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Tokyo turns down Australian proposal for TPP without U.S., vows to keep pushing Trump

by Reiji Yoshida

Staff Writer

On Tuesday Tokyo turned down — at least for now — an Australian proposal to revise the Trans-Pacific Partnership free trade agreement, saying a TPP deal without the U.S. is “meaningless.”

Tokyo said it will instead continue to urge Washington to get on board as other member nations look to salvage the deal, said Koichi Hagiuda, deputy chief cabinet secretary, during a daily news briefing.

Hagiuda’s comments came a day after U.S. President Donald Trump signed an executive order to end U.S. participation in the 12-country pact.

“Without the U.S., the TPP pact is meaningless as Prime Minister Shinzo Abe has clearly said,” Hagiuda told a regular news conference at the Prime Minister’s Office. “The fundamental balance of interests is lost without the U.S.”

Hagiuda said for now Japan was “not thinking about an action with 11 countries” to push for a TPP without the U.S.

But Australia is trying to persuade member countries to reformulate the deal, possibly inviting China to join.

On Monday, Australian Prime Minister Malcolm Turnbull had a 30-minute teleconference with Abe. Hagiuda said the two discussed “the importance of free trade including the TPP,” but declined to comment on whether they discussed Canberra’s push for a TPP without the U.S.

Turnbull, meanwhile, also spoke overnight with the prime ministers of New Zealand and Singapore about the possibility of proceeding without the U.S.

“Losing the United States from the TPP is a big loss, there is no question about that,” Turnbull told reporters in Canberra on Tuesday. “But we are not about to walk away … certainly there is potential for China to join the TPP.”

Australian Trade Minister Steven Ciobo said Australia, Canada, Mexico and others explored the concept of a “TPP 12 minus one” — the pact without the U.S. — at a World Economic Forum meeting in Davos, Switzerland, last week.

For now, the TPP won’t take effect, as the U.S. alone accounts for about 60 percent of the combined gross domestic product of the member countries. Japan is the second-largest economy among the 12 countries, accounting for 17.7 percent of total GDP.

For the TPP to take effect, at least six countries that account for 85 percent or more of the combined GDP of the 12 members should ratify the pact. To invite a new country, a renegotiation of the TPP agreement would be required.

Japan is the second-largest economy among the 12 countries, accounting for 17.7 percent of total GDP.

Former U.S. President Barack Obama framed a TPP without China in an effort to write Asia’s trade rules before Beijing could, establishing U.S. economic leadership in the region as part of his “pivot” to Asia.

Hagiuda said Tokyo believed a free trade system based on fair, shared rules is “a source of economic growth of the world.”

With that in mind, Japan will keep urging the U.S. to come back to the TPP deal. Tokyo will also use the TPP as “a standard reference” in its negotiations on other free trade pacts, such as the Regional Comprehensive Economic Partnership, Hagiuda said.

Sixteen countries, including Japan, China, South Korea, Australia, New Zealand, India, Indonesia, Malaysia and Thailand, have held negotiations to conclude a RCEP free trade pact. RCEP does not include the U.S.

Japan had hoped the TPP would be a world-standard free trade pact, giving Japan leverage in negotiations with other countries in setting trade rules favorable to Japan, in particular with China.

However, the TPP now looks dead in the water with Trump’s announcement. Officials and observers in Japan are concerned it may give China a better position in RCEP talks, such as efforts to protect its state-run corporations.

“We’re already hearing calls for a less ambitious trade agreement in the region with lower standards, lower protections for workers, lower protections for the environment,” Obama told a news conference in Nov. 20 in Lima, where top leaders of TPP countries together pushed for the pact.

“That kind of agreement would obviously exclude U.S. workers and businesses and access to those markets. … I think not moving forward would undermine our position across the region and our ability to shape the rules of global trade in a way that reflects our interests and our values,” Obama said.

On Tuesday Chilean Foreign Minister Heraldo Munoz said it had received positive responses after inviting ministers from other TPP nations, as well as China and South Korea, to a summit in March to discuss how to proceed with other free trade pacts.

Information from Reuters, AFP-JIJI added