Japan’s decision to join talks on a trade deal spanning the Pacific marks a major boost for the US bid to shape the new order in Asia, but it will likely mean longer, rockier negotiations.
The US has championed the so-called Trans-Pacific Partnership (TPP) as it chairs a weekend Asia-Pacific summit in Hawaii, part of a drive to show it is active in Asia despite a troubled domestic economy and a rising China.
The move, announced by Japanese Prime Minister Yoshihiko Noda just before he left for Honolulu, leaves China as the conspicuous outlier in the emerging trade deal, which would now encompass more than one-third of the global economy.
US President Barack Obama, who is expected to announce the general outlines of the TPP in Hawaii, hopes that trade will stimulate job growth, which he desperately needs as he seeks re-election next year.
However, the trade pact also has a political dimension. Chinese media have characterized it as a way to isolate the growing power, although a senior Chinese official, Yu Jianhua (俞建華), said in Hawaii that China would consider the pact if invited.
While the US has not explicitly ruled out China, the TPP is deeply controversial in Japan, the world’s third--largest economy. The Central Union of Agricultural Cooperatives has protested that foreign products will swamp traditionally protected farmers.
However, Japan’s political leaders decided that “it is a strategic agreement to ensure that Japan is part of the rule-making process,” said Michael Green, a Japan expert who was a top aide to former US president George W. Bush.
Green, now an academic at the Center for Strategic and International Studies and Georgetown University, said US trade negotiators are likely nervous as they must now contend with a “large and sophisticated and -complicated counterpart.”
“It may complicate the negotiations in the short run by having the third-largest economy entering, but it also makes the TPP a much more credible pillar for an Asia-Pacific-wide free-trade agreement,” he said.
The US has said it wants to move quickly to wrap up the TPP, but many observers believe that the deal will take years — especially now that Japan is involved.
While the US has saluted Japan’s decision to join the talks, a number of US lawmakers and industries are haunted by bruising trade negotiations with the Asian ally in the 1980s.
The American Automotive Policy Council, which represents General Motors, Ford and Chrysler, said that a free-trade agreement with the land of auto giants, such as Toyota, would devastate a recovering Detroit.
“Providing preferential trade benefits to Japan, while they continue to embrace closed-market policies, would only serve to undermine the competitive gains made by American automakers,” said Matt Blunt, the council’s president.
US automakers had initially fought against a US free-trade agreement with South Korea, which was approved last month by the US Congress after marathon talks and concessions to Detroit.
Some analysts believe that South Korea — along with other countries, such as Canada, the Philippines and Thailand — will now feel pressure to enter the TPP to ensure they are not left out.
“My sense is that there is growing momentum behind the TPP, with the potential for a few other countries to join the nine who already engaged in these discussions,” said John Lechleiter, head of pharmaceutical giant Eli Lilly.
Canada, Mexico and at least two other countries have expressed interest in joining the US-led talks, a US lawmaker said on Friday after Japan asked to take part.
“There’s a good deal of momentum for the TPP,” US Representative Kevin Brady said after meetings with members of Obama’s administration at the APEC forum.
They are “what seem to be very solid inquiries from Canada, Mexico and a few others,” Brady said.
Brady said he was told the Philippines and Papua New Guinea also expressed interest in joining the negotiations.
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