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Fitting the Trans-Pacific Partnership within Japanese National Interest

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Fitting the Trans-Pacific Partnership within Japanese National Interest

By: @Nihonjin1051


Japan-Map.jpg




The remarkable progress in the Trans-Pacific Partnership has been realized and only recently has the negotiation experienced a stall; due in part to Japan and the United States’ differences in basic trade agreements. The Liberal Democratic Party’s Chairman of the TPP Affairs Committee, Nishikawa Koya, recently had explained that it is the strategy of government to secure measures for sugar, wheat, rice and then to maintain the advantage within the negotiations for dairy products, pork and beef. According to the TPP Affairs Committee , they wish to secure acceptable numbers that shall enable Japanese lawmakers’ promise to the people, which is to protect some farm products .

I’m sure you may already see that Japanese media have attempted to ascertain the nature of the disagreement. Some media sources have even assumed and have circulated that Japanese Government was considering special quota of imports wherein American rice imports would be given prioritization over the rice imports of other countries, some media sources have even tried to say that United States was making demands that Japan could not accept, one example was the effective exclusion of cars by taking more than 30 years to abolish tariffs on car imports.

It is understandable that the Japanese Media would correlate the issue of Gaiatsu, which basically means “Outside Pressure”, in context to the United States. The reason for this is because throughout the bilateral relations between Japan and the United States, the latter has always tried to implement Gaiatsu on Japan in order to prying open Japanese markets in bilateral and multilateral trade negotiations. In fact, in earlier times, the issue of Gaiatsu was a reality because it was used by progressive leaders especially when Japan was considered an industrial threat to the United States during the 1970s, 1980s. During earlier decades of bilateral trade friction, resolving dispute with the United States was the most important driver of Japanese trade policy; even multilateral negotiations under the GATT were accompanied by bilateral Japan – US discussions on the side. One then is left wondering, “If Gaiatsu worked so well in the past, then why is it not working so well now in the present time period?”

The answer to this is: WTO. Since Japan was part of the WTO, one method of handling any trade friction with the United States was through the WTO’s Enhanced Dispute Settlement Mechanism. By utilizing the legalized multilateral framework of the WTO, this had strengthened Japan’s bargaining leverage and bargaining power over time and had effectively weakened the US Pressure on Japan regarding any issues of trade.

A second point that I want to emphasize is that Japan no longer is considered a threat, specifically, an Industrial competitor to the United States as it once was during the 1980s. Besides the concept of Ishitsuron no longer influences negotiators from the United States.

A third issue that I want to mention is that from preliminary experience, any notion of tough stance is not taken seriously. As you remember during the preliminary consultation about Japan possibly joining the TPP negotiations in 2012, it was the United States that had announced a policy of not approving Japan’s participation in TPP talks unless all items, particularly rice and other agrarian goods were put on the negotiation table for tariff elimination. Then what happened? It then later backed off.

Japan places a significant premium on its participation on these TPP negotiations: in both strategic and trade terms. The participation of Japan only amplifies both the strategic and economic importance of the TPP for the United States. With the participation of Japan and its involvement in TPP, this enables the TPP to effectively compete with any of the China-led regional comprehensive economic partnerships that are already around, which, ironically, also involves Japan but not the United States. Absent of Japan, the TPP becomes a sideshow in the US strategic game against China and hardly the vehicle to facilitate the US rebalancing to Asia that America would like it to be. Hence, the threats to expel Japan from the TPP negotiatins carry little weight. Besides, Japanese Government understands and is verily aware of the fact that TPP is hostage to any instance of discord in politics in Washington. Unless the Obama Administration has any fast-track authority from Congress, which from our understanding of the Democrats’ decreasing influence and the rising clout of Republicans in Congress and Senate, this is by no means assured. So, in our vantage point, American has to compromise , as we are willing to compromise.



The Trans-Pacific Partnership is a noble collection of developed markets with emerging markets and can help the United States propel itself into the Asia-Pacific region yet again, as part of the American stratagem of realigning towards Asia. One thing that many economists, political analysts as well as defense analysts will take into consideration are three observations:

1. The role of Japan in balancing the developing new order in Asia-Pacific in context to the ascendancy of the People’s Republic of China


2. The economic interdependency of China and Japan --- and how will this economic reality manifest itself into national defense policies


3. The United States – Japanese Mutual Defense Treaty

Japan definitely has a candid responsibility to ensuring that China, its largest trading partner is not in anyway left to think that it is secondary and is dispensable because that is the farthest from the truth. Japanese National Politics – which is influenced by nationalist right wing forces, left with forces and then the centralists. While the right wing forces would prefer Japan to maintain a more robust defense aperture , this would be contradictory to national interest as it would damage the trade with China. The trade with China, as it stands, is already nearing $400 Billion per annum. Where can we replace that number ? $400 Billion. So one is left to wonder how can we maintain the demands of the US-Japanese Military Alliance without having it affect our economic viability and restitution from economic recession ? It requires sound policies – one that will not endanger China , or affect the various intergovernmental processes that have been developed with China these past 30 some years. Will the TPP be positive for Japan ? Will it damage Japanese-Chinese economic ties ? That remains to be seen.






Reference:
Why the US struggles against Japan in TPP negotiations | East Asia Forum

Japan, America and the Trans-Pacific Partnership: Stalemate | The Economist
 
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@Nihonjin1051 what do you think would Japan not be better of with China as a trading partner. It would fix a lot of problems regarding strained relations? The TPP seems very fragile in comparison
 
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@Nihonjin1051 what do you think would Japan not be better of with China as a trading partner. It would fix a lot of problems regarding strained relations? The TPP seems very fragile in comparison

While the TPP provides a wealth of opportunity, I think that Japan should adopt a dualist approach. I'm in favor of adopting the TPP, while at the same time establishing an Free Trade Agreement with China and South Korea. In fact something of which has been discussed in some considerable detail between notable chinese members in this forum ergo, @TaiShang , @Chinese-Dragon , @Genesis , @Edison Chen and others. In fact, @Gufi , the Australians (a TPP proponent) have already recently ratified an FTA with China.

Here's an article that explores valuable points.

Northeast Asia Diplomacy: A Trilateral Way Forward? | The Diplomat

And in regards to the Australian-Chinese FTA point:

China-Australia Free Trade Agreement - Australian Government Department of Foreign Affairs and Trade
 
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this enables the TPP to effectively compete with any of the China-led regional comprehensive economic partnerships that are already around
I do not think China would appreciate it. Honestly the TPP is seen as a balance for the Chinese influence in the area and any pact on the side would be seen as a threat to Chinese interests. But i think you know better about your region this is just my opinion maybe some Chinese friends can share their thoughts.
 
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I dont know if i understood the article correctly but it appears to me as if US is pressuring Japan over cenrtain economic issues and probably also beyond that. US should really start threating their allys as they deserve, Japan was a reliable partner for US since WWII.

In the end there are two major powers in the region that are interested in Japan, one is China and the other US, at the moment Japan is in US camp but its starts to act more and more independently (such as increasing defence budget).
Japan needs to play its cards propperly, US might change its stance against Japan if they solve their territorial issues with China and start to cooperate more, China needs know how in high-tech manufacturing and Japan needs agricultural products, theres no reason not to boost the cooperation in this field.
 
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I do not think China would appreciate it. Honestly the TPP is seen as a balance for the Chinese influence in the area and any pact on the side would be seen as a threat to Chinese interests. But i think you know better about your region this is just my opinion maybe some Chinese friends can share their thoughts.

Truly, my friend, balancing the diplomatic play in this region (East Asia) is like an art ! I do wish we could get the best of both worlds ; greater economic cooperation with the United States and China, bot of which are the two largest trading partners of Japan. The trade between Japan and the United States has already hit over $290 Billion this past fiscal year, whereas trade between Japan and China (+Hong Kong) is almost $400 Billion. The level of trade between Japan and China --- already approaching half a Trillion Dollars' Worth --- is so pivotal. This is one of the reasons why the Government in Tokyo is weary in adopting any policies that may disturb the trade level with China.
 
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Fitting the Trans-Pacific Partnership within Japanese National Interest

By: @Nihonjin1051


View attachment 184612



The remarkable progress in the Trans-Pacific Partnership has been realized and only recently has the negotiation experienced a stall; due in part to Japan and the United States’ differences in basic trade agreements. The Liberal Democratic Party’s Chairman of the TPP Affairs Committee, Nishikawa Koya, recently had explained that it is the strategy of government to secure measures for sugar, wheat, rice and then to maintain the advantage within the negotiations for dairy products, pork and beef. According to the TPP Affairs Committee , they wish to secure acceptable numbers that shall enable Japanese lawmakers’ promise to the people, which is to protect some farm products .

I’m sure you may already see that Japanese media have attempted to ascertain the nature of the disagreement. Some media sources have even assumed and have circulated that Japanese Government was considering special quota of imports wherein American rice imports would be given prioritization over the rice imports of other countries, some media sources have even tried to say that United States was making demands that Japan could not accept, one example was the effective exclusion of cars by taking more than 30 years to abolish tariffs on car imports.

It is understandable that the Japanese Media would correlate the issue of Gaiatsu, which basically means “Outside Pressure”, in context to the United States. The reason for this is because throughout the bilateral relations between Japan and the United States, the latter has always tried to implement Gaiatsu on Japan in order to prying open Japanese markets in bilateral and multilateral trade negotiations. In fact, in earlier times, the issue of Gaiatsu was a reality because it was used by progressive leaders especially when Japan was considered an industrial threat to the United States during the 1970s, 1980s. During earlier decades of bilateral trade friction, resolving dispute with the United States was the most important driver of Japanese trade policy; even multilateral negotiations under the GATT were accompanied by bilateral Japan – US discussions on the side. One then is left wondering, “If Gaiatsu worked so well in the past, then why is it not working so well now in the present time period?”

The answer to this is: WTO. Since Japan was part of the WTO, one method of handling any trade friction with the United States was through the WTO’s Enhanced Dispute Settlement Mechanism. By utilizing the legalized multilateral framework of the WTO, this had strengthened Japan’s bargaining leverage and bargaining power over time and had effectively weakened the US Pressure on Japan regarding any issues of trade.

A second point that I want to emphasize is that Japan no longer is considered a threat, specifically, an Industrial competitor to the United States as it once was during the 1980s. Besides the concept of Ishitsuron no longer influences negotiators from the United States.

A third issue that I want to mention is that from preliminary experience, any notion of tough stance is not taken seriously. As you remember during the preliminary consultation about Japan possibly joining the TPP negotiations in 2012, it was the United States that had announced a policy of not approving Japan’s participation in TPP talks unless all items, particularly rice and other agrarian goods were put on the negotiation table for tariff elimination. Then what happened? It then later backed off.

Japan places a significant premium on its participation on these TPP negotiations: in both strategic and trade terms. The participation of Japan only amplifies both the strategic and economic importance of the TPP for the United States. With the participation of Japan and its involvement in TPP, this enables the TPP to effectively compete with any of the China-led regional comprehensive economic partnerships that are already around, which, ironically, also involves Japan but not the United States. Absent of Japan, the TPP becomes a sideshow in the US strategic game against China and hardly the vehicle to facilitate the US rebalancing to Asia that America would like it to be. Hence, the threats to expel Japan from the TPP negotiatins carry little weight. Besides, Japanese Government understands and is verily aware of the fact that TPP is hostage to any instance of discord in politics in Washington. Unless the Obama Administration has any fast-track authority from Congress, which from our understanding of the Democrats’ decreasing influence and the rising clout of Republicans in Congress and Senate, this is by no means assured. So, in our vantage point, American has to compromise , as we are willing to compromise.





I have doubts about the effectiveness of the TPP, IF the TPP is in fact targeted even if unintentionally(not likely) at China.

First we have a counter proposal for free trade around the Asia sphere, second, we have the Silk road that will continue to spread our influence, third, with with the creation of new banks, the continue evolution of Chinese market, further increase in Chinese capital to invest, and more rule of law as well as many other new measures that China have taken, the effectiveness of this just seems improbable, IF the goal is what I said it was.


Let's not forget TPP, also includes developing countries, would these countries really be able to compete with the developed nations on equal footing?

Japan and the US both has massive interests inside China, and we do inside Japan and US, so anything happening to China will also be felt else where.

The most significant aspect to remember is, China started worse off than almost all of Asia back in 70s, but today we have surpassed most of them on a per capita bases and living standards. Which makes China almost irreplaceable in the way we don't shot ourselves in the foot as often. We are not Plaxico Burress.


From my writing I'm sure @Nihonjin1051 can see that this paranoia about American intentions is not so different from American suspicion about us, so warranted or not, this will be how most Chinese look at the TPP.


BTW, Toyota and Lexus is still the go to car for Chinese in China and abroad, and me as well.
 
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Mulgan misunderstands the power dynamics at play in the TPP negotiations. It is Japan that thinks that Japan is vital to the TPP, not the US. Why?

1). The US continues to grow significantly faster than Japan, TPP or not.
2). The vast majority of growth in Asia (excluding China and India) will come from the TPP block. Japan may be the heavyweight today, but not so in 20 years.
3). Gaiatsu was never a unilateral US tactic, it was always a combination of the correction of trade distortions (e.g. Japanese mercantilism) and cover for the reform efforts of Japanese leaders.
4). Other than autos, nearly all the benefits that would accrue to Japan due to the free trade enabled by the TPP would benefit the US as well (e.g. IP protection, trade in services), but not vice-versa (I.e. the US has many cost advantages over Japan, such as in agriculture). Japan thus has no leverage.
5). Using RCEP as a threat against the US is the equivalent of saying that if the US doesn't fold, Japan will bind itself to China. That is not a serious threat, because total dependence on China for trade is the last thing Japanese nationalists like Abe want.

I am convinced that the TPP will happen, with or without Japan. Japan underestimates the US emphasis on "high standards" in pushing the TPP (the very reason why China was excluded), and risks missing out on a trade agreement where it is a great power with corresponding negotiating power (TPP), leaving it at the mercy of China in the alternatives (RCEP, CJK, etc.)
 
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I am convinced that the TPP will happen, with or without Japan. Japan underestimates the US emphasis on "high standards" in pushing the TPP (the very reason why China was excluded), and risks missing out on a trade agreement where it is a great power with corresponding negotiating power (TPP), leaving it at the mercy of China in the alternatives (RCEP, CJK, etc.)

Why is Vietnam included then....Because of the high standards?
 
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