Expectations in the wake of new TPP talks
- By Yang Panpan and Wang Yaqi
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E-mail China.org.cn, March 18, 2014
The Trans-Pacific Partnership (TPP) concluded its latest round of ministerial talks in Singapore in late February, leaving all interested parties concerned about what to expect. Earlier, at the end of last year, discords on market access, reform of state-owned enterprises and intellectual property rights made the effort fruitless.
The Singapore talks marked the first round of such meetings in 2014 and naturally, saw intensive high-level U.S.-Japan preparatory negotiations in a bid to pave the way. But disputes over tariffs on farm produce and automobiles still prevented Tokyo and Washington from reaching substantial agreements. Meanwhile, the United States is facing domestic pressure to assume "quick" authority, leaving other TPP members disturbed.
Due to these uncertainties, there were reservations as to whether the talks would produce any major breakthroughs. The result of the talks was large, predictable differences among the countries involved, especially between the United States and Japan.
Judging from the present progress, the TPP is unlikely to finish its bilateral negotiations in the first half of this year, but its development is likely to center on three aspects.
Concern 1: Differences between the United States and Japan
How Washington and Tokyo would solve their differences was already a focus at the Singapore talks. But like the previous round, trade representatives from both countries repeated their "tit for tat" disputes.
From the U.S. point of view, Japan has not compromised enough to bring down tariffs on farm produce, especially on rice, wheat, beef and pork. Japan's tough stance on farm produce tariffs was even considered a "primary challenge" in the U.S.-TPP bilateral talks. Wendy Cutler, acting deputy U.S. trade representative (USTR), also criticized Japan's protectionism, saying excluding sensitive farm produce from the talks was not consistent with the original objective of the TPP.
But on the other side of the Pacific, Japan said that the U.S. attitude to the automotive trade is the key to a consensus. Japan has required the United States several times to clarify when it will abolish its tariff on imported automobiles.
The two sides have agreed to hold TPP bilateral negotiations in April, in a particular bid to solve issues on imported automobiles, access to insurance market, as well as other non-tariff barrier questions. But there is little hope that both parties are likely to solve such differences once and for all.
Domestic political pressures, reflected by appeals from interest groups are the fundamental causes of such disputes. Barack Obama is facing mid-term elections, while Shinzo Abe still holds deep determination for economic structural reform in Japan. It seems Japan is more likely to compromise. Once the United States and Japan solve their differences, there will be more chance of fixing the TPP this year.
Despite Japan's willingness to concede, it actually assumed a "do or die" stance during the preliminary stage of TPP talks. Other parties' demands that touched upon Japan's bottom line would force the Asian country to quit talks. Even today, quite a few of people in Japan are still against TPP talks.
The good thing is that TPP does not require all interested parties to reach a universal agreement, meaning that if Japan is unable to reach a deal with others, or even quits talks halfway, other countries will still be able to form a treaty without it.
According to online reports by the Japanese media, the U.S. Trade Representative Michael Froman said this January that the Japanese reluctance to compromise would force the United States to urge all other member states to form an 11-nation TPP deal, which would exclude Japan.
