Business

In Tokyo meeting, officials forge ahead with TPP even as Canada wavers

Kyodo/reuters

The chief negotiators of the 11 remaining signatories to the Trans-Pacific Partnership met Monday in Tokyo to work on getting the free trade pact signed without the United States.

The focus of the two-day meeting is on whether members can get Canada onboard for an early signing, with Australia, Chile and Japan pushing to hold the official ceremony by March. They agreed on core elements of the pact in November in Vietnam but left some matters for further negotiation.

“We should be able to reach consensus on the time and date for the signature at the chief negotiators’ level,” said Toshimitsu Motegi, Japan’s minister in charge of TPP negotiations, at the start of the meeting, underlining his hope that the latest round will be the final talks before the signing. “This target date is absolutely necessary to enable all the parties to start domestic procedures,” Motegi said.

Japan wants the deal signed by early March so the ratification bills can be submitted to the Diet during the 150-day legislative session that started Monday.

Canada is holding out to secure protection of its cultural industries, like movies, TV, and music, and has said it will not be rushed into signing a deal that other members hope to conclude by March. That is casting a shadow over a meeting of trade officials from member countries this week in Tokyo, and is raising questions about the economic benefits of a pact that doesn’t bring Canada into the fold.

“The overall economic impact of the CPTPP would be significantly further eroded if Canada, which is a Group of Seven nation, decides to postpone its decision about joining,” said Rajiv Biswas, Asia-Pacific chief economist at IHS Markit. After Trump pulled the United States out of the Trans-Pacific Partnership agreement last year, Japan took a leading role in pushing for a replacement pact. Along with Australia and Mexico, Tokyo has lobbied hard for the agreement, which aims to eliminate trading barriers and tariffs on industrial and farm products across the 11-nation bloc whose trade totaled $356 billion in 2016. “Our strong preference is for all 11 countries to join the first wave, but our focus is on bringing a new TPP agreement into force as soon as possible with those who are ready to move,” Australian Prime Minister Malcolm Turnbull said in Tokyo last week. The talks that kicked off Monday are expected to iron out technical differences on rules for the treatment of labor and intellectual property, but are unlikely to yield a conclusive statement that member countries will quickly sign the pact.

Canada, which would be the second-biggest economy in the bloc after Japan, is also unhappy over rules of origin for cars.

“Like Vietnam, one of the crucial elements we secured was what is known as a work plan, a mechanism to deal with outstanding issues, which for Canada includes ensuring the deal provides better access and terms for autos and does not affect our unique cultural sensitivities,” said Joseph Pickerill, spokesman for Canadian Trade Minister Francois-Philippe Champagne, in a statement.

Vietnam has emerged as another swing country because of its resistance to rules that would improve rights for its workforce, although Hanoi hasn’t shown resistance to signing the pact.

“Canada has taken a step back to say they cannot sign TPP 11 right away, but there are expectations that if the remaining 10 countries move ahead Canada will eventually come back,” said Junichi Sugawara, senior research officer at Mizuho Research Institute.