Lull in TPP Negotiations

Now Is the Time To Share Our Opinions with the Government

An assembly among the heads of negotiations for the Trans-Pacific Partnership, which consists of 12 countries, including Japan and America, was held in Beijing, China. Though Japan and America concentrated on the negotiations, they were unable to reach a conclusion, and as a result failed to reach their year-end goal of creating an outline they could mutually agree on. The assembly ended without any statement made on when they would next discuss the matter.

For Japan, not rushing negotiations here was a mistake. In our prefecture, which concentrates on agriculture and strongly opposes the TPP, the atmosphere is currently peaceful. However, political conditions are changing in America. The Americans may adopt a stricter attitude than before toward the tariffs Japan wants to keep on its five key agricultural sectors, which include beef and pork. We should be more on guard.

Beware of America’s Strict Stance

America holds the key to the negotiations. In its last midterm election, the Republican Party won a complete victory and now controls both the Senate and the House of Representatives. It opposes the Democratic President Obama on several major policies; even in the realm of commerce, it is possible attitudes toward negotiating may change entirely. The first thing we can expect is for the Republican Party to control the expansion of free trade and move for the president to adopt greater authority on commerce negotiations. I’d like to see this change through first.

If they can achieve this authority, then the Obama administration may take steps to propel negotiations. This would be a plus, but there is a possible minus that Japan needs to be aware of: The chance of the Republican Party accepting drastic concessions from other participating countries is high.

In contrast to the labor unions and environmental organizations that support the Democratic Party, the Republican Party is much closer to meatpacking companies. It appears they may be influenced by their support base and take a stricter stance on the five agricultural sectors. It would be best if we prepared for the TPP conference with America to fall into a temporary retreat or standstill.

In addition, we may also face a new problem that has never surfaced in TPP negotiations before: exchange rates. Within Congress, the dissatisfaction over the low yen compared to the dollar has been sputtering. However, while America ended quantitative easing in October, the Bank of Japan plunged into additional large-scale relief. Because of this, the gap between the yen and the dollar will increase at an even faster rate. Ever since the influence of automobiles and such on American export industries started to show, the opinion that “we should include restrictions in the TPP on managing exchange rates” has been crossing factions and spreading in the mind of Japan. I want us to be careful of adding more coals to the fire.

Can We Expect More Exports?

For Japan, in these two years of trying to raise the value of the yen, it may seem like exports have substantially increased given the lowered tariffs the TPP has brought. The truth is, however, that exports have not actually increased in volume, presumably due to changes in industrial structure such as expansion of local production. It’s possible that even if the TPP is implemented, we may not see the increase we initially hypothesized.

If that’s the case, then we mustn’t allow any concede any advantage we have now, no matter how small it is. Advancing only the exports of agricultural products without being able to estimate automobile exports does not benefit Japan.

Last March, when Prime Minister Abe announced his participation in TPP negotiations, we thought of defending food safety and agricultural grounds, and reviewed the various merits agriculture had. Now, with the conference at a standstill, I’d like for us to share our many opinions with the government.