Business

TPP remains largely unchanged in attempt to lure back U.S., Japanese official says

by Cory Baird

Staff Writer

While President Donald Trump’s decision to pull the U.S. from the Trans-Pacific Partnership initially put the deal on life support in January 2017, details released Wednesday revealed that the remaining 11 countries have managed to agree on terms close to the agreement’s original form.

Japanese diplomats, thrust into a new role as lead negotiators, worked to keep the deal largely unchanged except for key provisions which could eventually be reinstated to lure the United States back to the deal, and to potentially re-engage the Trump administration in the Asia-Pacific region.

“One of the main reasons to keep the differences between the original TPP-12 and TPP-11 to a minimum is to induce the U.S. to come back to the deal,” said Kazuyoshi Umemoto, Japan’s chief TPP negotiator, during a news conference in Tokyo on Tuesday. “Although Japan is a trading nation, and we favored trade liberalization in general, we always had to be on the defensive side. But for the first time with TPP-11, we were able to take the lead.”

In total, the new agreement removes 22 items, many of which were specifically pushed for by the United States.

“Formally speaking the 22 amendments are suspended, but the TPP is a progressive agreement. That is why in addition to having new member economies, a change to the TPP agreement would not be impossible,” said Kenichi Kawasaki, a professor and senior fellow at the Tokyo-based National Graduate Institute for Policy Studies, who previously wrote an economic analysis of the original deal.

While U.S. participation in the trade pact remains improbable in the short term, during his January visit to Davos, Trump indicated an openness to rejoining the deal and on Friday, 25 senators pressed the president to re-engage on negotiations, according to The Washington Post.

“There are important geoeconomic considerations driving a more proactive Japanese foreign economic policy,” said Mireya Solis, a senior fellow at the Brookings Institution in Washington. “In the long term, the goal is to anchor the U.S. to the regional architecture by encouraging its return to TPP. In the medium term it is about developing cooperation among like-minded countries to tame Chinese mercantilism in areas such as excess steel capacity and forced technology transfers.”

The deal — now officially known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — is expected to be signed on March 8 in Chile, and would enter into force once a majority of the 11 members pass corresponding domestic legislation.

In Japan, TPP legislation will be debated in the current Diet session with the hope of enshrining the deal into law by summer, said Umemoto, who throughout his speech kept his hand close to a copy of the original TPP deal.

Whether or not Washington is drawn back to trade deals in Asia, Tokyo appears ready to engage with the United States on other fronts in the region. On Tuesday, reports said Japan is seeking to create a regional infrastructure agreement with the U.S., India, and Australia, an idea seen as a rival to China’s Belt and Road Initiative.

“U.S. withdrawal from the TPP did undeniably shake confidence across Asia about U.S. commitment to remaining a Pacific power and championing the rule of law,” said Shihoko Goto, a senior associate for Northeast Asia at the Wilson Center in Washington. “With TPP-11, Japan has taken the lead, but the expectation is that Tokyo will continue to champion the trade deal until the United States eventually returns to the fold of multilateral trade deals.”