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TPP entry green light marks start of tough trade talks

Deals by preceding members are not renegotiable, Canada says

by Sayo Sasaki

Kyodo

As the two-day ministerial meeting of the Asia-Pacific Economic Cooperation forum ended Sunday in Indonesia with calls to promote free-trade initiatives, Japan gained unanimous backing to join the Trans-Pacific Partnership trade talks from the 11 APEC economies involved.

Yet, the green light obtained on the sidelines of the 21-member APEC meeting only marks the start of more rounds of tough negotiations for the world’s third-largest economy, as it finally sets itself on track to join the TPP free-trade talks, with members committed to conclude them within this year.

“I wish we could have entered at an earlier stage, but that is a thing of the past. I am hoping to work on it by looking toward the future,” said trade minister Toshimitsu Motegi, after being welcomed at a TPP gathering in Surabaya on Saturday.

With the TPP countries’ domestic processes for admitting Japan likely to take time — most notably in the case of the United States, which must give 90 days’ notice to Congress, Japan will miss the next round of talks in Peru in May. It could, however, join the following round being planned for late July in Malaysia before another round scheduled for September. That leaves worries over how much room is left for Japan to pursue the protection of its rice and other sensitive agriculture products, while eliminating tariffs imposed on Japanese products, such as automobiles.

“Anything that has been concluded would not be reopened,” Canadian trade minister Ed Fast said shortly after TPP members announced backing for Japan, indicating agreements by preceding members are not renegotiable. “We don’t want to start from the beginning,” he added.

Of the 11 countries in the TPP talks — Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam — Canada and Mexico were the last to join, and it has been reported that the two were told earlier agreements could not be renegotiated.

Under the government of Prime Minister Shinzo Abe, export-driven Japan will seek to boost exports to the fast-growing Pacific region to revive the faltering economy by weakening the yen and keeping Japanese manufacturers from relocating to overseas. But winning support from all TPP countries was not an easy task, because the results of all earlier bilateral talks with the different members affected one another.

Canada, New Zealand, Australia and Peru were among the last countries that hadn’t given the official nod by the week of the APEC meeting, as much of their talks had been complicated by Tokyo’s concessions made during the bilateral preparatory talks with the United States.

To win U.S. support, Japan allowed the leading economy of the TPP to retain the tariffs it imposes on automobiles and trucks for a period longer than agreed to under the U.S.-South Korea free-trade agreement and also agreed to hold bilateral talks on autos and nontariffs measures parallel to the TPP talks.

“We will not close with Japan on TPP unless we are able to close on all of these issues,” said acting U.S. Trade Representative Demetrios Marantis after the finalization of the bilateral talks, raising concern that there could be added pressure on the TPP negotiations to come.

“We cannot get perfect scores when we are joining after others and we have to obtain permission from all the participating states,” said economic revitalization minister Akira Amari.

Furthermore, the concessions for the United States gave reasons for Canada and Australia to demand similar treatment in their respective bilateral negotiations and even left open the possibility of more TPP members making such demands in the future.

Japan sent Amari, who is the minister in charge of TPP issues, to Surabaya in a hastily arranged one-day visit the day before the kickoff of the APEC meeting, expecting to gain all the requisite approvals within the time frame. The unanimous backing did not come until the day after, reflecting the difficulties of concluding negotiations.

With Japan’s entry, TPP countries would account for nearly 40 percent of global economic output and about a third of world trade. The ministers of TPP states noted that Japan’s participation will underscore the economic significance of the TPP and its promise as a pathway toward a Free Trade Area of the Asia Pacific.

While repeating pledges to promote various free-trade initiatives in the joint statement adopted at the APEC meeting, some non-TPP countries were wary toward joining the negotiations themselves.

South Korean Trade, Industry and Energy Minister Yoon Sang Jick told Motegi during a bilateral meeting in Surabaya that he does not see the merit in immediately joining such a multilateral framework, according to a Japanese government official.

South Korea has already concluded bilateral FTAs with many members in the TPP talks, while also engaging in a trilateral talk with China and Japan.

“We are just not able yet to ascertain as to whether or not a TPP proposition would be net beneficial to Indonesia,” said Indonesia’s Trade Minister Gita Wirjawan at the joint press conference announcing the APEC meeting’s fruit.

“I think we would certainly be happy to monitor and see how things go on the TPP site,” he added.