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U.S. Congress’ egocentric strategem in the TPP talks

Sentaku Magazine

On June 24, the U.S. Congress cleared a legislative bill authorizing President Barack Obama to pursue negotiations for the Trans-Pacific Partnership free trade agreement, ending weeks and months of partisan bickering.

To get a clear overall picture, it is essential to recognize two facts. One is that Obama is being punched from both sides and pushed into a corner like a losing boxer. The other is that regardless of the result of his fight with Congress, the United States will become increasingly self-centered in pursuit of its national interests in international trade negotiations.

The U.S. Constitution gives power to negotiate trade-related matters to Congress. Unless Congress delegates the power to the administration, the Office of the U.S. Trade Representative, which is under immediate control of the president, does not have any more authority to negotiate trade deals than “an errand boy.”

That is why Canada and Australia said they could not take part in Cabinet-level TPP trade talks unless Congress grants the negotiating authority to the executive branch of the U.S. government.

In the past, a law called the Trade Promotion Authority Act gave the president the “fast-track negotiating authority.” This time, however, a new law named the Trade Priorities and Accountability Act was passed, clarifying negotiation priorities from the viewpoint of Congress and requiring the president to conduct trade negotiations with clear explanations. Obama signed the law on June 29.

In concrete terms, the new TPA law lists checkpoints incorporating Congress’ demands, such as whether a negotiating partner is free from suspicion of manipulating the foreign exchange rate, whether it is abiding by international labor standards and whether it is following environmental protection standards. It also provides public access to information while trade negotiations are going on, including disclosure of the draft of a trade deal. If either house of Congress determines that the executive branch has failed to meet demands put forward by Congress, the negotiating authority will be withdrawn from it. In short, the law does not provide the president with fast-track negotiating authority. Instead, it allows Congress to check the process of trade negotiations as the occasion demands. Although both the past and new laws are abbreviated as TPA, their character is greatly different from each other.

The fundamental differences between these two pieces of legislation have not been reported by any of the major media in Japan, keeping the public in the dark about the highly complicated moves within the U.S. Congress.

Instead, their reports are completely off the mark as many say that once the law was passed, the TPP talks would make rapid progress and the trade ministers of the participating nations would be free to reach a broad agreement.

Such optimism, which appears to be shared by the government of Prime Minister Shinzo Abe, is close to a sheer fantasy because Obama will most likely be forced to comply with Congress’ selfish demand of protecting domestic employment while having the U.S. trading partners open their markets to American products without limit.

Congress has been engaged in bitter partisan politics and that is bound to intensify as the 2016 presidential election nears. The participants in the TPP talks will have to examine the conditions attached to the operation of the Trade Adjustment Assistant Act, a law which the Democrats demanded from the viewpoint of providing American workers with sufficient protection from the free trade accord.

There is a possibility that Malaysia, whose labor conditions are regarded as having failed to meet internationally accepted levels, may withdraw from the TPP talks. The parties to the talks are still divided over such issues as treatment of state-owned corporations and protection of intellectual property rights. All these may cause the TPP talks to take a sinuous course.

In Japan, the farming bloc and certain consumer groups may welcome such consequences. But that wishful thinking is totally misconceived because the confusion in Congress has made it clear that the U.S. will become more introverted, placing top priority on domestic demands and interests.

Should the current TPP talks be suspended until after the U.S. presidential election next year, the next administration is bound to take a tougher stance in trade-related matters to protect American national interests because a candidate who does not run on such a platform cannot win the election.

Alternatively, the U.S. can give up on the TPP negotiations and start instead to work out a bilateral free trade agreement with Japan. In such an event, it is all but certain that Washington will make a much tougher demand concerning Japan lowering its tariffs on agricultural imports.

Abe has made up his mind to get along with the U.S., which will make unreasonable demands on Japan.

From around April, Obama suddenly became active in pushing lobbying activities. Abe’s visit to Washington late that month may be interpreted as part of that lobbying. U.S. Ambassador to Japan Caroline Kennedy returned to the U.S. capital shortly before Abe’s visit to support Obama.

Although details of her activities have not been made public, suddenly drive hunting of dolphins in Japan, which was criticized by the documentary film “The Cove” more than five years ago, resurfaced as a topic of discussion. The Japanese Association of Zoos and Aquariums (JAZA) instantly decided to ban aquariums from acquiring dolphins caught in drive hunting, giving in to a notice from the World Association of Zoos and Aquariums (WAZA), which threatened to dismiss its Japanese member organization unless Japan uses a more humane way to acquire dolphins.

If the timing of the Washington visits by Abe and Kennedy is taken into account, it is possible that the Obama administration utilized the dolphin issue to win support of environmentally- minded Democratic lawmakers, many of whom are opposed to the TPP talks.

In his address before a joint session of Congress on April 29, Abe said: “The TPP goes far beyond just economic benefits. It is also about our security. Long-term, its strategic value is awesome. We should never forget that.” He added, “Also for the U.S.-Japan negotiators, the goal is near. Let us bring the TPP to a successful conclusion through our joint leadership.”

The way Abe linked trade and security issues must have come as a surprise to many in Congress as they interpreted his words as a sign that Japan will ultimately yield in the trade talks.

In Japan, the projected TPP agreement tends to be construed as a means of containing China. But the U.S., which regards itself as the guardian of a free economy, does not take that kind of exclusionary attitude. The Obama administration never indicated the TPP will exclude China but instead stated that it is open to China as well.

In his State of the Union address in January, Obama said, “China wants to write the rules for the fastest-growing region. . . . We should write those rules.” But he refrained from linking trade and security matters. This is because the danger that such linkage could lead to the formation of economic blocs is clear to all.

The Obama administration’s basic posture toward China can be summarized as follows: (1) avoid confrontation with Beijing, (2) strengthen bilateral economic ties, and (3) take the initiatives in writing the rules.

Presumably this fundamental stance is shared by the other members of the Group of Seven industrialized nations. Until December 2012, which marked the end of the rule by the Democratic Party of Japan with the resignation of Prime Minister Yoshihiko Noda, Japan used to say that the TPP accord was open to any interested party.

Since Abe returned to power by succeeding Noda, however, his administration has regarded the TPP scheme as a means of containing China. The prime minister may be an easy man to deal with for the U.S. Congress, which is sensitive to American economic interests, particularly House members. This is because members of Congress can expect that Tokyo will make concessions on trade matters if Washington shows a strong card related to security. If that happens, Japan would have to do a lot more than “agreeing to stop the drive hunting of dolphins.”

This is an abridged translation of an article from the July issue of Sentaku, a monthly magazine covering political, social and economic scenes.