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FOCUS: Abe's pursuit of 11-party TPP likely to benefit Japan

HANOI, May 21 Kyodo

Prime Minister Shinzo Abe's renewed pursuit of the Trans-Pacific
Partnership pact may eventually benefit Japan as the likely
accompanying trade expansion will provide a boost to Japan's economic
growth.
At their meeting in Hanoi on Sunday, ministers from the 11 TPP
countries agreed to complete preparatory work by November to put the
free trade deal quickly into force, moving a step closer to
implementing the pact.
While it remains to be seen whether they can realize an 11-party
TPP, analysts say Abe should continue to patiently negotiate toward
the enactment of the multilateral agreement.
Unless the TPP becomes effective in the absence of the world's
biggest economy, "high-level" rules on trade agreed upon under the
originally 12-nation deal would be dead, possibly allowing China to
take the lead in setting the economic tone in the region.
Should the Japan-led 11-party trade pact stimulate business
activity and enhance investment in the region, the United States
could be motivated to return to the TPP in an attempt to capitalize
on the burgeoning economic growth.
Echoing such views, Japan's TPP minister Nobuteru Ishihara has
said the enactment of the free trade deal is "strategically and
economically" important, whether or not Washington joins.
Covering around 40 percent of the global economy, the TPP was
signed in February 2016 by 12 countries: Australia, Brunei, Canada,
Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the
United States and Vietnam.
U.S. President Donald Trump, however, killed the pact
immediately after he took office in January. The president, who has
pursued an "America First" policy, pledged during the presidential
election campaign to pull Washington out of what he called the
"job-killing" TPP.
The withdrawal of the United States means the deal would be dead
under the current rules given the scale of the country's economy.
Japan had been previously unwilling to have the TPP come into
force without Washington's involvement, but it has recently decided
to make efforts to realize it amid lingering fears about China's
regional economic assertiveness.
Earlier this month, China hosted a two-day "One Belt, One Road,"
international forum, a program under which Beijing is trying to
further entrench its economic influence in Europe and Africa. Beijing
is not a signatory to the TPP.
"If Japan does nothing, China will grab a leading role in
setting free trade rules, in turn putting Japan at a disadvantageous
position in the trade field in the region," Political commentator
Norio Toyoshima said.
"Japan should not stop seeking overseas market development for
economic growth," Toyoshima said.
Tsuyoshi Kawase, a law professor at Sophia University in Tokyo
said, "The TPP was initially designed to counter the economic order
in the Asia Pacific dominated by China."
Even excluding the United States, the implementation of the
"U.S.-friendly" and "free-market-oriented framework" would be
"beneficial" to Japan, Kawase said.
On Sunday, the 11 TPP ministers said in a statement that they
"underlined their vision for the TPP to expand to include other
economies that can accept the high standards of the TPP."
Tatsuhiko Yoshizaki, chief economist at the Sojitz Research
Institute, said, "Fortunately, more trade and investment are required
for economic growth in Asia, where the antiglobalization movement has
not spread."
"If the 11-member TPP functions well, the number of countries
that are interested in participating in the pact may increase in the
future," Yoshizaki added.
A TPP of increased value could "attract the United States back"
to the free trade deal, said Junichi Sugawara, a trade policy expert
at Mizuho Research Institute.
Still, Japan would face difficulties in striking a deal as TPP
nations have been divided over whether to proceed with talks with
Washington on the sidelines.
Australia and New Zealand have aligned with Japan, but Vietnam
and Malaysia have indicated they disagree with Tokyo's proposal as
they want to boost exports to the United States to expand their
economies.
Mexico and Canada are believed to be reluctant to irritate Trump
by joining the 11-party TPP, as they have been urged by Washington to
renegotiate the trilateral North American Free Trade Agreement, or
NAFTA.
"The Japanese government is aiming to establish the TPP 11 and
eventually persuade the United States to return to the TPP," said
Naohiko Baba, chief economist at Goldman Sachs Japan Co. "Getting the
TPP 11 off the ground will be no easy matter, though."
"There is a risk that the remaining signatories will be unable
to reach consensus," he added.
Moreover, Robert Lighthizer, the new U.S. Trade Representative,
completely ruled out the possibility of Washington reentering the TPP.
"The United States pulled out of the TPP and it's not going to
change that decision," Lighthizer told a press conference Sunday.
"Bilateral negotiations are better for the United States than
multilateral negotiations," he said.



Nobuteru Ishihara (C), Japan's minister in charge of Trans-
Pacific Partnership free trade negotiations, enters the host venue
for the meetings between ministers from 11 TPP countries in Hanoi,
Vietnam, on May 21, 2017. The ministers agreed to complete
preparatory work by November to put the free trade pact quickly
into force, taking a step closer to implementing the deal without
the United States.