Business

Japan eyes merging trade negotiation units in wake of TPP flop

Kyodo

The government plans to form a new cross-ministry unit to handle all free trade negotiations following the U.S. withdrawal from the Trans-Pacific Partnership, a source said Wednesday.

The new entity would handle continued dialogue over the now 11-nation TPP as well as an economic partnership agreement between Japan and the European Union, the source said.

Japan is also a party to negotiations on creating a Regional Comprehensive Economic Partnership, an Asia-Pacific multilateral pact helmed by China.

The move may also reflect anticipation of future negotiations toward a bilateral free trade deal with the United States. U.S. President Donald Trump has said he favors pursuing such deals over mega-pacts like the TPP.

Trump issued an executive order Monday to “permanently withdraw” the United States from the TPP. The pact cannot come into force as signed without the United States, which alone accounts for more than 60 percent of the signatories’ gross domestic product.

A government spokesman said Wednesday there is scope for TPP negotiators to work with those handling other deals.

“We haven’t decided to merge the units or create a new unit at this point, (but) there’s no denying that this is one of the options we’re considering,” Deputy Chief Cabinet Secretary Koichi Hagiuda told a news conference.

The post of chief negotiator for the TPP is currently vacant after the Cabinet decided Tuesday to reassign the former chief negotiator to a job in the Foreign Ministry. Japan completed its domestic procedures last week to ratify the pact.

While Japan has said it will not pursue an 11-party TPP, several other signatories have come out in favor of the move following Trump’s executive order.

Prime Minister Shinzo Abe and Trump held an unofficial meeting in New York in November, but are yet to hold talks since Trump’s inauguration Friday and the subsequent U.S. withdrawal from the TPP.

Meanwhile, Japan is keen to quickly conclude trade negotiations with the European Union, several key members of which are set to hold elections this year. The talks are currently stuck on the issue of tariffs on certain agricultural products.

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