News Analysis: Japan's protectionist stance aims to rewrite TPP rules for economic gain
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E-mail Xinhua, February 27, 2014
The 12 countries involved in the U.S. -led Trans-Pacific Partnership (TPP) free trade talks have made little progress in reaching a pact in the latest round of ministerial talks, with the spotlight focused very much on Japan and its reluctance to alleviate tariffs on what it deems to be its "sacred sectors."
Analysts here said there was a modicum of hope that some headway would've been made by Akira Amari, minister in charge of the TPP talks, during deliberations through Tuesday in Singapore, but Japan's chief negotiator left the talks as he entered them, adamant that Japan would not budge on its sensitive sectors.
Amari remarked after the talks that good progress had been made with the other TPP nations, including the United States, and said that all members will continue to work towards reaching a comprehensive, high-standard agreement and denied that the delicate talks had become unsalvageable.
But despite the top negotiator's positive spin on the situation, experts believe that the gulf between Tokyo and Washington is widening, specifically on Tokyo's refusal to give ground on its five sacred sectors including rice, beef, pork, dairy, wheat and sugar and Washington's demands for full access to Japanese markets for its agricultural goods.
Also adding to the deepening rift between the two largest economies involved in the TPP talks is Washington's insistence that Japan eliminates some technical barriers that prevent the sales of some U.S. cars in Japan, while maintaining tariffs on Japanese automobile imports.
Experts believe that the failure of the ministers to strike a deal in the latest round of talks, with the total process supposed to have been concluded last year, and the fact that a date for the next round of talks has not been set, with no ultimate deadline yet on the horizon, does not bode well for the free trade deal.
"The ministers said in a joint statement that further strides towards a final agreement had been made, but the evidence speaks to the contrary," veteran Pacific affairs researcher Laurent Sinclair told Xinhua.
"Japan went into the latest round of talks not with the intention of negotiating to move the process forward, but to specifically let it be known that it will not compromise on safeguarding its national interests,"he said.
Sinclair added that the talks have become highly politicized both in Tokyo and Washington as the Obama administration plans to get congressional approval for the TPP agreement before the midterm elections, and believed that U.S. President Barack Obama' s visit to Japan in April will provide little or no resolution to the stalled talks, despite Japanese Prime Minister Shinzo Abe stating that an early conclusion to the deal would be in Japan's best interests and that negotiations are nearing the final phase.
However analysts have highlighted the fact that Abe is under immense pressure from farm lobbies, such as the politically powerful Central Union of Agricultural Cooperatives, to uphold tariffs on its sensitive sectors, which in the case of rice sees tariffs of more than 700 percent slapped on foreign imports to protect the age-old sector from cheaper overseas competition.
Japan's farm minister Yoshimasa Hayashi has campaigned vehemently to protect the nation's agricultural sector and is among a number of politicians and bureaucrats, from whom Abe derives a great deal of political support, who believe the issue of eliminating tariffs would, at a bare minimum, be a constitutional quagmire, with Hayashi stating that Japan's stance on the matter has already been "enshrined" in a parliamentary resolution.
A consensus growing among some sources closely connected to the issue is that Japan's reluctance to ease the talks forward by making some concessions on its tariffs, and Abe stating at a Lower House budget committee meeting Thursday that setting a deadline for the conclusion of TPP talks could allow other countries to take "unfair advantage" of Japan and harm national interests, is something of a ploy by Japan to rewrite the TPP's original ideology.
"The potential for this deal is huge as in theory the TPP countries together could end up accounting for almost 40 percent of global gross domestic product and about one-third of all world trade and Japan is under no illusions about the scope and potential of this deal," Philip McNeil, an author and commentator on Japanese politics told Xinhua.
"As the second largest economy involved in the deal, Tokyo and Washington both know they have a lot of clout over smaller countries. What we might see emerge is Tokyo and Washington browbeating smaller TPP members to serve their economic needs, while jointly stalling on concessions expected as per the TPP's original manifesto, to secure current and future national and economic interests," McNeil said.
He added that the size and political power of the TPP members directly correlated to how much a member country could subvert the deal for their own gains, while maintaining a protectionist stance on certain tariffs for political or economic reason, or likely both.
Other member countries have previously stated that Japan has failed to live up to the "high ambition" of the TPP, as was originally outlined in the 2011 Honolulu Declaration, at which U.S. President Barack Obama and other leaders pledged a complete elimination of tariffs and flexibility on the matter from all member countries.
But some analysts believe that going forward Japan may not abide by the overall principle to scrap all tariffs within 10 years, but look to phase out tariffs on their own terms over a longer period of time, to keep the pact moving forward, while protecting its own interests -- a move widely in contravention of the original TPP tenet.
"With Japan and the U.S. at loggerheads over automobiles and agriculture, as well as some other issues, it makes sense for deals between the two be "attempted" over an unspecified period of time on a bilateral basis, while the expectation on smaller member countries to fall in line be maintained within the original timeframe," Sinclair said.
"If such a scenario manifests, as seems to be the case, then the two biggest economies involved in the TPP will be able to protect their national (economic) and political concerns, while reaping the benefits from other TPP members towing the line as originally outlined. This seems to be the strategy and for Japan' s part this limits the fallout from lifting tariffs on its sensitive sectors, but ensures it is well-placed to reap the benefits from smaller countries in more economic need of being a part of a free trade alliance in the Pacific area," he said. Endi
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