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Australian FTA limits Obama’s TPP options

U.S. leader may have to cede more ground to advance deal

by Eric Johnston

Staff Writer

The Japan-Australia free trade deal that lowers or ends tariffs on Australian beef and dairy exports to Japan and on Japanese exports of machinery, consumer electronics, auto parts and food products to Australia, now puts pressure on the United States — and President Barack Obama in particular — to make further concessions to advance stalled Trans-Pacific Partnership treaty negotiations.

But with growing opposition in the U.S. Congress toward the TPP, and especially to granting the president the authority to negotiate a deal with little input from the legislative branch, Obama is likely to have even less room to maneuver when he meets Prime Minister Shinzo Abe later this month.

With U.S. midterm congressional elections in November, a controversial international trade pact is likely to be the last issue most of those up for re-election will want to deal with. While a bipartisan bill to give the White House fast-track negotiating authority has been introduced, Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi have come out against it. Over 150 Democrats have also indicated their opposition, as have many members of the tea party faction of the Republican Party.

With fast-track authority, Obama would be able to negotiate a TPP pact with minimal congressional input. The final deal would be presented to Congress for either a yes or no vote, but no amendments could be added.

Without such authority, however, a growing number of experts in Washington worry that the TPP will fail.

Many in Japan are hoping the Japan-Australia free trade agreement will serve as a template that will persuade Obama, and the U.S., to accept a similar deal for the TPP.

Chief Cabinet Secretary Yoshihide Suga said Tuesday that he hoped the agreement would contribute to more active regional economic links like the TPP agreement.

However, in a telephone interview with The Japan Times, Michael Heazle, of the Griffith Asia Institute at Griffith University in Brisbane and an expert on Australia-U.S.-Japan relations, said the effect of the new Australia-Japan bilateral treaty is unlikely to do much for increasing TPP support in the U.S.

“I don’t see the creation of a Japan-Australia free trade agreement as having any impact on the domestic political situation in the U.S. to the TPP,” he said.

Still, the fact that Japan’s rice tariffs were exempted under the agreement with Australia means Tokyo can now take a tougher line against Washington in TPP negotiations over reducing agricultural tariffs.

As to the free trade agreement itself, Japan’s high-end beef producers, like those of Kobe beef, appeared Tuesday to be relatively unconcerned with what the deal will mean for them.

However, in Australia, the opposition Labor Party criticized the pact Tuesday, saying the deal, which lowered Japanese tariffs on refrigerated Australian beef to 23.5 percent from 38.5 percent, did not go far enough, creating potential political headaches for Prime Minister Tony Abbott.