How and Why Japan Has Saved the TPP: From Trump Tower to Davos
The Trump administration has employed “America First” as its defining electoral and governing slogan, viewing economic openness and globalization as harmful to US jobs and industrial competitiveness. It regards trade surpluses as evidence of winning and deficits as evidence of losing; the stated goal is consequently bilateral trade deals as the optimal approach to reduce America’s trade deficit with its key trading partners. The result has been a turn towards economic protectionism, including American withdrawal from the Trans-Pacific Partnership (TPP). It is not clear that such a pursuit of bilateral trading arrangements is even economically feasible, but this policy stance displays a broader lack of confidence in multilateral institutions and contributes to the growing doubts about America’s leadership credibility in the Asia-Pacific.
While the United States under Trump has been biased toward bilateral trade deals, the so-called TPP-11 has progressed. On the margins of the APEC meetings in Da Nang, Vietnam in November 2017, the remaining 11 members officially agreed on the core elements of the renamed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Despite the absence of the United States and the suspension of 22 provisions from the original TPP agreement, the TPP-11 managed to succeed in maintaining the high-standard trade rules and over 95 percent of the tariffs elimination. Nevertheless, while the trade agreement was originally hailed for accounting for approximately 40 percent of the world GDP and one-third of world trade, these figures decreased to 12.9 percent and 14.9 percent, respectively, due to the US withdrawal. Consequently, the trade pact lost its significant influence as the primary trade integration framework in the Asia-Pacific region. The signing of the document is planned in March 2018, and the agreement is to take effect 60 days after the ratifications in at least six countries that clear the necessary domestic process.
During the process of reaching the TPP-11 agreement, Japan was instrumental in leading the way. At the outset, Japan seemed less motivated in promoting the TPP without the United States, believing that it would come back at some point. However, in a reversal of its earlier reticence about the TPP-11, Japan noticed that it would be difficult to realize the US return to the trade pact and changed its approach, extending maximum diplomatic effort for the early realization of the TPP-11 in the belief that this would pressure the United States to repent its withdrawal. In fact, former US trade official Wendy Cutler was particularly complimentary about the role that Japan played in filling the vacuum in Asia created by Trump’s withdrawal from the TPP, which China was expected to strive to fill.1
This essay aims to elucidate the process leading to the realization of the TPP-11 through an examination of Japan’s intentions and efforts. America’s return to the TPP was considered as serving Japan’s interests, indicating that Abe’s commitment to realizing the TPP-11 was based on “Japan First” as well as “America First.” Accordingly, Trump’s statement in Davos in January 2018 about possible reconsideration of the US withdrawal was exactly what Japan wanted and expected.
Japan’s TPP pivot from 12 to 11
Trump’s decision to formally withdraw from the TPP on January 23, 2017 shocked Japan, which had ratified the agreement on January 20, as he compelled Japan to make a drastic shift in its foreign and trade policy. The TPP was critical for Abe, who returned to power in December 2012, since it was part of economic policies dubbed “Abenomics” to combat deflation and revitalize the Japanese economy. Trade policies such as the TPP were incorporated into structural reforms or the third arrow of Abenomics, aiming to revitalize private investment.2
The US withdrawal from the TPP was thus a serious blow to Abe’s trade policy and his broader strategy for economic growth, but his robust loyalty to the United States and the significance of the US–Japan alliance system continued to impel him to pursue all possibilities to achieve a TPP that included the United States. Abe decided to make an unusual trip to New York to meet unofficially with president-elect Trump at Trump Tower in November 2016, becoming the first foreign leader to meet with Trump after his election victory. Although their conversation was never disclosed, Abe later recounted that he attempted to persuade Trump to keep the United States in the TPP.3
Abe’s efforts to keep the TPP alive continued after his meeting with Trump, and he stressed the significance of the early launch of the TPP at a series of bilateral summit meetings with leaders from the member states, including Justin Trudeau from Canada, John Key from New Zealand, Najib Razak from Malaysia, Lee Hsien Loong from Singapore, and Barack Obama from the United States. He also confirmed this point with his counterparts in subsequent visits to Australia and Vietnam in January 2017.4
At this point, Japan did not seriously consider the TPP-11. Abe went so far as to say that it would be “meaningless” to pursue the TPP without the United States and that renegotiating the 11-party agreement would “disturb the fundamental balance of benefits,” expecting Trump to change his mind.5 Abe told the Upper House TPP Committee that the TPP “lowers trading costs along multinational supply chains in one fell swoop,” and he pledged to “keep trying to sell the United States on the importance of the TPP,”6 demonstrating his strong hope of keeping it in the TPP.
With this determination concerning the TPP, Abe visited Washington for his first official summit meeting with Trump in February 2017. The two leaders issued a joint statement stressing that “noting that the United States has withdrawn from the Trans-Pacific Partnership, the leaders pledged to explore how best to accomplish these shared objectives. This will include discussions between the United States and Japan on a bilateral framework as well as Japan continuing to advance regional progress on the basis of existing initiatives.”7 The statement seems to entail the following points: 1) Japan will put the TPP entry into effect even without the United States; 2) the United States would not oppose this move; 3) Japan also aims to conclude ongoing negotiations such as RCEP and the JapanEU FTA; and 4) both governments would foster the Japan-US economic relationship including a bilateral FTA. The meeting served to convince Abe of Trump’s further determination to withdraw from the TPP and his acknowledgement of Abe’s continuous engagement in existing trade frameworks without the United States.
The trade ministers of the TPP’s remaining 11 members gathered on March 14 in Chile and on May 21 in Vietnam and agreed to thrash out a way forward on the agreement without the United States. The meeting in Chile saw no consensus on the TPP-11. For instance, Australia and New Zealand thought it favorable to go forward without the United States, their competitor for agricultural products, whereas Chile and Peru intended to invite China to seek a new trade deal. Indicating a desire for further talks and possibly encouraging the United States to return, Japan demonstrated its understanding of the TPP-11 option as a way of averting the alternative that would include China.8 In effect, thanks to Chile’s invitation, China joined the TPP ministerial meeting for the first time as an observer, a move that astonished Japan.9
It was Mexico that, allegedly, urged Japan to promote the TPP-11 framework. During the meeting in Chile, delegates from Mexico, Chile, and Peru told their Japanese counterparts that they would leave the TPP behind and seek to place greater effort on pursuing economic integration through the Pacific Alliance framework, if Japan had no intention of promoting the TPP-11. It was likely that Japan sensed China’s potential engagement in this Latin American economic framework due to its growing presence in South America, as Japan saw the Chinese delegation at the meeting in Chile. These messages were directly reported to Abe on March 17, soon after the meeting, and Abe became more inclined towards the TPP-11.10
Meanwhile, Vice President Pence’s remarks during his visit to Japan on April 18, calling the TPP a “thing of the past” indicated that the return of the Trump administration to the TPP was unlikely. It was right after this that Japan began to show its firm intention to promote the TPP-11. In his speech in New York on May 22, Deputy Prime Minister Aso stated that the 11 remaining countries would commence negotiations “over putting the deal into effect, without the world’s largest economy, at the APEC meeting in May.”11 The Australian Financial Review observed the development of Japan’s resurrection of the TPP-11 and described it as a “surprising about-face.”12
Trade ministers from 11 countries met in Vietnam in May 2017 and issued a statement confirming their consensus to put the TPP-11 into effect, after a number of twists and turns such as the Canadian disinclination to commit to the TPP and Malaysian hesitation related to the loss of expected benefits from the US market. According to the Ministerial Statement, they agreed: 1) to seek the early realization of the TPP; 2) to launch a process to assess options, including how to facilitate membership for the United States; and 3) to complete the task of this assessment by the APEC Economic Leaders Meeting in November 2017 in Da Nang.13
In the meantime, Japan stressed that there was no difference between the TPP-11 and the original one in terms of strategic and economic significance, and it highlighted the need for participating members to seek the early realization of the high-level trade rules agreed upon in the original pact. Japan’s willingness to lead the way towards the APEC Vietnam meeting to sign the TPP-11 was demonstrated by its role as organizing chair in a series of chief negotiators meetings following the three-day session in Hakone in July, followed by others in September and October except for the meeting in Sydney in August, as outlined in the table below. Japan “led the discussion,” as the Japanese government itself recognized.14
Table. Timeline of the Trans-Pacific Partnership and TPP 11
|2010||March||Commencement of the TPP negotiations with 8 members|
|2013||July||Japan’s official participation in the TPP negotiations|
|2015||October||Conclusion of the negotiations at Atlanta, the US|
|2016||February||Signature of the TPP text in Auckland, New Zealand|
|2017||January 20||Japan’s ratification notice to the Depository|
|January 23||Trump’s announcement on the US withdrawal|
|March 14-15||Ministerial Meeting in Vina del Mar, Chile|
|May 21||Ministerial Meeting in Hanoi, Vietnam|
|July 12-14||Senior Officials Meeting in Hakone, Japan|
|Aug. 28-30||Senior Officials Meeting in Sydney, Australia|
|Sep. 21-22||Senior Officials Meeting in Tokyo, Japan|
|Oct. 31-Nov. 1||Senior Officials Meeting in Maihama, Japan|
|Nov. 11||Ministerial Meeting in Da Nang, Vietnam|
|2018||Jan. 22-23||Senior Officials Meeting in Tokyo, Japan|
|Jan. 25||Trump’s mention of the possible US return to the TPP|
|March 8||Signature of the TPP-11 in Chile planned|
Source: Compiled by author based on the webpage of Japanese Cabinet Secretariat.
To reach agreement at the Vietnam APEC Summit in November, the chief-negotiators focused on the provisions to be frozen from the original agreement signed in February 2016 and committed themselves to minimizing the number of the provisions. Any provision could be frozen by the unanimous support of 11 members but the suspension is valid only until the US return to the TPP, indicating consensus regarding a preference for the US return among 11 members. Yet the suspended provisions were considered preferable since the US companies might also benefit from the rules and deregulations implemented by 11 members despite the US exit from the TPP. Therefore, in a senior officials’ meeting in Sydney in August 2017, the remaining 11 members effectively agreed to suspend rules involving the eight-year data protection period of biologics under the original trade deal, as this was sought only by the United States, which had insisted on a twelve-year protection period rather than the five-year period pushed by a majority of the members during the final negotiations in Atlanta in 2015.15 Eleven members hoped that a temporary freeze on certain terms would not only accelerate the speed of the TPP-11 negotiations but also encourage the US return.16 Negotiations over the suspended provisions were therefore limited only to rule-making since market access negotiations on tariff-elimination would have tended to be prolonged and politicized at home.
Symbolically, the US withdrawal from the TPP continued to affect the TPP-11 negotiations, causing a delay in their conclusion and hampering Japan’s plan to hold the TPP Summit at the APEC Da Nang meeting to present the epoch-making trade agreement. Trudeau decided not to take part in the summit; just before the planned signing, he told Abe that he felt the deal was not yet ready for an official decision, thereby upsetting the other leaders, who had been waiting for an hour for Trudeau and Abe’s entry into the summit room. During negotiations for the original TPP, Canada reluctantly accepted US demands that it abandon its rights to require investment in Canadian content development and to restrict access to foreign-made online content, and with the US departure from the pact, Canada was under no US pressure and thus demanded that this provision be suspended; this move was announced shortly before the 11 members reached a broad agreement on the TPP-11.17 For Canada, trade volumes with other TPP members, except for Japan and Mexico, are not large enough, and the Canadian government needed to pay more attention to the NAFTA renegotiations, in which Trump, the leader of its largest trading partner, threatened to withdraw if he was not satisfied with the renegotiations, damaging Canadian exports. While Canada wanted to take time to investigate the details of the TPP and its economic impact, Japan hoped to realize the TPP 11 as quickly as possible. This difference in approach arose from Japan’s view of the TPP from a more strategic perspective: the TPP was an avenue to counterbalance the growing influence of China, a concern which Canada apparently does not share.
Eventually, Canada’s demand for exceptional treatment of its own cultural products, as well as the Vietnamese one for the delayed introduction of rules for labor-dispute resolutions, an issue which Vietnam once accepted due to American demands, were solved, more simply, through the signing of bilateral side-letters among member states. This means that 11 trade ministers are set to gather in March 2018 in Santiago, Chile, for the TPP-11’s formal signature ceremony. Two frozen provisions, including the Malaysian demand for the abolishment of preferential treatment of state-owned companies, were eventually added, but the number of suspended provisions was kept to a minimum, amounting to 22 of about 1000 in total.
At the press conference held in the wake of the final negotiations in Tokyo on January 24, 2018, Motegi, Japanese minister in charge of the TPP, touched one of the most significant elements of the conclusion: “Japan will explain to the US about the significance of the TPP,” with a view to bringing it back to the TPP. Significantly, just two days after the announcement of the TPP-11 conclusion, Trump stated, “I would do [the] TPP, if we made a much better deal than we had” in Davos,18 the very first time Trump referred to the possibility of the United States returning to the TPP. The statement has provoked a great deal of speculation, especially about the extent of his seriousness,19 but the TPP-11 agreement, excluding the United States, seems to have had an impact on Trump, who has been lobbied by American farmers and manufacturers for a return to the TPP for the benefit of their exports. Therefore, a key element in his possible decision on a return to the TPP is the deal’s influence on American voters in the mid-term elections to be held in the autumn of 2018 and in the next presidential elections in 2020.
While the TPP-11 negotiations were in progress, the United States has been gradually applying pressure on Japan to agree to a bilateral FTA in line with Trump’s trade policy proclivity. The TPP was once considered in Japan to be a de facto US-Japan FTA, and the significance of it was stressed from a strategic viewpoint. However, Japan’s strong belief in the TPP as an economic rule-making framework, which affects state-owned enterprises, intellectual property, government procurement, and environmental and labor standards,20 has made it difficult for the government to abide by the US demand for bilateralism.
Nevertheless, the bilateral FTA agenda was mooted during the first Japan-US summit in February 2017, as mentioned earlier. Abe had a view that realizing the TPP would upgrade the Japan-US alliance, as he already proclaimed in his policy speech in the Diet in January 2017, saying that the “Japan-U.S. Alliance has [been], is, and will continue to be the cornerstone of Japan’s diplomacy and security policies. This is an unchanging principle,” despite US withdrawal from the TPP.21 Thus, Japan proposed to have a bilateral framework, later called the “Japan-U.S. Economic Dialogue” to formulate common strategy by establishing a high standard deregulation framework for trade and investment to spread to the rapidly growing Asia-Pacific region, which are exactly the same objectives attached to the TPP.
The first round of the Economic Dialogue, led by Aso and Pence, was held in Tokyo in April 2017, and Japan displayed no interest in the bilateral FTA, showing instead its willingness to promote joint projects such as high-speed railways and LNG exports. While Japan was more eager to establish a TPP-type economic rule-making mechanism with the United States, it had another reason to become cautious about a move towards a bilateral pact; the United States would inevitably assert pressure to remove more trade barriers on agricultural products, as Robert Lighthizer, nominee for US trade representative, stated in his Senate confirmation hearing: “I would list, of course, Japan as being a primary target for a place where increased access for agriculture is important.22”
“The era of bilateralism is over” is a phrase which the Ministry of International Trade and Industry (MITI, now METI) announced in the late 1990s after Japan and the United States had finally overcome their trade disputes over the numerical targets for market access of American autos, auto parts, and semiconductors in Japanese markets. The Trump administration’s adherence to bilateralism in its trade policy is reminiscent of US-Japan relations in those days, especially with the appointment of Lighthizer to be the US Trade Representative since he, as former deputy USTR, was responsible for forcing Japan to implement voluntary export restrictions on steel in the 1980s. Japan records America’s second largest trade deficits, totaling roughly $70 billion in 2016 (China’s trade surpluses are much bigger at about $350 billion),23 and the Trump administration has regarded this fact as a “loss” and has been requesting a rebalance by establishing the bilateral Japan-US FTA to get more access to Japanese markets.
METI began to promote a four-pillar trade strategy, consisting of the TPP-11, RCEP, Japan-EU EPA, and Japan-US Economic Dialogue, in mid-2017. Yet it remains unclear whether to include the bilateral FTA in the Japan-US Economic Dialogue, illustrating the consensus yet to be formed regarding the approach and content of this bilateral high-level channel. In effect, while the trade officials have envisioned a blueprint involving the United States in the TPP-11, the Ministry of Finance (MOF) remains relatively cautious about US inclusion, worrying that the rule-making negotiations would certainly lead to those including Japan’s market-opening and tariff-cutting talks, especially on the farm sector, as mentioned earlier. In the original TPP agreement, despite other members committing to almost 100 percent trade liberalization, Japan exceptionally ended up with 95 per cent, primarily because it insisted on keeping the tariff lines in the so-called sacred products such as rice and wheat.
Notwithstanding this unwillingness in MOF, Deputy Prime Minister and Minister of Finance Aso has a view similar to METI, denying the possibility of Japan making any concessions in bilateral trade talks: “the US will soon realize that it could gain much less from a bilateral FTA with Japan than ones to be given under the TPP.” Aso’s belief can also be sustained by the fact the United States would lose concessions that Japan promised to offer in the TPP, such as a tariff-free quota exclusively for American rice of 78400 tons.24 In addition, launching a potential US-Japan FTA has been perceived as acknowledging the unilateral approach of the Trump administration, such as the use of section 301 against Chinese “theft” of American intellectual property, allowing the United States to “act as judge, jury and executioner on any grievance that it identifies.”25 The Japanese government’s official stance is that the United States should deal with the Chinese trade issue not in a unilateral way but based on multilateral rules like the TPP.26
It was during the second round of Economic Dialogue in Washington on October 16, 2017 when the United States for the first time officially touched upon the issue of a bilateral FTA by indicating its “strong interest.”27 Japan naturally showed little appetite for answering this call, stating that there was no agreement between the two countries on whether the dialogue was to open up talks for a two-way trade deal. Aso, Japan’s chair for the dialogue, continued to emphasize the importance of the TPP during the talks, adding, “I don’t think they strongly requested it [bilateral FTA].” Aso later attributed Japan’s non-support for a bilateral FTA as a means of dealing with American trade deficits to the fact that “the situation is totally different” compared to the 1980s when Japan accounted for 53 percent of US trade deficits.28 Japan also considered that the US commitment to other trade negotiations, such as NAFTA and KORUS FTA, made it difficult to allocate more trade negotiators for the bilateral FTA with Japan—an optimistic view.
Importantly, Trump did not propose a bilateral FTA with Japan during his visit to Tokyo in November 2017, unlike with China and South Korea where he adopted a bilateral approach to reducing the US trade deficits with them. This may suggest that the United States prioritized the stable US-Japan alliance relationship for collaborating on the North Korean issue based on Trump’s strong personal bond with Abe, rather than complicating bilateral relations by commencing with the FTA, for which Japan showed huge reluctance. While expressing a slight possibility of a deal, Abe flatly denied US Ambassador William Hagerty’s assertion that the two leaders “did discuss this tool,” saying that “there was no talk on a Japan-US FTA in my conversation with President Trump.29”
Yet, taking into account the US withdrawal from the TPP, the tariffs do remain as long as there exists no trading arrangement, forcing Japanese automobile companies to pay 2.5 percent tariff on their export products, compared with, for instance, South Korea’s automakers who benefit from tariff-free business transactions, thanks to the KORUS FTA. Major US allies, including South Korea, Australia, and Israel, have signed bilateral FTAs, as well as security treaties, to draw the relationship much closer, but Japan has yet to join this club despite the fact that Abe has stressed the role of the US-Japan alliance as a cornerstone in Japan’s foreign policy.
The current Japanese debate on the bilateral FTA with the United States has tended to overlook the potential contributions the FTA may make from both an economic and a strategic perspective. North Korea as a growing threat may offer a ticket to join this club. A Japanese Diet member recently stated that if the bilateral FTA were officially proposed, especially through Trump himself, Japan would need to accept it given Japan’s heavy reliance on the United States for defense,30 indicating that Washington might use the situation as a bargaining chip to draw concessions from Tokyo with regard to commencing a bilateral FTA. Yet, even if the bilateral FTA negotiations began, the conclusion of the TPP-11 can bolster Japan’s assertion that it could not make any concessions beyond those it provided in the TPP, a scenario that Japanese officials often mentioned. In this scenario, Japan would need to form a consensus between Aso and the ministries regarding the pros and cons of an FTA with the United States as to whether or not Japan opposes a bilateral FTA to redress the two countries’ trade imbalance.
TPP-11 and RCEP
Since Trump announced the US withdrawal from the TPP in January 2017, RCEP has been viewed as an alternative regional integration framework possibly serving as a rule-setter in the Asia-Pacific region. Yet, dissimilarities between the TPP and RCEP in terms of the coverage of rules and levels of deregulation and liberalization are rather substantial. For instance, the TPP aims to promote high labor and environmental standards and procurement, but even a working group on all three issues has not been formed in the RCEP negotiations. The RCEP admits the reality of different needs ` among 16 members, and offers a differentiated package allowing its member countries to have flexibility in opening their economies. For instance, China’s commitment to the RCEP is strongly oriented toward developing countries and favors more exemptions in the form of tariff elimination duties, with few deregulation requirements and consequently few reforms required of domestic economic systems. RCEP’s speed and level of liberalization is going to be based on the standard that China, India, and ASEAN’s developing countries generally prefer, the so-called “lowest common denominator” dilemma in terms of liberalization, making any future merger of the TPP and RCEP difficult.
This assessment can be sustained through identifying the treatment of SOEs in the TPP as posing a major obstacle to China’s prospects for joining it, whose policy seeks to ensure a level playing field for SOEs, or competitive neutrality between SOEs and private companies, despite exceptions for local SOEs and sovereign wealth funds, given the dominance of state capital in some of China’s key sectors, including petrochemicals, finance, and steel. The Xi administration currently engages in enlarging SOEs through the consolidation of major ones, allowing national monopolies with stronger Communist Party control.31 Its approach to RCEP naturally portrays a much lower level of ambition for trade liberalization and deregulation of economic rules than the TPP. This means liberalization of the service and investment sectors, for example, is quite unlikely to make significant progress under the RCEP, partly because China would strongly resist this type of liberalization, given that it would require transparency with regard to the business activities of its SOEs.
Consequently, the differing positions on regional integration between developed and developing states, as in the WTO, have caused delays in the development of RCEP negotiations. RCEP has thus failed to meet the promised deadline for its conclusion already three times. At the Ministerial Meeting in Manila in November 2017, China sought rapid conclusion of the negotiations while allowing a large number of exceptions in the contested provisions such as intellectual property rights, but Japan sought a high-quality deal covering services and investment rather than just lowering tariffs for trading goods. Japanese trade minister Seko cautioned during the meeting that “discussions on rulemaking were insufficient compared with those on tariffs,” and that “the talks were not balanced.”32 This position was supported by Australia but not by some ASEAN members who wished to complete the negotiations within 2017, namely, ASEAN’s 50th anniversary, backing China’s position.
This experience of Japan seems to be reflected in Abe’s annual policy speech in the Diet. In the 2017 speech, Abe referred to RCEP as another integration framework that Japan would promote with efforts to render it an “ambitious” arrangement similar to the TPP, but in the 2018 speech, Abe did not touch on RCEP while referring to the TPP and Japan-EU FTA as a key trade platforms.33 The TPP-11 can operate in favor of Japan in the RCEP negotiations given seven states possess dual membership, making it possible for them to forge a coalition to promote rule-making negotiations, as the TPP employed, in the RCEP negotiations. This was another incentive for Japan to lead the TPP-11 negotiations.
This essay reviews Japan’s commitment to the TPP-11 with a view to bringing the United States back into the TPP, while identifying its struggles over trade relations with the Trump administration. The establishment of the TPP-11 was overshadowed by the United States, as observed in some members’ attempts to invite China into a new trading arrangement and individual member’s demands for the exclusion of provisions which had been forced into the content through US pressure in the original TPP negotiations. However, the 22 frozen provisions in the TPP-11 are set to be revalidated only when the United States returns, representing the members’ consensus on the preference of a US presence in the TPP.
Their view on the need for this is highlighted by another country which also overshadowed the TPP-11 negotiations, namely China. For instance, Vietnam had high expectations for the TPP as it would contribute to a 7 percent increase in GDP, but the increase would drop to as low as 1.3 percent following the US exit.34 Vietnam’s engagement in the TPP-11 and its coordination role with Japan as co-chairs were sustained by its anxiety that the TPP’s demise would only do China good, according to the Japanese ambassador to Vietnam.35 In fact, Chinese experts are well aware of this incentive behind the TPP-11, which, they argue, “can help fulfil one of the TPP’s goals, that is, to prevent China from being involved in making trade rules for the Asia-Pacific region. Even countries such as Singapore and Vietnam… have worked to exclude China from the CPTPP.”36 It should, however, be noted that everyone would welcome China’s participation in the TPP, if China really could meet the criteria, because transparency about business activities in its SOEs, for instance, would be required, allowing foreign companies to compete on a level playing field in the huge Chinese market.
It was Japan that most wanted the US presence in the TPP-11, for both economic and strategic reasons, and it is thus no wonder that Japan played a key role in the TPP-11 conclusion, which was acknowledged by Trudeau in his Davos speech in January 2018.37 A key factor sustaining Japan’s successful role in Asia-Pacific trade politics is the altered trade negotiations structure. Bureaucratic sectionalism among the ministries of foreign affairs, economy and industries, and agriculture and fisheries, that once constrained Japanese trade policy initiatives, became a thing of the past under the Abe administration. The TPP headquarters, headed by the prime minister, was filled with over 50 professional staff members seconded from relevant ministries that took part in the TPP negotiations under the lead of the Cabinet Office, or Kantei. While the number of staff in the headquarters shrank to around 20 after the signature of the original TPP in February 2016, Kantei augmented the personnel and reinvigorated the headquarters in the spring of 2017, targeting the Da Nang APEC meeting for the TPP-11 conclusion. As a senior official remarked, “there is no option if the TPP-11 failed,” signaling a sense of urgency that arose from the global trend of protectionism, now serving as the principal imperative sustaining Japan’s self-imposed task.38 Japan’s effort has almost been rewarded by Trump’s reference to a possible US return to the TPP in Davos—as was envisioned by Japan—albeit unexpectedly, while engaging in the TPP-11 negotiations.
※ The author appreciates the assistance of Osaki Yuma in data collection.
1. Adam Behsudi, “The missing labor piece of the NAFTA puzzle,” Politico, November 17, 2017.
2. Terada Takashi, “The Abe Effect and Domestic Politics,” Asian Perspective, 39 (3) (2015), pp.381-403.
3. Nihon Keizai Shimbun, January 30, 2018.
4. Yomiuri Shimbun, January 19, 2017.
5. Nihon Keizai Shimbun, November 22, 2017.
6. Nihon Keizai Shimbun, December 1, 2017.
7. Joint Statement from President Donald J. Trump and Prime Minister Shinzo Abe, Washington DC, February 10, 2017.
8. Jiji Tsushin, March 10, 2017.
9. Nikkei Business, April 25, 2017.
10. Asahi Shimbun, January 8, 2017.
11. Nihon Keizai Shimbun, April 23, 2017.
13. The full text is accessible here: https://www.cas.go.jp/jp/tpp/naiyou/pdf/danang/171111_tpp_danang_statement_jp.pdf
14. Information obtained from the Cabinet Secretariat webpage: http://www.cas.go.jp/jp/tpp/naiyou/pdf/hanoi/170521_tpp_hanoi_gaiyou.pdf
15. Terada Takashi, “Japan and the TPP Conclusion: Regional Order, Negotiations, and Domestic Adjustment,” The Asan Forum, October 23, 2015.
16. Nihon Keizai Shimbun, August 31, 2017.
17. Nihon Keizai Shimbun, January 18, 2017.
18. Wall Street Journal, January 27, 2018.
19. For instance, former USTR senior official Wendy Cutler comments: “Is Trump serious? What caused this shift? Might the U.S. actually return to this agreement? And if so, on what terms and timetable?” Nikkei Asian Review, January 30, 2018.
20. Terada Takashi “Japan and Entanglement of Regional Integration in the Asia-Pacific: Combining Cutting-Edge and Traditional Agendas" in S.B. Dus and M.Kawai (eds.) Trade Regionalism in the Asia-Pacific: Developments and Future Challenges, (Singapore: Institute of Southeast Asian Studies, 2015), 85-102.
21. The Japanese text is accessible here: https://www.kantei.go.jp/jp/97_abe/statement2/20170120siseihousin.html
22. Japan Times, March 15, 2017.
23. The information is accessible here: https://www.thebalance.com/trade-deficit-by-county-3306264
24. Nihon Keizai Shimbun, April 27, 2017.
25. Financial Times, August 7, 2017.
26. Nihon Keizai Shimbun, September 12, 2017.
27. Jiji Tsushin, October 17, 2017.
28. Reuters, November 7, 2017. Japan currently accounts for only 9 percent of the US trade deficit, whereas China records 47 percent.
29. Asahi Shimbun, November 30, 2017.
30. Kobe Shimbun, October 18, 2017.
31. Nihon Keizai Shimbun, August 25, 2017.
32. Jiji Press, September 11, 2017.
33. The Japanese text is accessible here: https://www.kantei.go.jp/jp/98_abe/statement2/20180122siseihousin.html
34. Toronto Star, January 26, 2018.
35. Jiji Tsushin, February 2, 2018.
36. China Daily-US Edition, January 30, 2018.
37. Trudeau states, “I would also like to personally thank Prime Minister Abe for hosting the recent talks and for his leadership on reaching this positive outcome.” The full text of Trudeau’s speech in Davos is available here: https://www.weforum.org/agenda/2018/01/pm-keynote-remarks-for-world-economic-forum-2018/
38. Asahi Shimbun, January 8, 2018.