【Analysis】 Joint statement on Japan-U.S. preliminary talks for TPP – Japan’s acceptance of U.S. demands as-is (April 13, 2013)


 

The preparatory talks between Japan and the United States to allow Japan join the Trans-Pacific Partnership free-trade talks reached agreement, with Japan making significant concessions in various areas. The vital point is that Japan gave in totally to the U.S. demands concerning the automotive sector, which means Japan has given away before entering actual negotiations its biggest bargaining chip to win exemptions from tariff elimination for key products.

As Japan allowed the U.S. to backload lifting of tariffs on imports of Japanese motor vehicles, its economic partnership strategy began to waver fundamentally. Other countries such as the European Union members, China and South Korea are also likely to follow the U.S. in demanding a delay in the reduction of tariffs on car imports. Australia has already asked Japan in the negotiations for the bilateral Economic Partnership Agreement to allow Australia to keep tariffs on car imports for the time being.

Moreover, Japan and the U.S. even agreed that the U.S. can keep the tariffs for more than five years for passenger cars and more than ten years for trucks, which is longer than that agreed in the U.S.-Korea Free Trade Agreement. The Japanese government issued an estimate that Japan’s participation in the TPP talks would drive up its gross domestic product by 3.2 trillion JPY, but this estimate is based on the condition that the U.S. lifts tariffs on automobiles immediately and U.S.-bound exports increase as a result. Most of the estimated economic impacts are calculated on assumption that auto exports will increase, which means that the government should review the estimates.

The joint statement also states that the two governments will negotiate bilaterally on non-tariff barriers such as sanitary and phytosanitary measures in parallel with the TPP negotiations. In its 2013 National Trade Estimate Report on Foreign Trade Barriers, USTR calls on Japan to review its ingredient disclosure requirement for food additives and it is highly likely that the U.S. will set foot in the area of food safety regulations which affect the Japanese people’s lives. Regulations on pesticide residues are also likely to come up on the negotiating table.

Members of the opposition parties who represent farmers’ interests criticize the agreement as “breach of trust.” Has the Japanese government gained national consensus on the details of the agreement? Abe administration must disclose sufficient information to the Japanese people and start again from offering chances for national discussion.

(April 13, 2013)

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