TPP Negotiations: Concessions Jeopardize Regional Revitalization

Twelve nations have been participating in negotiations for the Trans-Pacific Partnership (TPP), and Prime Minister Shinzo Abe wants an early stage agreement.

While the weakened yen and other harmful effects and limitations have been pointed out regarding monetary easing and fiscal stimulus, the first and second arrows of “Abenomics” — the key to achieving a positive economic growth cycle, which would muster corporate and private vitality, is the third arrow, the growth strategy, and this is because of the powerful pillar that is TPP.

The aim of this agreement is to remove obstacles to the movement of people, things and money across international borders. In Japan, it would be the abolition or easing of the barriers to the free comings and goings of these things. In other words, it is connected to regulation reform.

TPP is essential to creating the business environment that the growth strategy aims for, making Japan the world’s easiest country for business activity, including foreign capital. The agreement is no doubt one of the accomplishments the prime minister yearns for.

There is a concern that the prime minister, who further solidified the government foundation, is leaning forward more than ever toward a settlement.

Negotiations will prove a challenge. The United States and Southeast Asian nations have been unable to agree on intellectual property rights and reform of state-run enterprises in numerous areas of negotiation. Japan and the U.S. have been unable to agree on a range of tariffs, at the core of which are the “sacred five” agricultural products including rice, beef and pork.

Many countries are keeping a close eye on Japan and the U.S., which account for 80 percent of the entire economic scope of the participating countries, as the progress of the overall negotiations is influenced by their discussions.

However, the political climate of the United States is closely connected to the outcome of those very negotiations.

One of the focal points for many Republicans in the House and Senate is whether or not they can entrust negotiating authority from Congress — which has overcome conflict with respect to trade — to President Obama, who is considered ambitious regarding the negotiation settlement.

Moreover, the summer ahead of next year’s presidential election has become the deadline for an agreement outline, in order for the agreement to take hold.

If this opportunity is passed by, the very negotiations themselves are likely to drift.

Japan must not give in and compromise with the United States, which fears drifting and rushes too much toward “results” as it continues to push for the market opening of agricultural products. Above all, it is essential to carefully assess the attitude of the U.S. administration.

Rural regions showed opposition and caution during negotiations. This is because of a strong sense of crisis that accelerating trade liberalization will cause more of an influx of cheap agricultural imports, which could in turn not only deal a blow to agriculture but also lead to the collapse of rural areas.

The Abe administration is currently waving the flag of “regional revitalization.” It is meant to create jobs in rural areas for 300,000 young people within five years. The basis for that rests on the transformation of agriculture into both the sixth industry and a growth industry.

The administration will say that TPP would not only improve the business environment but also become an engine for regional revitalization.

However, if we compromise and open the major agricultural produce market to the United States, it is not hard to imagine that even if there is a grace period before liberalization, regional agricultural leaders could lose their future outlook and spirit, and that sense of loss could in turn spread throughout the entire region. There is a risk that the revitalization from regional independence and self-reliance described by the administration could be jeopardized from the ground up.

The prime minister should also bear in mind that defending the “sacred five” at all costs is the minimum condition for regional revitalization.

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1 Comment

  1. Japan and the U.S. are great trading nations and the TTP will strengthen them both economically . In addition Japan needs to draw closer to the other Asian democracies and American allies to improve their relations with them in the face of China’s pressure and territorial claims.

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