【Analysis】 Japan seeks “flexibility” from US in TPP talks (Dec. 14, 2013)


 

Ministers of the 12 countries involved in the Trans-Pacific Partnership free-trade talks closed their meeting in Singapore earlier this week, failing to reach agreement before the year end as expected. Differences remain among member countries, as the United States confronted other members in many areas including intellectual properties and tariffs on farm products.

In an effort to find a way out of the difficulties, the ministers said in their joint statement that they will continue to work “with flexibility,” and the Japanese government focuses on this phrase as a foothold to make the U.S. change its hardline policy.

Many members of the ruling Liberal Democratic Party’s committee on the TPP talks also stated the need for the government to strengthen cooperation with countries which have concerns over the U.S. In the committee meeting held on Friday, December 13, government officials in charge of negotiations explained that the ministers have made substantial progress in the rule-making process, but gaps remain among member nations in areas such as intellectual properties and state-owned enterprises. They said that as for the field of market access, including tariffs on agricultural products, the negotiators are yet to identify potential landing zones.

The committee members unanimously expressed irritation over the U.S. for insisting that Japan abolish tariffs on the key farm products and ignoring the joint statement issued after the bilateral summit meeting in February which recognizes that both countries have “bilateral trade sensitivities.”

As clearly stated by Yasutoshi Nishimura, senior vice minister of the Cabinet Office who attended the ministerial meeting, Japan is strongly determined to protect the key products in line with the Diet resolutions. However, the U.S. continues to urge Japan to cut tariffs and the two nations failed to narrow the gap in Singapore.

Concerning trade sensitivities, Japan’s Deputy Chief Negotiator Hiroshi Oe pointed out that there is a difference between the range of interpretation by the U.S. and Japan. According to Oe, for example, the U.S. recognizes that asking for a 10-year phase out of tariffs instead of immediate elimination would be considerate enough, while Japan believes that is far from understanding the sensitivity of the issue. Japan’s negotiating stance is based on the Diet resolutions which state that the government should not accept any tariff reductions, including a phase out over a period of more than 10 years.

The U.S. is taking the lead also in the conflicts regarding issues other than market access. In the area of intellectual properties, the U.S. demands for longer and stronger patents on new medicines, while developing nations such as Malaysia and Vietnam oppose to it, saying their people require affordable generic medicines.

As for state-owned enterprises, the U.S. insists that preferential treatment for such firms should be revised to ensure a level playing field for private companies, but developing nations fear that the revision would create great confusion, as the domestic economies in many of the nations are supported by public firms.

Nishimura told the commission meeting that the key to finalizing the negotiations would be “flexibility,” which was included in the joint statement of the ministerial meeting, adding that the member countries would not be able to come to consensus without being flexible. He said he stressed this point especially to U.S. negotiators, since it was Japan which asked that this term be added to the joint statement.

Still, it would be too optimistic to think that things will be better off in the future. Koya Nishikawa, head of the LDP’s TPP committee, said Japan wants the U.S. to be flexible, while the U.S. hopes the other 11 TPP member countries to become flexible and abide by the U.S. rules.

While admitting that Japan-U.S. bilateral negotiations will be the key to setting the future course of the TPP talks, Nishikawa said that one way to get the U.S. to make concessions would be for Japan to join hands with other member countries which are discontented with the U.S. tactics.

Negotiations remain unpredictable until spring

Prospects for the TPP agreement remain dim as the ministers failed to strike a deal in Singapore, but the Japanese government is determined to work for reaching conclusion, considering that setting rules in such areas as intellectual properties and government procurement will be beneficial for the domestic economy.

Ministers of the TPP member countries, eager to maintain momentum for completing the agreement, expect to meet again in January. Japan was among those which insisted on holding a ministerial meeting next month.

Meanwhile, Japan is set on protecting its sensitive farm products in the negotiations for the area of market access, and is determined not to make any compromises. Nishimura reiterated that Japanese negotiators plan to discuss rulemaking and market access of goods in a package, as many fear that if negotiations on tariffs are left behind, Japan will be at a disadvantage.

Considering that the U.S. government is aiming to obtain visible results in the TPP negotiations before the midterm elections in November, Nishimura hinted that the member nations will try to reach agreement by spring at the latest. LDP’s Nishikawa also said that January’s ministerial meeting will be crucial in settling the talks.

(Dec. 14, 2013)

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