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Bandwagon to be bumpy ride

by Mai Iida

Kyodo

Prime Minister Yoshihiko Noda’s announcement that Japan will join multilateral talks on the Trans-Pacific Partnership free-trade framework was welcomed by leaders of countries already involved in the negotiations when they gathered over the weekend for their regional economic summit in Hawaii.

But while Noda may have felt his efforts to reach the controversial decision paid off to some extent, it is unclear how involved Japan can get in the rule-making process for the U.S.-backed framework given the nine countries so far involved in the talks have already reached a broad outline. Strong opposition at home also makes prospects unclear.

Despite a series of campaigns against the TPP and opposition even from some of his own lawmakers, Noda said Friday that Japan will begin consultations with related countries as a step toward joining negotiations on the pact.

After making the announcement, he flew to Hawaii to attend the 21-member Asia-Pacific Economic Cooperation summit over the weekend, where he announced Japan’s decision to Pacific Rim leaders.

He also conveyed the decision in person to U.S. President Barack Obama and Peruvian President Ollanta Humala on the sidelines of the APEC meeting.

Noda said at a news conference after the APEC summit that several economies had welcomed Japan’s participation. Indeed, Obama said separately he was “pleased” with Japan’s decision as well as similar commitments by Canada and Mexico to join the talks.

The Peruvian leader, meanwhile, gave his support for Japan’s bid to join the TPP talks in his bilateral meeting with Noda.

But the reaction was not simply welcoming.

U.S. Trade Representative Ron Kirk, responsible for Washington’s participation, said that “Japan must be prepared to meet the TPP’s high standards for liberalizing trade.”

The criteria include addressing specific issues of concern to the United States regarding barriers to agriculture, services and manufacturing trade, he said.

The TPP, originally an agreement between Brunei, Chile, New Zealand and Singapore, is among the various undertakings in the region to achieve economic integration.

Negotiations to expand the agreement have been under way with five countries, including major agricultural exporters the United States and Australia, as well as Malaysia, Peru and Vietnam.

Leaders from the nine countries agreed Saturday on a broad outline of TPP principles ahead of an eventual final deal, which Obama aims to reach “in the coming year.”

Critics say the scope for Japan to get involved in the TPP rule-making process to protect its national interests is limited because it has only just announced its participation, meaning there is a possibility it will have to wait six months or so before it can actually join the talks.

Participation by Japan or any other new country needs to be approved by the nine nations already involved in the TPP talks. In addition, the U.S. government will have to win the endorsement of Congress through a 90-day process that will follow a few months of preparations, Japanese officials said.

The TPP negotiations are intended to yield a free-trade zone stretching across much of the Pacific Rim that in principle will have no tariffs. The TPP would set rules in various fields, not only tariffs but also regulatory issues such as intellectual property rights, government procurement, labor and the environment.

In Japan, the TPP is backed by industry leaders who want to avoid unequal competition with overseas trade rivals, with Japan already lagging behind countries such as South Korea in forging free-trade deals.

Noda has also said trade-oriented Japan needs to tap into the strong growth potential of the Asia-Pacific region.

But Noda also faces major opposition to the TPP. Opponents say joining the framework would devastate Japanese farmers due to an expected influx of cheap farm imports. Anti-TPP momentum has spread to other sectors, including medical services, amid fears over how the accord would affect the country.

Hisashi Yamada, chief economist at Japan Research Institute, said that because the economy would benefit as a whole from the TPP through the expansion of exports of industrial products, a system to circulate a certain level of the proceeds to farmers through government coffers should be created.

Yamada said the pros and cons of the TPP have often been presented in terms of industry versus agriculture. However, “cooperation between agriculture and the manufacturing industry is important,” he said.

According to government estimates, participation in the TPP would boost the nation’s gross domestic product by 0.54 percentage point in real terms.

Trade minister Yukio Edano, who traveled to Hawaii for the APEC gathering, vowed to make “all-out efforts” with his trade policy bureau to implement thorough discussions with TPP participants going forward.

“It won’t be an easy process to reach an accord with other countries while firmly securing the interests of our people and nation,” he said.