As readers may recall, we declared the toxic, national-sovereignty-gutting, misnamed “trade” deal called the TransPacific Partnership to be dead based on America’s colossal mishandling of Japan (not that it has handled the other prospective signatories any better, mind you). The pact was designed to be an “everybody but China” grouping, a centerpiece of Obama’s pivot to Asia. Japan’s participation is essential to meeting that objective, as well as to another critical objective: that of getting major nations to sign up to agreements that subordinated national regulations to the profit-making rights of foreign investors, who could sue governments over any incursions in secretive, conflicted arbitration panels.
Nevertheless, meetings on the TransPacific Partnership continue, with the latest round in Sydney last week. The US press is depicting the Japanese as bad guys who can be browbeaten into giving up protecting their beef and rice farmers, among others. From a Wall Street Journal article titled Japan Market Access Still Hurdle at Trans-Pacific Partnership Talks:
Japan will come under renewed pressure to further open up its automotive and agriculture industries to global trade during Trans-Pacific Partnership talks here over coming days, amid heightened calls for Tokyo to ensure increased market access remains a key plank of its structural reform agenda under Prime Minister Shinzo Abe.
The issue of market access in Japan is critical to the success of the TPP, as it will help determine the full benefits of the pact that will flow to its 12 nation participants, which jointly account for 40% of the global economy…
“Going into this weekend, we’re enjoying a great deal of momentum and focus across the board,” said U.S. trade representative Michael Froman in the opening remarks to the meeting.
“The issues left at the end are often times the most challenging but now is the time to start working through those and finding solutions,” he said, adding talks in recent months had been productive.
Yves here. This reads as if it comes from a parallel universe. “[F]ull benefits of the pact that will flow to the 12 nation participants”? No, the benefits are intended for effectively stateless multinationals that are smart enough to be big US campaign donors, such as the financial services industry, Big Pharma, and tech companies. And as for the “great deal of momentum,” if anything, it has all been in reverse.
But we thought it was possible that we might be missing something, so we checked in with Naked Capitalism’s de facto Japan stringer, commentariat member Clive. His report:
My usual Japanese press diet has downplayed the indications in the WSJ article of the kind of focus on Japanese market access at the current round of TPP negotiations and ministerial meetings between Japan and the US. After reading the WSJ, you’re left with the distinct impression that the U.S. has firmly placed Japan on the naughty step. But after reading Japanese media coverage, I started to wonder if they were reporting the same event. The usually reliable Yomiuri Shimbun has this article from yesterday afternoon, which is short enough to translate easily in full:
(all participating) TPP (countries) Ministerial Meeting Kicks Off … Japan and the United States also Hold (separate) Bilateral Talks
From Miyuki Yoshioka in Sydney
The ministerial meeting negotiations for the Trans-Pacific Economic Partnership Agreement (TPP) kicked off in Sydney on the 25th (of October 2014).
The focus (of the negotiations) will be on the progression of compromises in areas of difficulties such as “the reform of state-owned enterprises” (SOEs) where developed countries and emerging countries are in conflict.
The ministerial talks will take place for three days, lasting until the 27th (of October 2014). Japan’s Minister (for Economic Revitalisation) Amari told reporters prior to the meeting on the morning of the 25th “Because the consultations between Japan and the United States are proceeding vigorously, the other participating countries will be encouraged that they can accelerate their (negotiating) work”. Australia’s (Minister for Trade and Investment Andrew) Robb also announced at the opening (of the talks) “Each (TPP participating country) is heading in the same direction towards a political conclusion, aiming for agreeing the basic elements, with some vigorous negotiating expected between ministerial representatives”.
Clive again… so that’s all, err, very, vigorous then. I’m not sure what the Japanese is for “bun fight” is (I think it’s a Britishism and maybe it doesn’t have an American equivalent !), but that about covers it as a description of the meeting for me. Compare and contrast the Japanese media’s coverage to the WSJ’s. There’s nothing about Japan being taken off to a dark corner of the playground to be given a good kicking by the U.S. apart from a brief reference in the title of the piece that there’s separate U.S./Japan-only talks going on too.
There is the usual (from the Japanese perspective) references to other TPP countries’ areas of discord, especially SOEs. And the Japanese press drags Australia into the fray, quoting Trade Minister Robb as saying essentially that everyone is lobbying for their own pet interests but there’s a will to reach a political (and that’s an interesting term to use isn’t it? Politics NOT economics will be the basis for any agreement) deal but everyone will have to do some give-and-take with regards to their political baggage.
It’s hard to say if the WSJ’s piece is coming, sock-puppet like, from official Washington sources. The fact that this is in the WSJ makes me a tad suspicious, but suspicion isn’t proof. If this is coming from Froman’s camp, then the US Trade Representative’s team really hasn’t learned a single thing from the (now years of) negotiations with Japan. Singling out, in public, the Japanese and trying to foist the blame for stalled negotiations onto them is just about the most counterproductive thing they could possibly do. The Japanese will go into face-saving mode, as in the Yomiuri’s feature, pointing the finger at everyone else and trotting out their well-honed cover story that “it’s all the other guys’ faults”. It could also be an acknowledgement of the reality that, without. Japan, there’s really little point in the TPP. Hence the pressure being heaped on the Japanese. They really are a special case as far as he TPP goes.
But again, the U.S. negotiating team seems unable to read the clearly signalled Japanese position. If they were going to cave on the substantive issues still in play, they’d have done it by now. It’s highly unlikely that Japan’s Prime Minister Abe has any domestic political room to manoeuvre — and the U.S. can’t or won’t throw him any sweeteners. A failed TPP deal will look bad for Abe (he has invested and continues to invest political capital in it), but as Amari’s comments at the start of the Sydney negotiating round show, if the negotiations do fail, there’s no shortage of handy scapegoats which the Japanese can use.
An article in the Nikkei Asian Review, on Obama’s lame duck status and how Republican hopefuls jockeying for position makes the prospects for seeing any legislation get done in the next two years even worse, discusses the TransPacific Partnership in passing. It points out another obstacle we’ve cited: Obama’s decision to be extremely secretive about the TransPacific Partnership text (literally only Congresscritters on the right committees can go and read the text; they can’t take copies and have their staffers study them) has produced a revolt over his abuse of the already-way-too-generous fast track authorization, which limits Congress to a yes or no vote on an entire deal once it has been cooked up by the Administration. Democrats are most upset about it, but they have a fair bit of Republican company. But as the article points out, even if the Republicans gain ground in November, it is unlikely to help any of the stalled trade deals:
Obama said earlier this year that he hoped to have a framework agreement on the Trans Pacific Partnership — the vast, 12-nation trading bloc — by the time of the East Asia Summit in Myanmar on Nov. 13-14. The TPP is the economic cornerstone of Obama’s Asian pivot. But a TPP deal has always been contingent upon congressional agreement to grant Obama “fast track” authority on trade pacts, so allies can be certain Congress will not tinker once decisions have been made.
There is a school of thought that a Republican-led Congress would be more business-friendly than Obama’s labor-allied Democrats, and the GOP might be more willing to grant the president the trade authority he needs. But that optimistic view ignores the 2016 electoral calendar, and Republican hardliners’ unwillingness to be seen giving this president anything that smacks of a victory.
As evidence of that obstructionist mindset, look no further than the number of empty posts at U.S. embassies around the world. At least 33 countries are currently without an American ambassador because Republican senators are holding up the normal process of approving nominations. Among those vacant posts are Vietnam, which has lacked an ambassador since August, at a crucial time when the U.S. is stepping up military aid to Hanoi in response to China’s increasing assertiveness. Thailand will soon be another, as Ambassador Kristie Kenney has announced she is returning to Washington without a replacement in position.
In other words, the Administration effort to pretend that the TransPacific Partnership is moving forward is fooling no one that counts. And the US negotiators have waited way too long to have made the sort of concession that might have enabled it to go forward. While miracles are in theory possible, that’s about what it would take at this stage to bring this deal back from the dead.