By Lambert Strether of Corrente.
While doing the research for this morning’s work-up of TPP, I ran across this thirty-six page PDF, said to the the Japanese government’s summary of TPP (see translated headline here; link appears on page). During the Atlanta negotiations, I noticed that the Japanese were playing a much more forward role than usual, starting with all the leaks in the Japanese press that the deal was done (when in fact it wasn’t), and Trade Minister Amari serving as a constant source of quotes for the hungry press, threatening to leave at midnight because he had a plane to catch, and so forth. Frankly, I had expected Abe to throw Obama under the bus, once they had his permission to remilitarize, to protect Japanese agriculture for their upcoming elections.
So I shot the PDF off to NC contributor Clive, who knows Japanese, saying “The media is trumpeting “Agreement” but I’m not sure what kind of agreement we have.” Here’s how Japanese agriculture did get protected. Take it away, Clive!
Wow. That is a treasure trove. Unfortunately “treasure” isn’t perhaps the right word if you’re a U.S. citizen. Certainly as far as Japan is concerned, you’ve been sold out good and proper by your government.
That master negotiator USTR Froman has caved big time and handed Japan everything it asked for, certainly in terms of agriculture. To call it a sweetheart deal (Japan being the one who is being wooed, USTR Froman apparently being the Girl Who Just Can’t Say No) would be understating it. About the only concession from the Japan is the reduction to a small degree in agricultural tariffs. But as you’ll see, there’s no hurry to implementing them and plenty of get-out clauses.
Too much detail to quote the provisions detailed in the document in their entirety, but let’s take beef by way of example. Here from Section II “Conclusion of Market Access Negotiations” subsection 1 “Market Access for goods (Access to the Japanese Market)” is item 4, “Beef”:
(1) To avoid the elimination of tariffs while also reducing tariffs (but) with safeguards (the tariffs on beef will be reduced as follows).
38.5% (current) → 27.5% (initially (at the enactment of the TPP)) → 20% (after 10 years) → 9% (16 years later)
trigger quantity (this is an annual “anti-dumping” limit that, once imports rise above a set level mean an additional import surcharge is made):
590,000 t (initially) → 696,000 t (after 10 years) → 738,000 t (after 16 years) (Also for the 5 years after year 11 from the enactment of the TPP there will be a 20% cut in the quarterly trigger level*)
safeguard tax rate:. 38.5% (initially) → 30% (4 years) → 20% (11-year) → 18% (15 years)
From Year 16 (since the TPP became enacted) the Safeguard tariff tax will be reduced by 1% every year. But if the Safeguard tax is invoked (i.e. if the anti-dumping trigger is reached) the Safeguard tax will not be reduced the following year. However, if the Safeguard tax (threshold) level is not reached for four (consecutive) years then the Safeguard tax will be abolished.
If imports have been substantially reduced due to an outbreak of livestock disease for more than three years, these tariff changes will not be applied for a period of time of up to five years starting from a substantial lifting of the ban (this provision will not be applied to the U.S. and Canada until after the end of January 2018).
* I must add that I have no idea what this clause means at all! I’m guessing that it is trying to say that between years 11 and 16 (inclusive) following the TPP enactment, the trigger quantity has to be smoothed out over the year as beef sales have seasonal variations, but someone who knows more about how the current beef import anti-dumping measures work would need to tell me what this change would do.
So, Japan gets to keep not only its beef import quotas with the additional “safeguard” special anti-dumping tax but also the regular tariffs which only reduce (and aren’t eliminated) over 16 years. The other agricultural tariff terms are similarly bad for the U.S. and stunningly good for Japan. Japan, in return, gets everything it wanted on auto imports. My best advice to Japan’s ministerial negotiator Amari is to run from the building as quickly as you can before Froman realises he’s been had.
Well, that’s interesting. I’d comment only that I question “caving”; I don’t accept Democratic narratives of weakness. If we think of TPP as a trade deal, then “caving” to the Japanese, the second largest economy at the table, on every conceivable agricultural issue would seem to make the ratio of benefit to cost uncomfortably even.
However, if what the people Obama (and hence Froman) work for want — better, what the trans- and post-national squillionaire parasitroids who have injected their controlling, neoliberal, TINA-flavored ideological venom into the hive mind of our political class really want — is the destruction of national sovereignty in favor of global rule by the corporations they own, then the ratio of benefit to cost is still enormously high; Japanese beef is trivial from the elite’s commanding heights, although Texas, Nebraska, Kansas, California, Oklahoma, Missouri, and Iowa might not like it very much. But no doubt their local oligarchies will come around, if only the right inducements can be found.
Readers, please thank Clive for yet another great job, done in such a timely fashion.