Ocean of differences keep U.S. and Japan apart at trade talks

The Trans-Pacific Partnership negotiations may be heading for the same bargaining purgatory as the Doha Round of the World Trade Organization, in which discussions are eternal and the resolution of disagreements will always come tomorrow.

Farmers harvest rice in Japan. Japanese Prime Minister Shinzo Abe faces heavy political pressure to preserve about 500 import tariffs on agricultural products | kazoka

The Trans-Pacific Partnership negotiations may be heading for the same bargaining purgatory as the Doha Round of the World Trade Organization, in which discussions are eternal and the resolution of disagreements will always come tomorrow.

Whether the 12 TPP countries, including Canada, can avoid this hellish fate may be seen later this week when the trade ministers are due to meet in Sydney, Australia. However, most of the 12, from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, are only bystanders at this stage of the negotiations, which began in 2005.

Whether the 12 TPP countries, including Canada, can avoid this hellish fate may be seen later this week when the trade ministers are due to meet in Sydney, Australia. However, most of the 12, from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam, are only bystanders at this stage of the negotiations, which began in 2005.

The outcome of what is conceived as the globe’s most far-reaching free-trade agreement, covering everything from agriculture to intellectual property, depends on domestic politics in the U.S. and Japan, and resolution of sharp divisions between Washington and Tokyo.

It is already clear that neither of those hurdles will be overcome before the end of November, the deadline set for completion of the TPP negotiations. A new, tentative deadline of the end of the year is being talked about, but even that is probably overly optimistic.

The basic timing problem facing the TPP is that U.S. President Barack Obama does not have what is known as “fast track authority” from Congress. This would allow the administration to negotiate a TPP treaty and then put it to Congress for a yes or no vote. Without that authority, individual members of Congress can insert parochial amendments that would change and distort the entire package.

No would-be U.S. trade partner is going to make an agreement with Washington’s negotiators unless the president has fast-track powers. But Obama is not going to get it from this Congress, at least not until after November’s mid-term elections, and perhaps not even then, as U.S. politics enter the cycle before the 2016 presidential and congressional votes.

Even Democratic members of Congress are suspicious about the TPP as they look at the outcome of the 2012 free trade agreement with South Korea, for which Obama did have fast-track authority. The U.S. trade deficit with South Korea has gone up nearly 40% since that agreement came into force.

The domestic political ground for the TPP in Japan is no more fertile. Prime Minister Shinzo Abe strode to power at the end of 2012 with a mandate to radically restructure Japan’s stagnant economy. But the government’s approval rating has taken a sharp downturn as Abe has used some of his political currency on the unpopular weakening of Japan’s pacifist constitution.

With a slew of regional, municipal and nation elections in the offing, Abe is under massive political pressure to court Japan’s agricultural community, whose numbers are small and shrinking, but whose votes elect far more parliamentarians than their urban counterparts.

So Abe’s TPP negotiators have made it clear they want to keep about 500 import tariffs on pork, beef, wheat, rice and dairy products.

Back in the U.S., the National Pork Producers Council agreed in 2012 to forego the immediate ending of tariffs with South Korea in order to get the whole deal signed. The council is not prepared to again give up its interests for the sake of the TPP agreement. And at the same time, U.S. auto manufacturers are not willing to accept the elimination of the 20% import tariff on cars. They want it phased out over 20 years, which the Japanese cannot accept.

If, by some magic, these politically sacred issues between Japan and the U.S. are overcome, it will only pull into sharp focus other unresolved sectors involving many more of the 12 TPP parties, such as intellectual property protection and copyright. •

Jonathan Manthorpe (jonathan.manthorpe@gmail.com) has been an international affairs columnist for nearly 40 years.