Countries may need to boot Japan from TPP

Published online: Mar 01, 2014
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DANA POINT, Calif.—The United States and other countries in the Trans Pacific Partnership may have to tell Japan to get out of the group if it won’t agree to the free-trade proposals to which the other countries have agreed, a key U.S. trade leader said here on Tuesday.

“Japan has slowed it down,” National Foreign Trade Council President Bill Reinsch said in a panel discussion at the International Sweetener Colloquium.

“Japan wants to protect five [agricultural] products” and also seems unwilling to join in an agreement that is already waiting, he said.

Speaking the day after the 12 ministers met in Singapore and did not appear to have made much progress, Reinsch said he could foresee three scenarios for TPP: “People will start to take things off the table and the agreement [becomes] less ambitious; it goes on the back burner; or countries go to Japan and say you are not ready.”

“There is a lot of kabuki,” Reinsch said, referring to the classical Japanese dramatic dance.

If the other countries tell Japan it must agree to a genuinely free trade agenda or leave, that could give Prime Minister Shinzo Abe the pressure he needs to go back to his party and insist that his country open its markets or else the more ambitious TPP would be concluded without Japan, Reinsch said.

The departure of Japan would mean leaving out the biggest market in the TPP group, but Rowena Hume, the trade and economic counselor at the New Zealand Embassy, noted that Americans do not seem to have noticed how big and growing economies such as Vietnam and Malaysia have become.

“It’s all about opportunity in the populations of Asia,” Hume said.

Reinsch also said that the thinking among free traders about trade promotion authority is evolving. The trade community has always assumed that President Barack Obama would have to get trade promotion authority (TPA) so that his negotiators could tell the negotiators from other countries that they could finalize an agreement that Congress would only vote up or down.

But opposition to TPA is now so strong that some trade leaders are thinking it might be easier to try to finish TPP and “take your chances.”

Some foreign governments say TPP can’t be finished until Obama has TPA, Reinsch said, but not all.

Reinsch said he believes trade advocates will win on TPP but “it won’t be pretty. In its own way it will be like ‘Breaking Bad,’ ” a reference to the popular cable TV crime drama series about a high school chemistry teacher who unsuccessfully tries to balance a normal family life with the dark world of international drug dealing.

The best case scenario, Reinsch said, is that TPP would be wrapped up when Obama goes to Asia in April, with the language worked out in the next six months and Congress voting in the lame-duck session, first on TPA and then on TPP.

If that doesn’t happen, he said, then both TPA and TPP will drag on “into 2015 or beyond.”

The panel also discussed the Trans-Atlantic Trade and Partnership Agreement with the European Union.

Marjorie Chorlins, the senior director for Europe at the U.S. Chamber of Commerce, said the goal is to create an agreement that would set a standard for the world, particularly on issues of regulation.

She said she does not believe European Union negotiators are going to be willing to import hormone-fed beef from the United States, but she said the agreement would increase exports of non-hormone–fed beef.

Chorlins also said the geographic indicators—the naming of agricultural products from only the place they originated—will be an important issue. She said she believes that that some parts of the U.S. food industry could accept some of these indicators.

Source: www.hagstromreport.com