Academic journal article Current Politics and Economics of Northern and Western Asia

Japan's Possible Entry into the Trans-Pacific Partnership and Its Implications*

Academic journal article Current Politics and Economics of Northern and Western Asia

Japan's Possible Entry into the Trans-Pacific Partnership and Its Implications*

Article excerpt

INTRODUCTION

The United States is engaged in negotiations with 10 other countries to form a regional free trade agreement (FTA)-the Trans-Pacific Partnership Agreement (TPP).1 In the negotiations, the United States and the other TPP partner-countries seek to build "a comprehensive, next-generation regional agreement that liberalizes trade and investment and addresses new and traditional trade issues and 21st century challenges."2 The TPP partners also envision the agreement to be a building block towards the establishment of a broader, Asian-Pacific regional FTA, sometimes referred to as the Free Trade Area of the Asia- Pacific (FTAAP).

On March 15, 2013, Japanese Prime Minister Shinzo Abe announced on March 15, 2013, that Japan would formally seek to participate in the negotiations to establish the TPP. The announcement followed an initial expression of interest in November 2011 by then-Prime Minister Noda. In the intervening months, Japanese supporters of the TPP, including representatives of major companies, and TPP opponents, including representatives of the very vocal and politically influential agricultural sector engaged in debate. In addition, lower house parliamentary elections led to the formation of a new government under the Liberal Democratic Party (LDP) and Abe as prime minister. In his March 15 statement, Prime Minister Abe acknowledged the interests and sensitivities of the agricultural groups, but he also insisted that Japan needed to take advantage of "this last window of opportunity" to enter the negotiations, if it is to grow economically.

U.S. and Japanese trade officials are engaged in preliminary discussions on conditions for Japanese entry into the discussions. The Obama Administration has identified issues regarding autos, insurance, and beef, which need to be addressed.

Congress has a direct and oversight role in U.S. participation in the TPP. It must approve implementing legislation, if a final TPP agreement is to apply to the United States. Some Members of Congress have already weighed in on whether Japan should be allowed to participate in the TPP and under what conditions. More may do so as the process proceeds.

The Obama Administration has been proceeding in negotiating the TPP as if trade promotion authority (TPA), which expired on June 30, 2007, were in force. TPA is the authority that Congress gives to the President to enter into trade agreements that can receive expedited legislative consideration. The Administration has been adhering to consultation requirements and notification deadlines that have been an integral part of previous TPA or fasttrack statutes. To maintain this practice, the Obama Administration would have to notify both Houses of Congress 90 calendar days before it begins official negotiations (as opposed to preliminary discussions) with Japan on the TPP.

The TPP is the leading U.S. trade policy initiative of the Obama Administration and a pillar of its efforts to "rebalance" U.S. foreign policy priorities toward the Asia-Pacific region by playing a more active role in shaping the region's rules and norms. As the second largest economy in Asia, the third largest economy in the world, and a key link in the global supply chain, Japan's participation would be pivotal to the credibility and viability of the TPP as a regional trade arrangement. The inclusion of Japan would expand the amount of U.S. trade and foreign investment that the TPP would cover if implemented.

For Japan, participation in the TPP could potentially transform its economy by providing unprecedented access to the Japanese market for foreign exporters and investors. It could also force Tokyo to confront structural economic problems that have long impeded economic growth. It would also symbolize Japan's continued position as an economic power in East Asia, an image that has been tarnished by decades of economic stagnation and the growth of China.

Japan's participation in the TPP would have important implications for the U. …

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