Ja­pan OKs Pa­cific trade pact that Trump plans to dump

Kuwait Times - - BUSINESS -

Ja­panese Prime Min­is­ter Shinzo Abe won par­lia­men­tary ap­proval Fri­day for rat­i­fi­ca­tion of the Trans-Pa­cific Part­ner­ship, de­spite US Pres­i­dent-elect Don­ald Trump’s plan to with­draw from the 12-na­tion trade pact.

Up­per house law­mak­ers ap­proved the TPP on Fri­day, heed­ing Abe’s calls to push ahead with it de­spite Trump’s re­jec­tion of the free-trade ini­tia­tive cham­pi­oned by Pres­i­dent Barack Obama.

Abe’s rul­ing Lib­eral Demo­cratic Party has an am­ple ma­jor­ity in both houses of par­lia­ment. Rat­i­fi­ca­tion of needed reg­u­la­tory re­vi­sions by the Cab­i­net is ex­pected soon.

The mar­ket open­ing mea­sures re­quired by the trade pact are seen as a way for Abe to push through dif­fi­cult re­forms of the agri­cul­tural and health sec­tors. So far, Abe has made scant progress on a slew of changes he has pro­posed to help im­prove Ja­pan’s lag­ging pro­duc­tiv­ity and com­pet­i­tive­ness.

Trump has vowed to take steps to exit the pact right af­ter he takes of­fice. A US with­drawal would kill the trade pact un­less its terms are re­vised. The agree­ment be­tween the dozen mem­bers re­quires both the US and Ja­pan to join to at­tain the re­quired 85 per­cent of the group’s to­tal GDP since the US econ­omy ac­counts for 60 per­cent of that to­tal, and Ja­pan less than 20 per­cent.

Af­ter ex­pend­ing po­lit­i­cal cap­i­tal to fight vested in­ter­ests fear­ful of mar­ket open­ing and re­forms likely to be re­quired by the trade pact, Abe and other lead­ers in Asia have be­moaned the im­pend­ing loss of the US as TPP flag bearer. —AP

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