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Tuesday, September 29th, 2020

Politics › Japan eyes putting TPP into force without U.S.

by April 15, 2017 General


Japan plans to push forward talks to put a Pacific rim trade pact into force without the United States, which withdrew from the multination agreement in January as President Donald Trump pursues bilateral trade deals, a government source said Saturday.

With the China-excluding Trans-Pacific Partnership pact, signed last year to achieve high-level trade liberalization, adrift after the U.S. withdrawal, Japan has become eager to take the lead in making the mega trade deal take effect among the remaining 11 countries, the source said.

The 11 nations are expected to start discussing the issue at a meeting of their chief negotiators in Canada in early May, and at a meeting of their trade ministers in Vietnam late next month on the sidelines of an Asia-Pacific Economic Cooperation gathering.

Tokyo had expressed reluctance to have the TPP come into force without Washington amid concern a TPP is unlikely to provide a tailwind for Japanese exporters, such as automakers, without the United States, the biggest market in the grouping.

But with free trade perceived to be under threat with the rise of protectionism since the launch of the Trump administration, calls have been growing in the government for Tokyo’s leadership in keeping the momentum for free trade.

On Saturday, Japanese Chief Cabinet Secretary Yoshihide Suga indicated Tokyo’s readiness to proceed with the TPP implementation while ensuring U.S. understanding, saying in an interview with Kyodo News, “We have a feeling that the 11-nation framework should be given weight.”

As the outlook for the TPP is uncertain, Japan, which is aiming to expand free trade for growth in its export-oriented economy, has also promoted talks on the 16-member Regional Comprehensive Economic Partnership, which is led by China and does not include the United States.

Analysts, however, have voiced concern that high-level trade rules may not be established under RCEP because Beijing, the largest economy in the grouping, may seek to impose its rules on the Asia-Pacific region.

The TPP was signed in February 2016 by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam—covering around 40 percent of the global economy.

Under the current rules, the TPP’s implementation requires ratification by nations accounting for 85 percent of the combined GDP of the 12 member countries. The deal was therefore effectively dead in the wake of the withdrawal of the United States because the country represents over 60 percent of the trade bloc’s GDP.

But the administration of Trump, who took office in January pledging to pull the United States out of what he calls a “job-killing” free trade pact, has not opposed the remaining 11 nations implementing the TPP.

One idea being considered to lower the threshold for the TPP’s coming into force envisions a separate protocol to allow the TPP to be applied to any remaining member that agrees to it, the source said.

Prime Minister Shinzo Abe’s government plans to finalize its position on the TPP after considering the outcome of a high-level Japan-U.S. economic dialogue to be held in Tokyo on Tuesday, the source said.

The high-level talks will be led by Japanese Deputy Prime Minister and Finance Minister Taro Aso and U.S. Vice President Mike Pence. They are set to discuss infrastructure investment, trade rules and macroeconomic policy.