Ad-hoc reflections on the meaning of the TPP

The one thing I’ve noticed since arriving in Japan and having reflected on the TV coverage of the TPP discussions and debate, is quite how earnest, and I would argue, over-earnest the debate really is in Japan, notwithstanding the potential future impact on an over-represented voting bloc in Japan.

The fact of the matter is, no one really knows what the TPP is going to be and (from the point of view of the Japanese at least it would seem) its main sponsor, the US itself, may well be the biggest spanner in the works of any eventual TPP deal that even half way meets the expectations originally articulated in regards to this “high quality” trade and investment agreement.

The one thing we have to remember is that while the US is committed to a certain kind of a liberal trade order, it has a pretty chequered history in regards to its commitment to the liberal political and trade order in general. There are a number of nations involved (including the one from which this author comes) that are extremely sceptical about any deal eventually negotiated by any American administration, and given that the 60 vote necessity in the Senate now almost appears semi-constitutional, these nations will be even more sceptical going forward.

The additional problem that some countries will have is that they will in trying to meet US requirements potentially risk aggravating some of their own key political constituencies while possibly getting nothing much in return. In New Zealand for example any proposed changes to the government procurement systems in health, and IP laws (which will only advantage US companies – something which came up pretty quickly in the debate in NZ) which the US is pushing for through the TPP, will be looked upon quite suspiciously. In fact the very popular government in New Zealand was not willing to risk even a little bit of political capital on this and ruled out any fundamental changes to the Pharmac model due to TPP negotiations, without a single bit of discussion. If a popular government is unlikely to give the US what it wants, it is going to be a considerably harder road for other nations – including Australia and Japan, whose domestic political situations are much more precarious.

There is also some suspicion arising among some fellow TPP travellers in regards to the US’ primary motives toward accession to the TPP. The original P4 countries (which involved New Zealand and hence why a pesky little non-important country genuinely committed to free trade like NZ cannot be brushed away in the discussions) that are at the “core” of the TPP, and not a few of the 5 negotiating to join are somewhat concerned about just how eager the US became toward the TPP in 2010 in particular. In fact top Australian and New Zealand political figures concerned at some of the external rhetoric floating around the TPP in Washington have had to communicate to key figures supporting the TPP  in no uncertain terms that the moment they (NZ and Australia – and likely Malaysia and Singapore wouldn’t be far behind in echoing the sentiment) smell a China containment policy, they are gone from the negotiations.

After all Australia had to sign a FTA with the US which did not go anywhere near as far in liberalizing the US agricultural market as hoped by the Australians, and due to the same range of interests and stakeholders a NZ-US FTA has not been a realistic consideration. Perhaps these comments are unfair and that the Obama administration in particular is more genuine. But in terms of US commitment to trade liberalization when it doesn’t suit them – well I guess many of these nations will believe it when they see it.

That is not to say that the TPP is a dead duck or negotiations are of  no value. In the short-term it could do good things in terms of clarifying rules of origins, procedures for trade remedies, and may even be a useful mitigating dynamic pushing back against tendencies towards protectionism that some are predicting will arise in the next year or two. However on the trade front – the most important front for most of the nations involved – this is likely to take a very long time and it is unlikely any deal – at least one as high in quality as initially desired – will be wrapped up in the space of a few years (unless some kind of security or economic jolt makes it more diplomatically and politically feasible).

What does this mean for Japan? Well first of all Peter Ennis gives a run down on the current inter-personal and diplomatic dynamics between Tokyo and Washington that I have no additional insights to add to. Essentially he argues that Tokyo and Washington, surprise surprise, might well be on different pages in regards to the symbolic and diplomatic dimensions of Japan’s agreeing to start negotiations.

However from my point of view it seems the Noda government’s signalling about the meaning of the TPP is somewhat curious overall. In one, simplistic sense, Japan has little to lose from joining negotiations as it is unlikely to be the only one with baggage coming into the negotiations. It is just more up front and earnest about them. The time scales here are in the order that Japanese agriculture and the government would have ample time to respond to any changes. After all, in the Australia-US FTA the US implementation of the limited amount of agricultural liberalization was somewhat tardy. These sort of dynamics do not appear to have been communicated very well in the Japanese media. In a sense, Kan’s concept of a “third opening” was somewhat of an over-exaggeration to the degree that Kan seemed to be focused solely on the TPP which took on more symbolism than it perhaps deserved.  The TPP could  be very big. But there is a long way to go. I thus found it quite interesting watching one Japanese TV program where it remarked how the production of certain agricultural goods had in the space of 25 years (or so) reduced a number of times over since liberalization. An economy can change quite a lot in 25 years and for the most part, it probably should. I don’t doubt that trade liberalization had something to do with these reductions but little mention was made of the redistribution of capital and labour resources that likely happened in the interim period.

Secondly, there is the question of whether the TPP as important as some of the other developments in global finance and trade. It may or may not have escaped the attention of some that a certain neighbourly competitor (South Korea) has already signed an FTA with Europe, and bilateral agreements with the US and Australia appear to be just around the corner. For the record, South Korea is only somewhat interested in the TPP.

Or perhaps all of the talk around the TPP, as Ennis in more polite terms suggests, a good way to placate the US diplomatically in order to relieve pressure over the Futenma issue? It may also be a valuable way to draw domestic fire away from Japan’s other more interesting trade projects, namely the already signed agreement with India, continued and redoubled efforts with the EU and Australia, and the start of China and South Korea trade discussions.

Japan also fundamentally likely shares concerns about the TPP turning into not just an economic hedge against China but also a full on “anti-Chinese” project. In this sense, the US should be secure enough in its relationship with Japan, and understanding enough of Japan’s own national interests, and recognise that the pursuit of simultaneous trade agreements with key Asian neighbours is actually a very good idea for Japan in terms of how it effects its long-term ability to manage diplomatic, economic and security tensions in East Asia.

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8 thoughts on “Ad-hoc reflections on the meaning of the TPP

    • Too true and I’d probably go further and say since Nixon and Sato. Problem with Nakasone was that he was way out in front of “Tokyo” on trade and economic matters generally.

  1. this is one of the few “pressing” items on the political agenda that I really haven’t figured out my own stance yet. I’ve got this impression very few people, for or against, have any real clue what this TPP really will mean for Japan in the long term.

    • Dead right. In general I’m a free trade advocate, at least between developed countries, but TPP discussions are getting a bit weird and not just in Japan. One side believes that it represents some kind of economic paradise while the other seems to think it’ll be the of the world. Surely it’ll be like every other negotiation and countries will give up as little sovereignty for as much benefit as they can possibly get. In which case Japan should get in and if really starts to look like a raw deal then get out. It’s not like they cede their sovereignty by starting negotiations! Anyway it’s likely that if one country sees something it doesn’t like then a few others will be there with them.

  2. Six months ago, I had not clue about TPP. The more I hear what it means to people who are concerned about anything other than low-priced goods, the more I feel uneasy. Although the GDP that is forecast to be lost in the agriculture sector may be made up in manufacturing through exports…the changes are something I really feel a need to prepare for. In addition, everyone I’ve talked to is fuzzy on how TPP is actually going to work and how to deal in practical terms with an increase in immigration, decrease in wages, and how legitimate grievances could be filed. Basically, there is grave concern over who is going to be watching out for the ‘little guy’. My guess is no one. Anyway…

    • Yeah a big problem is that the TPP if implemented in it’s ideal form would mean the shrinking of national sovereignty in ways that only the EU has really considered up until now. Countries in Asia and the Pacific and Americas have grown used to reducing sovereignty in terms of trade and if it was only that then well so be it. But it could be much more. That is not even to say it would by definition be a bad thing but I think it is problematic to suggest that Japan’s participation in the TPP is the defining signal of whether Japan is “internationalizing” or “turning inward” which is how the Western media has been portraying it and definitely will portray it if Noda doesn’t go through. I still think Japan should agree to enter negotiations but be very realistic. No fanfare like Kan’s “third opening” etc.

  3. Pingback: Japan’s confused debate about the TPP | East Asia Forum

  4. Pingback: The TPP and Japan’s Geopolitical Environment « σ1

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