It’s time Ja­pan stopped dream­ing TPP

China Daily (Hong Kong) - - COMMENT -

Ne­go­tia­tors from the 11 re­main­ing mem­bers of the Trans-Pa­cific Part­ner­ship agree­ment held a meet­ing in Ja­pan’s hot-spring re­sort town of Hakone last week where they de­cided to push ahead with the agree­ment with­out any sig­nif­i­cant changes.

The two-day meet­ing shows some coun­tries, es­pe­cially Ja­pan, are des­per­ate to re­vive the TPP af­ter US Pres­i­dent Don­ald Trump pulled out of it in Jan­uary. But, sooner or later, Ja­pan will re­al­ize it has set out on mis­sion im­pos­si­ble be­cause with­out ma­jor re­vi­sions, the pact may re­main good only on pa­per.

In its present state, the TPP agree­ment can come into force only af­ter be­ing rat­i­fied by at least six coun­tries which to­gether ac­count for at least 85 per­cent of the bloc’s GDP. Given that among the orig­i­nal mem­bers, the US alone accounts for more than 60 per­cent of the GDP, en­forc­ing the TPP agree­ment with­out mod­i­fi­ca­tions is im­pos­si­ble.

But last week’s meet­ing and the one among chief ne­go­tia­tors in Toronto, Canada, in May both stopped short of propos­ing ma­jor changes. Per­haps Ja­pan be­lieves that by ef­fect­ing only mi­nor changes it can still lure the US back into the TPP.

But since Trump still prefers bi­lat­eral trade deals and sticks to his “Amer­ica First” credo, there is no rea­son to be­lieve the US will make an­other U-turn.

Un­like Trump, how­ever, Ja­panese Prime Min­is­ter Shinzo Abe has de­vel­oped a pen­chant for mul­ti­lat­eral trade ar­range­ments. On July 6, Ja­pan and the Euro­pean Union an­nounced they had reached con­sen­sus on a Ja­pan-EU Eco­nomic Part­ner­ship Agree­ment. Abe called it “a model for 21st cen­tury eco­nomic or­der”.

Con­sid­er­ing that Ja­pan has vowed to in­crease its ex­ports un­der free trade deals to ac­count for 70 per­cent of its over­all ex­port vol­ume in 2018, Abe is also look­ing to the TPP and Re­gional Com­pre­hen­sive Eco­nomic Part­ner­ship, along with the out­line free trade deal with the EU, to ful­fill his eco­nomic goal.

How­ever, com­pared with eco­nomic fac­tors, po­lit­i­cal con­cerns play a larger role in Ja­pan’s en­deavor to re­vive the TPP. In fact, po­lit­i­cal cal­cu­la­tions in the TPP have far out­weighed its eco­nomic ob­jec­tives, as ma­jor economies such as China and In­dia were de­lib­er­ately kept out of it to en­able the US to re­gain its wan­ing global in­flu­ence. And ever since China over­took Ja­pan to be­come the world’s sec­ond-largest econ­omy in 2011, Tokyo’s am­bi­tion to play a big­ger role on re­gional and global plat­forms has grown by the day.

Given these facts, it is no sur­prise that Ja­pan is des­per­ate to use the TPP to widen its in­flu­ence in the re­gion, be­cause once the TPP agree­ment comes into ef­fect, Ja­pan would be one step closer to achiev­ing its goal of writ­ing the global eco­nomic rules. Be­sides, con­sid­er­ing the icy Bei­jing-Tokyo re­la­tions in re­cent years, Ja­pan could also use the TPP card to con­tain China’s eco­nomic in­flu­ence in the re­gion.

This also ex­plains why Ja­pan has been in­sist­ing the TPP agree­ment be used as a model for the RCEP, in to­tal dis­re­gard of the huge dif­fer­ences in the eco­nomic lev­els of par­tic­i­pat­ing coun­tries and the fact that the RCEP is a broader free trade ar­range­ment cover- ing more economies in the Asia-Pa­cific than the TPP.

Need­less to say, Ja­pan’s stance has markedly slowed down the RCEP process. China has al­ways sup­ported in­clu­sive and open mul­ti­lat­eral eco­nomic ar­range­ments, be­cause the ex­clu­sive­ness and over­lap­ping na­ture of some ex­ist­ing mul­ti­lat­eral trade mech­a­nisms are to blame for im­bal­anced glob­al­iza­tion.

As an ad­vo­cate of bal­anced glob­al­iza­tion, China has ac­tively pushed for ne­go­ti­a­tions on the RCEP, which in­volves 16 coun­tries in­clud­ing Ja­pan. And as the world’s third-largest econ­omy, Ja­pan needs to make the right choice and fol­low the trend of the times.

By re­fus­ing to change its con­fronta­tional mind­set, Ja­pan will lose (as well as make other coun­tries lose) the op­por­tu­ni­ties pre­sented by more in­clu­sive re­gional eco­nomic ar­range­ments such as the RCEP. It’s time Ja­pan woke up from its TPP dream.

The au­thor is a se­nior writer with China Daily. wanghui@chi­

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