaign, Trump made various comments regarding his security policy such as demanding Japan pay more to host U.S. forces. A senior official of the Foreign Ministry said that the direction of his security policy “has become even more uncertain.”Speech

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