[At a meeting in Hakone, a resort town south of Tokyo, Japan led trade negotiators from the 11 countries — including Australia, Canada, Malaysia and Vietnam — in discussions about reviving rules that would improve labor conditions and increase protections for intellectual property in some countries, while opening more markets to free trade in agricultural products and digital services around the region.]
By
Motoko Rich
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Prime
Minister Shinzo Abe of Japan and President Trump at the Group of 20 summit
meeting
in Hamburg, Germany, last week. Mr. Trump pulled the United States
out
of the Trans-Pacific Partnership, a proposed free-trade agreement with
Japan
and 10 other countries, on his first full weekday in office.
Credit
Stephen Crowley/The New York Times
|
TOKYO
— When President Trump
pulled out of his predecessor’s signature trade deal on his first full weekday
in office, the 11 other countries that had negotiated the pact were left
wondering if years of work had just gone down the drain.
This week, those countries indicated that
they wanted to press ahead with the so-called Trans-Pacific Partnership, or
TPP, a sweeping multinational trade agreement that had originally been sold as
a way to tether the United States more closely to East Asia and to create an
economic bloc capable of standing against an increasingly muscular China.
At a meeting in Hakone, a resort town south
of Tokyo, Japan led trade negotiators from the 11 countries — including
Australia, Canada, Malaysia and Vietnam — in discussions about reviving rules
that would improve labor conditions and increase protections for intellectual
property in some countries, while opening more markets to free trade in
agricultural products and digital services around the region.
Japan’s effort to salvage the deal reflects a
growing recognition that countries that have previously counted on American
leadership will have to forge ahead on their own.
In Japan, officials are particularly eager to
pre-empt China’s attempt to forge a rival trade pact, the Regional
Comprehensive Economic Partnership. That deal would bring together 16
countries, including the ones in the TPP, albeit under considerably less
stringent rules.
Kazuyoshi Umemoto, Japan’s chief negotiator, told
reporters that the group of 11 “achieved mutual understanding on a path
forward” without the United States.
“We need a new international agreement,” Mr.
Umemoto said. “I think we have reached a rough picture of what it will be
like.”
Momentum for such deals has built in recent
weeks, as big American allies have pledged their commitment to globalization.
On the eve of the Group of 20 summit meeting
in Hamburg, Germany, last week, Japan and the European Union announced the
outlines of a broad agreement that would create a trading bloc encompassing $20
trillion in combined economic output. The deal was announced as the United
States appeared increasingly isolated on issues like free trade and the
environment.
President Trump has repeatedly made clear his
antipathy toward free trade, vowing to protect American workers and rebalance
trade deficits with other countries. On Wednesday, the United States trade
representative, Robert E. Lighthizer, sent a letter to the South Korean
government saying that the administration was eager to revise a trade agreement
between the two countries that has been in force for five years.
If Japan and the 10 other signatories are to
keep the TPP alive, they would need, at the very least, to revise a clause that
says the deal will come into effect only when ratified by six countries
representing 85 percent of the combined economic value of the 12 original
members. Without the United States, that threshold cannot be reached.
Japan, which has the largest economy among
the remaining trade partners, is pushing to preserve most of the ambitious
rules that negotiators originally hammered out, as are Australia and New
Zealand.
“The hope, of course, of Japan is to maintain
the status quo of the already agreed framework, including the details,” said
Tomohiko Taniguchi, a foreign policy adviser to Prime Minister Shinzo Abe.
While optimistic that Japan could lead the
group toward consensus, Mr. Taniguchi, who referred to the remaining TPP
countries as the “Ocean’s 11,” acknowledged that the discussions would be
challenging.
“Negotiations, once started, could turn in
all sorts of different directions,” he said. “It’s a gathering of 11, after
all, self-centered, even selfish countries. All sorts of negotiations are
likely happening.”
Developing countries such as Malaysia and
Vietnam may want to renegotiate some of the tougher requirements that they
accepted in exchange for the promise of access to American markets.
The agreement, for example, requires
developing nations to reform child-labor laws as well as to improve the
transparency of state-owned companies, and it permits drug makers in the large
economies to extend patent protection on many pharmaceuticals that the smaller
countries want to manufacture. Some of the developing countries may protest
that such requirements are too onerous without the incentive of being able to
export to American consumers.
“The problem is, when you take the United
States out, the United States is two-thirds of the TPP,” said Jeffrey Wilson, a
research fellow at the Perth U.S.-Asia Center at the University of Western
Australia. For developing countries being asked to make expensive overhauls,
Mr. Wilson said, “What is the point of the deal anymore?”
Japan’s goal is to preserve as much of the
original deal as possible in the hope that the United States will eventually
rejoin.
“We should welcome the United States when the
United States decides to come back at some time in the future,” said Ichiro
Fujisaki, a former Japanese ambassador to Washington.
Some observers see those hopes as naïve. “I
think it’s simply wishful thinking that the Trump administration will change
its mind about the TPP,” said Takuji Okubo, managing director and chief
economist at Japan Macro Advisors. “So long as he remains the president, I
don’t think he will actually make that turnaround.”
Others suggested that advisers to Mr. Trump
might try to change his mind once he sees how difficult it can be to negotiate
bilateral trade agreements. But in that case, they say, the 11 remaining
countries should not alter the TPP.
“If they try to renegotiate the rules or
lower the standards, it will make it harder for the U.S. to rejoin the
agreement down the road,” said Bruce H. Andrews, deputy secretary of the
Commerce Department in the Obama administration and now a managing director at
Rock Creek Global Advisors, a consulting firm.
And there is another reason the TPP countries
should maintain the tough trade rules, Mr. Andrews said: to push China toward
reform.
“If TPP had gone into force, the Chinese, by
necessity, would eventually have wanted to be part of it to enjoy its
benefits,” Mr. Andrews said. “In order to get into TPP, China would have had to
do some serious economic reform and open their market from their current closed
state. If TPP does not go forward as the model, China will likely get better
terms from other countries without having to open its market.”
In Japan, Mr. Abe has his own political
reasons for wanting to push ahead with the TPP. Mr. Abe expended considerable
political capital for the deal, going up against farmers who have traditionally
supported his Liberal Democratic Party. The agreement would require Japan’s
closed agricultural sector to accept imports of rice, pork and other products.
Mr. Abe has also recently been dogged by
influence-peddling scandals, and his party suffered a resounding defeat in a
recent local election in Tokyo. By agreeing to the trade deal with the European
Union last week, he was able to score a quick victory.
“I think it’s important to keep that
momentum,” said Jun Saito, a senior research fellow at the Japan Center for
Economic Research.
Japan has indicated that it wants to secure
an agreement between the remaining 11 countries in the Trans-Pacific Partnership
by November, when many of them will gather at a summit meeting in Vietnam.
Most analysts say any agreement is unlikely
to be completed that quickly. Still, said Shumpei Takemori, a professor of
economics at Keio University, the reopening of negotiations allows Japan and
its allies to “show the U.S. administration that we have alternatives.”
Follow Motoko Rich on Twitter @MotokoRich.
Makiko Inoue contributed reporting.
