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e-Magazine (For the Japanese version of this article)

New Series: Understanding Japan through Key Words The Trans-Pacific Partnership Negotiations (TPP) [Date of Issue: 30/June/2014 No.0232-0935]

Date of Issue: 30/June/2014

New Series: Understanding Japan through Key Words
The Trans-Pacific Partnership Negotiations (TPP)

The Trans-Pacific Partnership (TPP) negotiations which began in 2010 are working toward a wide-area free trade agreement among 12 countries around the Pacific Ocean, including Japan, the US, Canada, Mexico, Australia and Malaysia. Prime Minister Shinzo Abe announced Japan's participation in the negotiations in March 2013, with Japan officially taking a seat at the table in July.

In economic scale, the 12 TPP countries account for approximately 40 percent of the world economy and over 30 percent of world trade. The average per capita gross domestic product across all 12 countries is US$35,000 (as at 2011), well above the world average of around US$10,000. Should the agreement enter into force, it will create a massive economic zone.

Japan boasts the third largest economy in the world but, faced with a falling population and an aging society, its status is clearly in decline compared to the other rapidly growing Asian nations. Akira Amari, the minister in charge of Japan's TPP negotiations, has explained that Japan's purpose in joining the negotiations is to feed Asia-Pacific growth into the Japanese economy.

The TPP is not simply about member countries mutually reducing or eliminating tariffs on goods and opening their markets. It also sets out to create common rules for the non-tariff areas of investment and competition policy, intellectual property rights and government procurement so as to facilitate companies' cross-border operations. In total there are 21 areas of negotiation, including simplification of trade procedures and the introduction of a dispute resolution system.

As a "21st-century agreement", it also aims to balance trade and investment promotion with protection of the environment. Another particular feature is the emphasis on TPP members sharing common ground on a wide range of areas such as preventing an over-priority on economic efficiency from pulling down labor standards.

While ministers and negotiators have gathered in the same room at some points in the negotiations, the complex interests involved have made it difficult to reach consensus. Consequently, the process has primarily been one of bilateral negotiations on individual issues at negotiator level. Those results are then reflected in negotiations with other countries, with the plan being culmination in consensus across all member countries.

The negotiations were supposed to be concluded in 2013 but stalled due to the failure to resolve differences, and bilateral consultations between Japan and the US are felt to be critical to breaking this deadlock. The two countries between them account for around 80 percent of the economic scale of all TPP members, which is why the direction of their consultations is viewed as having the power to determine the direction of the negotiations as a whole.

The impasse in negotiations between Japan and the US focuses on five products which are particularly sensitive for Japanese agriculture: rice, wheat, dairy, sugar, and beef and pork products. The Diet agricultural committees in both Upper and Lower Houses have both passed resolutions calling on the government to maintain tariffs on these five key items, and Prime Minister Abe has reiterated that he will respect their position.

Under pressure from livestock producers and other groups, the US too continues to insist on complete tariff elimination. With mid-term elections coming up in November, the Obama administration has little room to compromise. Chief negotiators, the working level highest-ranking officials, will meet in July, but whether Japan and the US will reach a compromise that expedites the way to conclusion of the negotiations still remains a wide-open question. Many analysts are predicting that negotiations could drag on indefinitely.

(original article : Japanese)

*This article was written by a specialist journalist.
(For the Japanese version of this article)


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