Back to Square One with TPP: No Need To Rush a Settlement

Before President Obama's departure from Japan yesterday, the two countries issued a joint statement. They'd failed to reach an agreement on the terms of Trans-Pacific Partnership negotiations. Even though they stated that they'd “identified a path forward,” it's obvious we're back to square one.

For the U.S., TPP is essential. The aim of establishing this new free trade zone is to check China's growth. As far as Japan is concerned, however, we have means of expanding free trade even if we don't participate in TPP. So, with confidence that the U.S. is in decline, how long do we need to continue seeing TPP negotiations as part of a “set” with the Japan-U.S. Security Treaty?

The day before yesterday, at a press conference following his talks with Japanese leaders, Obama stated, “The policy of the United States is clear — the Senkaku Islands are administered by Japan and therefore fall within the scope of Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security.” Such a statement is believed to have “saved face” for Japanese Prime Minister Shinzo Abe, but from now on the U.S. will almost certainly be using this show of support as leverage to press Japan for concessions in TPP negotiations.

At the moment, the Obama administration is preparing for Congressional interim elections. Due to employment being a major issue, Obama hopes to trigger job growth by opening the overseas market, which includes Japan. As a result, the room for making concessions to Japan is small.

Furthermore, U.S. Congress has not given the president fast track authority over trade negotiations. It's predicted that, before any ratifications can be made to trade agreements, corporate interests will put pressure on Congress, who will in turn put pressure on the president. At a press conference following yesterday's cabinet meeting, Finance Minister Taro Aso also mentioned this point, stating, “Obama does not have the domestic power to pull it together.”
Negotiations are currently stalled. Japan is treating five agricultural products as “sacred,” and the U.S. has not eliminated its tariff on Japanese automobiles. It doesn't seem likely that these gaps will be easily filled.

Among Japan's five “sacred” agricultural products, the treatment of pork is a particularly large gap. In the 1970s, Japan introduced a “gate price system” in which imported pork that has a lower price than domestic pork is subject to higher tariffs. This system was used to curb imports. More so than the beef industry, the Japanese pork industry is worried about the large impact of opening up the market. The U.S. is demanding a tariff reduction on pork products, but Japan can't be expected to make an easy compromise on this matter.

The U.S. is also urging Japan to relax its automobile safety standards. Although they seem to be viewing it as simply a matter of not being able to sell American cars in the Japanese market, Japan cannot flippantly concede an element of a system designed to protect the lives of many people.

The government officials accompanying Obama on his Asia tour said yesterday in Seoul that the U.S. and Japan have reached a “key milestone” concerning these five “sacred” products. They noted that they've continued to make progress: going through the list of commodities one by one, specifying whether or not the countries will eliminate tariffs and setting a time frame for elimination.

Yet, in what way have negotiations progressed? Japanese citizens have no idea whatsoever. Akira Amari, the minister in charge of TPP negotiations, stated to the press, “If I were offered the same portfolio again, I would not want to do it.” Even while expressing the difficulties of TPP negotiations, however, he did not disclose any of the contents of those negotiations.

TPP negotiations don't need a quick settlement. There's also a view that it won't be too late to reach a settlement even after taking a “cooling off” period and seeing the results of the U.S. Congressional midterm elections. Surely we'll be able to calmly assess even Japan's agricultural measures.

Still, when the chief negotiators meet in Vietnam this May, they should insist on the things that should be insisted on. Additionally, I want them to guarantee a national discussion and disclose information about the negotiations.

Yesterday, five political parties, including the Democratic Party, introduced a bill to the House of Representatives concerning trade negotiations like TPP. If passed, the bill will require the administration to make periodic disclosures to Congress about the state of negotiations. However, these would still be closed sessions. Any information that's discussed in Congress should also be made available to the public.