Multilateral Trade Pact May Pivot on U.S.-Japan Battles


Representatives from nations involved in the proposed Trans-Pacific Partnership (TPP) free trade agreement (FTA) are scheduled to begin talks in Brunei by week’s end to advance the initiative. But Japanese practices labeled as protectionist by the United States may provide the first significant speed bump for the TPP, something several members feared prior to Japan’s involvement in negotiations.

Officials from several nations involved in the TPP publicly set a goal to finalize an agreement by the end of this year. It would be an understatement to call the goal optimistic given concerns of the two biggest economies involved. Two of the key areas where the U.S. and Japan continue to disagree, including during a bilateral pre-TPP meeting between the two parties earlier this week, are access to the automotive and, especially, agriculture industries. The latter’s lobby in Japan is among the strongest, and professes that its farmers would be decimated if they had to compete with American farmers with newfound open access. Granted, some believe the agriculture issue might be a fight the U.S. doesn’t even want. Rather, it could be a bargaining chip and an effort to garner deeper concessions in other areas like automotive, insurance or retail.

Either way, few experts expect the talks to be smooth due to these issues, which is why some original TPP members objected to including Japan at all, despite the value and perceived opportunity of its economy.

The TPP represents a greater interest from developed economies in the "Pivot to Asia" in the southeast part of the continent. The pact would also include emerging economies like Vietnam, Singapore and Malaysia, as well as Peru, Chile, New Zealand and Australia. Mexico and Canada also have been invited to take part in the negotiations.

- Brian Shappell, CBA, CICP, NACM staff writer

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