Business / Economy

TPP cements U.S.-Japan ties; Congress could undo pact

by Eric Johnston

Staff Writer

The conclusion of the Trans-Pacific Partnership agreement offers a major boost to the United States-Japan bilateral relationship and the promise of closer economic integration. It was agreed Monday after a marathon negotiating session in Atlanta.

But while the mood in official Japan is one of celebration, American experts warn TPP is far from certain to be ratified by the U.S. Congress anytime soon — given that it is becoming a campaign issue among congressional representatives and U.S. presidential candidates.

“In a strategic sense, (the agreement) is huge. TPP establishes the U.S. and Japan as the rule makers when it comes to trans-Pacific trade,” said Paul Sracic, a politics and international relations professor at Youngstown State University in Ohio, and an expert on the TPP negotiations.

He noted the agreement closely followed the passage last month of security legislation that will strengthen U.S.-Japan defense ties. Assuming TPP wins congressional approval, it would mean significantly closer economic ties to Washington, he said.

Sheila Smith, senior fellow for Japan studies at the Council on Foreign Relations, said the agreement was a significant breakthrough for both countries, especially since the U.S. and Japan account for about 80 percent of TPP in economic terms.

“Japan has long wanted an economic partnership agreement with the U.S., so this is the realization of that goal,” she said.

The deal is expected to increase bilateral trade in auto parts and agricultural products. It also touches on the regulation of cosmetics, medical devices and pharmaceuticals, and other categories include information and communications technology, wine and distilled spirits and textiles.

But while ratification of the TPP agreement in Japan is all but certain, the picture is much less clear in the U.S.

“There is lots of doubt that Congress will ratify this version of the TPP, even after the 2016 election,” said Richard Katz, editor-in-chief of the Oriental Economist Report and an expert on the Japanese economy. “President Barack Obama needs Republican Party support and he is not getting it. It will be a close call.”

While details of the agreement are still being studied, initial reactions from Republican congressional leaders, normally counted on to vote for TPP, have been critical of the last-minute concessions the Obama administration made to secure a deal.

Democrats also expressed concern about what it means for U.S.-Japan economic relations. They took issue with the argument by Tokyo and Washington that TPP is needed to counter China’s influence.

“I’m deeply concerned about the effect TPP may have on our trade balances with Japan, China, and Vietnam. Some have argued falsely that TPP would help contain China’s growing economic influence and power in the Pacific Rim,” Brad Sherman, a California Democrat and senior member of the House Foreign Affairs Committee, said in a statement.

“In reality, (the TPP) agreement would expand Chinese exports to the U.S. because goods made mostly in China and finished in another Asian country would have duty-free access to the U.S. market,” he said.

With 10 presidential candidates also having expressed reservations about TPP, the issue could turn into a major political football over the winter months as the primary election season begins.

“The timing for this final agreement couldn’t be worse. It’s virtually impossible, given the review periods mandated in the TPP legislation, for Congress to even consider implementing legislation prior to the early primaries. The safest thing to do politically will be to put this off until the next lame duck Congress, more than a year from now,” Sracic said.