The Japanese government has entered negotiations with the 10 other nations still signed on to the sweeping Trans-Pacific Partnership (TPP) free trade pact, after the United States pulled out earlier this year.
Some parties strongly believe that implementing the treaty minus the enormous American market will produce very little benefit. However, creating a comprehensive U.S.-less free trade zone across the Asia-Pacific region would have important meaning beyond the numbers: namely, it would be a strategic check on the protectionist policies of U.S. President Donald Trump.
When Trump announced the U.S.'s withdrawal from the TPP in January this year, the Japanese government was initially cautious about proceeding without the world's largest economy, and indeed had hoped the U.S. would return to the fold. However, after going through bilateral economic talks in April, Japanese officials decided the U.S. was very unlikely to reconsider anytime soon. And so Japan shifted gears, advocating for an 11-nation TPP and waiting for America to join sometime down the line.
However, the other signatory nations have diverse reasons for joining the TPP -- reasons that may not dovetail neatly with Japan's.
Australia and New Zealand are keen to boost agricultural product exports to Japan and other TPP countries, and so look ready to move forward without the U.S. Vietnam and Malaysia, on the other hand, appear more reluctant, as they had been looking forward specifically to expanded exports of textiles and other goods to the U.S. market. Meanwhile, Peru and Chile hope China will take the U.S.'s empty seat at the TPP table.
Each signatory country is in a different situation. However, implementing the concrete, high-level trade rules specified under the TPP would likely benefit all the parties in their own way.
In addition to liberalizing trade and investment across the region, the TPP's scope also includes standardized rules on e-commerce, protecting intellectual property rights, and many other areas. Even taking into account the significant downside of the U.S.'s departure, there remain a great many positive points in the TPP's favor.
Meanwhile, the Trump administration has turned its back on multilateral trade negotiations in favor of bilateral talks -- a strategy aimed at extracting concessions that benefit the U.S. economy. However, if a multilateral free trade area without the U.S. goes into effect, it could serve as a shield against protectionist pressure from Washington.
It is also possible that, if the U.S. is left on the outside looking in, and is clearly missing out on all the benefits of a fully operational TPP, the American people will demand their country join the pact after all. Indeed, we would like to see the TPP used as a lever to get the U.S. to return to a multilateral trade framework.
Representatives of the remaining 11 TPP nations, who gathered in Toronto for a two-day summit in early May, will meet again in Hanoi later this month. Japan's economy is the largest among them. Thus, we hope that Japan will take a leading role at the talks and help the other nations understand the TPP's true meaning and value. At the same time, Japan should work vigorously to bring the U.S. back into the fold.
If a U.S.-less TPP does go into effect, the Japanese government will have to get Diet approval for the treaty once more, as its content is likely to be quite different from the original version passed in December 2016. We call on the government to give the Japanese people a clear and comprehensive picture of its vision for the TPP's future.