Tokyo sees US trade proposal as undermining its own CPTPP efforts

Joe Biden is expected to receive a warm welcome when he arrives in Japan later this month for the first time as US president, although the reception for his new economic integration plan is likely to be far chillier.

Biden’s visit will coincide with the launch of the Indo-Pacific Economic Framework (IPEF), which is part of the Biden administration’s efforts to counter China’s clout in Asia.

The new initiative comes after the US withdrawal from talks on the Trans-Pacific Partnership (TPP) regional trade agreement under his predecessor as president, Donald Trump.

Biden is set to make the announcement during his first visit to allies South Korea and Japan since taking office, which will run from May 20-24.

While the US sees the IPEF as a complementary economic pact, Japan perceives it undermining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Tokyo worked to develop after the 2017 withdrawal of the United States from its predecessor, the TPP.

Two former ministers, who remain key members of Japan’s ruling Liberal Democratic Party, said Tokyo was deeply uneasy with the US proposal.

Speaking at the Brookings Institution in Washington last week, former foreign minister Taro Kono and ex-justice minister Takashi Yamashita said Japan had made deep concessions to ensure the TPP could be signed in February 2016 by the original 11 Pacific Rim nations – only for Trump to walk away less than a year later.

Kono said: “Now the Biden administration is talking about the Indo-Pacific economic whatever, I would say forget about it.”

Yamashita added that with the new pact having the option for the US to ignore any parts of the framework that it disagreed with – such as carbon emissions or trade regulations – it would make the IPEF weak and only serve to make governments in the region question Washington’s commitment to its own plan.

The original TPP set such high standards on a number of metrics that were important to Tokyo and Washington, including labour standards, environmental protection and intellectual property rights, that China would be effectively excluded from the agreement, Kono added.

And while that ambition was never explicitly declared as an aim of the alliance, it aligned with broader US and Japanese foreign policy in isolating Beijing as it became an economic and military rival in the region.

Both Kono and Yamashita said the optimum solution would be for the US to change tack and sign up for the revised CPTPP. But analysts say that an administration that appears more beleaguered by the week will not be able to reverse that course.

“There is not a snowball in hell’s chance that Biden will be able to get anything through Congress to rejoin the CPTPP,” said Jeff Kingston, director of Asian Studies at the Tokyo campus of Temple University.

The IPEF did not appear to be “a direct rival” to the CPTPP, he added, although “there is some concern about what it actually entails as some of the concepts are still quite vague”.

While details of the new framework remain unclear, it is not expected to involve reductions in tariffs. The framework has already been criticised by senators from both parties in the US as too narrow to achieve its objectives.

Many East Asian nations that the US expects to sign up may be reluctant as they fear being caught between Washington and Beijing, since China is for many their primary trade partner.

For Japan, Trump’s withdrawal from the TPP had left a bruise,

Kingston added. “Japan put a lot of effort into the agreement and getting it right, and then he pulled the plug,” he said. “That left a bad feeling about the US as an ally of Japan.”

Tokyo took the leading role in the successor agreement, whose 11 signatory nations have combined economies representing 13.4 per cent of global gross domestic product.

Other governments are in the process of joining the pact, with mainland China, Taiwan and Ecuador all submitting formal membership applications and Great Britain – despite its geographical distance from Asia-Pacific – also moving onto the second phase of negotiations.

South Korea has commenced application procedures while Thailand, the Philippines, Indonesia and Colombia have also announced their intention to join.

For Tokyo, the application from Beijing for membership is a cause for concern and Prime Minister Fumio Kishida is likely to make the point to President Biden that should Beijing be admitted, it may very well have sufficient influence to assume the leadership of the bloc, which would completely undermine the original intention of the alliance and permit Beijing to set trade and investment rules that serves its needs.

The most effective way to nullify that threat, Kishida will say, would be for the US to return.

“Japan is feeling anxious, and it is clear why,” said Hiromi Murakami, a professor of political science at Temple University.

“Tokyo worked so hard for TPP to be a success and then had to take on the leadership role for CPTPP to work. I think they are asking themselves what are the differences between CPTPP and IPEF and why the US needs to introduce this new plan now.”

“I can see that it makes sense to the US to have its own trade agreements and why they want Japan to join them, but this will only serve to diminish TPP and everything that Japan has done,” she said.