As a major economy with considerable influence in the Asia-Pacific region, Japan has a key role to play in setting the rules in multiple regional free trade agreements, the head of the Asia-Pacific Economic Cooperation secretariat said.
In a recent interview in Tokyo, APEC Secretariat Executive Director Alan Bollard said he hopes Japan will help achieve high-level trade liberalization in the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), now being negotiated by many APEC members. “Japan is the only very large economy that’s in (both) TPP and RCEP,” Bollard said. “It could play an important role in both of those.”
The United States and 10 other countries involved in the TPP negotiations welcomed Japan as a member during their 18th round of talks in late July, while the RCEP members held their first round of talks in August.
The two regional FTAs are among the many trade liberalization pacts that the Japanese government is seeking to conclude with the aim of pulling the country out of long-term stagnation. “Japan joining negotiations for TPP did change the whole TPP negotiating structure,” Bollard said.
With the world’s third-largest economy participating, the TPP gained economic weight and breadth, as it now accounts for nearly 40 percent of global economic output and a third of world trade. Aside from Japan and the U.S., the TPP negotiations involve Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
RCEP groups the 10 members of the Association of Southeast Asian Nations plus Japan, China, South Korea, India, Australia and New Zealand. With many emerging economies included, the RCEP members account for about a third of global economic output.
Referring to the two separate frameworks, with the TPP seen as being aimed at higher levels of trade liberalization than the RCEP, Bollard said the modeling from RCEP “probably delivers less gains than the modeling from TPP.” But he described the RCEP as an important starting point for emerging economies.
Bollard indicated the intent to monitor the developments of the two regional FTAs so they are in line with the APEC goal of creating a greater Free Trade Area of the Asia-Pacific. “What we wouldn’t want to see would be a divergence between RCEP and TPP into quite different sorts of agreements,” he said. “If that were the case, then I suspect APEC would want to play an integrator role to help bring them together.”
The TPP countries are scheduled to negotiate the trade liberalization pact on the sidelines of the APEC summit, ministerial and related meetings to be held in October in Bali, Indonesia, as they seek to conclude a deal by the end of the year.