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Japan faces big hurdles to reach TPP
Publication Date : 03-09-2013
There are high hurdles that must be cleared for the Trans-Pacific Partnership negotiations to end within the year, as sought by the United States.
What should be done to achieve a breakthrough in the conflicting views in the multilateral talks?
Given the circumstances, Japan must seek cooperation with other nations through sector-by-sector tariff reduction talks, while making redoubled efforts to craft its own strategy.
The TPP talks held in Brunei, in which Japan took part as a full-fledged member for the first time, have ended. Twelve Pacific Rim countries participated, including the United States and Australia.
The United States played a key role in the nine-day Brunei round, which began August 22, but it seems to have failed to produce any major progress in key fields. Rather, it appears that the very complex situation surrounding the free trade negotiations has become all the more conspicuous, as exemplified by wide gaps between emerging and industrially developed countries concerning intellectual property rights.
The 12 countries participating in the TPP talks said in a joint statement released at the end of the Brunei round that their summit talks at a conference in October of the Asia-Pacific Economic Cooperation forum in Bali, Indonesia, “will be an important milestone” regarding whether the 12 countries can conclude the talks before the end of the year.
The next TPP negotiations are scheduled for mid-September in Washington. It is uncertain, however, whether the Washington talks will lead to a broad agreement in October as envisioned by the United States to help conclude the talks by year’s end.
One area where opinions have differed sharply among participating nations is the duration of patents on pharmaceutical products. The United States, home to giant pharmaceutical companies, wants the length of patents extended to make it easier for them to develop new pharmaceuticals.
Newly emerging economies such as Malaysia, however, have reacted harshly to the US stand. They insist that the US-proposed extension would hamper production of low-priced pharmaceuticals whose patents have expired.
Avoid solely defensive stance
Developed countries such as the United States, trying to help their companies enter Asian markets, want to have preferential treatment of state-owned firms in Asian countries abandoned for competition on an equal footing with the rest of the countries. However, the Brunei round could not end the impasse on this subject, with Malaysia and Vietnam adamantly opposed to the US views.
More difficulties are anticipated in negotiations on eliminating tariffs, on which the interests of the respective countries have been split in a complicated way.
In the Brunei round, Japan proposed eliminating tariffs on about 80 per cent of imported products. It avoided in-depth talks on tariffs concerning five sensitive farm products such as rice, wheat and dairy products, stating Japan’s position on these products “has yet to be finalised.” The Liberal Democratic Party has called for retaining the tariffs on the five products.
The focus of the oncoming negotiations lies in what actions Japan will take in last-ditch talks for trade liberalisation from September on.
Given that the TPP talks are designed to realise the “principle of elimination of tariffs,” this country will inevitably face strong pressure from the other participating countries to raise its percentage of tarifffree items. However, it would not be in keeping with this country’s national interests to take a flatly defensive stance regarding the domestic farm industry.
While there are said to be five categories of highly sensitive farm products, the total number of items within these categories that are subject to tariffs is 586.
Of these, which items should there be concessions on and which must be defended by all means? There must be accelerated discussions to make domestic arrangements on the matter.
Every country in the TPP talks has its own highly sensitive items: sugar for the United States and dairy products for Canada, for example.
Japan will be tested as to whether it can truly be hard-nosed in negotiations, using other participants’ weak points and seeking out participants that will act in step with Japan.
Japan must harness the vigor of other Asian countries to fuel its own economic growth.
Instead of being swayed by US intentions to play the pace-setter in the negotiations, this country should take a leading role in formulating TPP rules in such fields as intellectual property, investment and environment.