The Yomiuri ShimbunThe Japanese government will make a major change of direction as it seeks the implementation of the Trans-Pacific Partnership free trade agreement, which was on the verge of crisis.
The government has decided on a plan that aims to bring the TPP into effect with 11 countries, and without the United States. It expects to announce Japan’s line of thinking when ministers involved in TPP talks meet in Vietnam in May.
Twelve nations from Asia and around the Pacific signed the TPP in February 2016, but the U.S. withdrawal meant conditions for the pact to come into effect could not be met, running the TPP aground.
Japan continued attempts to persuade the United States to return to the fold, but after deciding a swift comeback would be difficult, it changed to a plan of seeking a new framework.
It is important that Japan shows leadership to expand the free trade zone and bring the administration of U.S. President Donald Trump, which has proclaimed protectionist policies, back to a multilateral trade order.
The United States is making clear its approach that gives priority to bilateral negotiations, in which it is easier to apply pressure on the other side, instead of multilateral discussions. Japan’s decision to push ahead with a TPP minus the United States is significant in attempting to forestall that intention.
After going through complex negotiations to coordinate the interests of member nations, the TPP was constructed to maximize the benefits each participant nation could receive. During a speech in New York, Deputy Prime Minister Taro Aso was quite right to say the advantages Japan could gain through bilateral trade negotiations with the United States “wouldn’t be at the TPP’s level.”
Craft thorough strategy
Pushing ahead with a TPP without the United States is supported by Australia and New Zealand, which expect to boost their exports of agricultural products to Japan and other nations. However, Vietnam and Malaysia, whose main focus was on exports to the United States, are more reluctant.
Given that the conditions for effectuation of the accord will change, it is possible the opinions of participating nations could differ on whether individual issues need to be renegotiated even if all 11 nations had already agreed on them. Utmost effort will be needed to maintain these high-level trade and investment rules.
Japan has completed ratification procedures for the current TPP deal. It will also need to get Diet approval again for any new accord.
The government should carefully explain to the public, including business circles and people in the farming and fishing industries, exactly what the future shape of the TPP will be.
The government’s trade policy rests on four main pillars: a TPP without the United States; the Regional Comprehensive Economic Partnership; the Japan-U.S. economic dialogue; and an economic partnership agreement with the European Union.
We can understand the government’s aim of deepening free trade in an area of the Asia-Pacific stretching from the United States to Europe and trying to quash the rise of protectionism in the region.
The RCEP is China-led and will tend to loosen various regulations. The fluid political situation in Europe means achieving the objective of reaching a broad agreement on a Japan-EU EPA by the end of this year remains doubtful. The government must craft a comprehensive trade strategy.
During the Japan-U.S. economic dialogue, it is important to continue leaning on the United States to nudge it toward joining the new TPP.
(From The Yomiuri Shimbun,