The Trans-Pacific Partnership (TPP) trade agreement is expected to remain a priority for Japan despite the country’s latest agreement on a free trade pact with the European Union, says a regional trade analyst.
TPP expected to remain a priority despite EU trade agreement
Stephen Olson, a Research Fellow at the Hong Kong-based Hinrich Foundation, said this was because the Japan-EU free trade agreement (FTA), signed ahead of the G20 summit earlier this month, was not necessarily an indication of any lessened commitment on Japan’s part to the TPP.
“The proposed Japan-EU FTA might be more reflective of Japan’s desire to see continued progress on regional or plurilateral trade agreements – especially with partners who are likely to favour ‘higher quality’ agreements,” he told Asian Correspondent on Wednesday.
According to Olson, with the US seemingly no longer interested in playing its traditional role in propelling a global trade liberalisation agenda, Japan might feel the need to “step up” and play a more proactive role in keeping the forward momentum going.
Japan and the EU agreed on the FTA to create the world’s biggest open economic area in a signal of resistance to what they see as United States President Donald Trump’s protectionist turn.
Concluded in Brussels on the eve of meetings with Trump at a summit in Hamburg earlier this month, the “political agreement” between Japan and the EU accounts for a third of global GDP and is heavy with symbolism.
Some areas of negotiation were still being ironed out, but officials insist the key snags have been overcome.
Japan’s Prime Minister Shinzo Abe said with the deal, Japan and the EU are demonstrating their strong political will to fly the flag for free trade against a shift toward protectionism.
Abe said the “win-win” deal was “a strong message to the world”, according to Reuters.
In the works for four years, it has been pushed over the line towards a likely signing in the coming months by the election of Trump and his moves to ditch the Pacific trade pact that included Japan and leave talks with the EU in limbo.
Despite the Japan-EU FTA, Olson maintained the prospect of a TPP without the US remained optimistic as Japan has been a strong advocate of moving forward on the matter.
“Keep in mind there are still a lot of details to be worked out and points to be negotiated, so we should not regard it (Japan-EU FTA) as a ‘done deal’,” he said.
On Tuesday, Malaysia’s International Trade and Industry Minister Mustapa Mohamed said talks on the TPP were still ongoing and were likely to see a conclusion in November during the Asia- Pacific Economic Cooperation (Apec) meeting in Manila.
Mustapa was quoted by Bernama (via The Star) as saying the Southeast Asian country – which was among the 11 remaining TPP members aiming to proceed with the trade pact – remained open to proposals raised by other participating countries.
However, the minister said Malaysia’s focus was on the Regional Comprehensive Economic Partnership, which could possibly be finalised early next year “with Australia, China, India, Japan, New Zealand and South Korea as well as Asean countries as the main driver.”
Trump’s move to withdraw his country from the TPP has left some of the remaining 11-member states, led by Japan and New Zealand, scrambling to push on with the deal in US’ absence.
But as the TPP signatories work on possibly salvaging the agreement – they’ve given themselves until November to decide – questions have been raised about the viability of keeping the deal alive.
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