Japanese Prime Minister Shinzo Abe on Friday formally expressed interest in joining the Trans-Pacific Partnership negotiations. The 16th round of talks with the 11 TPP nations concluded Thursday in Singapore.
The addition of Japan means that the treaty will encompass some two thirds of the global economy, but it also is expected to slow any agreement because Japan has certain concerns that must be addressed. Admittance is pending, waiting for approval by the other countries engaged in the negotiation. Their approval is likely only if they determine that Japan can maintain the momentum of negotiations.
There is opposition in Japan itself, notably from the farm lobby, which claims trade liberalization would harm Japan’s farms. Prime Minister Abe seeks to overcome that. Speaking on Japanese TV, he said, “If Japan alone continues to look inward, we will have no hope for growth. This is our last chance. If we don’t seize it, Japan will be left out.”In a press conference, he characterized the Pacific Ocean, after the TPP, as “an inland sea and a huge economic zone.”
He declined to answer whether Japan would withdraw from the discussions if it fails to persuade the other TPP members to allow existing tariffs on rice, pork, beef, wheat, dairy products and sugar to continue, as demanded earlier by Abe’s own Liberal Democratic Party.
Acting U.S. Trade Representative Demetrios Marantis welcomes the announcement saying,“Since early last year, the United States has been engaged with Japan in bilateral TPP consultations on issues of concern with respect to the automotive and insurance sectors and other non-tariff measures, and also conducting work regarding meeting TPP’s high standards.
Japan is concerned about maintaining its protections for rice, pork, beef, wheat, dairy products and sugar. In response, the United States is signaling that at least some of those products would be exempt from the negotiations. Typically, Japanese tariffs on agricultural goods average 25 percent, while manufacturer goods average 6.5 percent. Rice has a 778 percent tariff. Agricultural concessions, if they materialize, are expected to come at the expense of Japan’s manufacturing base. The TPP also seeks to eliminate trade barriers in fields that are closed to foreign competition, such as health, automotive and retail products. The Japanese government estimates indicate joining the TPP could expand Japan’s economy approximately 0.66 percent – or $33 billion.
Scott Paul, president of the Alliance for American Manufacturing remains cautious about including Japan. Writing in a CNBC op-ed piece on Saturday, says, “We should welcome and encourage Japan's interest in freer trade. But let's not roll out the red carpet for TPP's arrival just yet. Japan’s closed market, currency manipulation, and many other concerns stand in the way... And I highly doubt that Congress will look favorably upon a TPP proposal that doesn’t stop currency manipulation and guarantee reciprocity for American workers and businesses. We’ll work to make sure of that.”
Clearly, Representative Marantis adds, “While we continue to make progress in these consultations, important work remains to be done. We look forward to continuing these consultations with Japan as the 11 TPP countries consider Japan’s candidacy for this vital initiative in the Asia-Pacific region. We will continue to consult with Congress and stakeholders as we proceed."