TPP Unraveling as Japan Rejects President Obama

By Greg Robb, The Wall Street Journal

30 April 14

Pacific Rim trade agreement is in danger of collapse in the wake of the failure of President Barack Obama and Japanese Prime Minister Shinzo Abe to settle longstanding bilateral issues, said Derek Scissors, a resident scholar at the American Enterprise Institute, a conservative think-tank, on Tuesday.

A U.S. and Japan deal was seen as crucial to the success of the Trans-Pacific Partnership, a U.S.-led free trade initiative involving 12 nations.

There was a flurry of negotiations while Obama was in Japan last week. After the visit, White House officials have said there had been a breakthrough in a path forward to resolve the issues.

But Scissors called the comments “not credible” because there U.S. has not provided a timetable or specifics, while the Japanese have simply denied there even was a breakthrough.

“We’re now at the point where the TPP might just fail outright,” Scissors said in an interview, calling Obama’s visit to Japan “a dangerous failure” in economic policy terms.

The U.S. has been pushing for greater access to Japan’s agricultural and service sectors in return for allowing more imports of Japanese autos. Other countries have been waiting to see Japan make concessions before offering their own, analysts said.

The deadlock might push any TPP deal back into 2015, Scissors said.

“You can easily see TPP languish. It is almost a lock that it won’t happen this year,” he said.

The analyst said there was more than enough blame to go around for both sides.

Abe doesn’t seem interested in economic reform and Obama has not been willing to spend any political capital to support a free-trade deal, unpopular with many Democrats, Scissors said.

Scissors said that U.S. will now have to consider carefully whether to move forward on a broader deal without Japan.

U.S. Agriculture Secretary Tom Vilsack suggested on Monday that the trade agreement might have to proceed without Japan if Tokyo fails to open its agricultural markets to imports, according to a report on Bloomberg News.