Is the TPP talk between the U.S. and Japan facing a dead end?

The Trans-Pacific Partnership Agreement (“TPP”) is a free trade agreement currently being negotiated by twelve countries: The United States, Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, etc.

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During Barack Obama’s recent Asian trip, the President tried to negotiate with Japanese Prime Minister Shinzo Abe for an agreement on TPP. The negotiation is still far from an end, as the conflicts between the two countries in terms of import still exist. A trade agreement between the U.S. and Japan is crucial to the Trans-Pacific Partnership as the two countries are the biggest ones involved in the trade agreement. Although both presidents see this agreement an important component in their tenures, the impact of making a compromise creates too high risks for both countries.

For Japan, the farmers have been used to protection through tariffs on imports of products such as wheat and rice. Although recently Japan offered significant reduction on tariffs on products including beef and pork, Mr. Abe is not ready to further lower the tariffs yet since farmers consist of an important part of his constituency. Meanwhile, the U.S. is hard to pass a deal by the Congress as it refused to give the President fast-track authority, meaning the Congress could refuse to approve the deal even if President Obama finally reach a deal with Japan. The U.S. is not stuck to its demand about tariffs while not being able to guarantee any agreement to be legalized. After more than 40 hours of meeting between the two countries’ representatives, yet even the personal involvement by Obama and Abe failed to bring a final deal to the negotiation.

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TPP may proceed without Japan if Tokyo refuses to open its agricultural markets to imports. The US strongly expressed their intention to have Japan respect the free trade purpose of this agreement and provide market access to other countries in order to make TPP more comprehensive. Meanwhile, the U.S. is said not considering moving forward without Japan as they believe the agreement will be much less of value without Japan’s participation.

How about American public’s point of view of their country’s role in TPP negotiation? According to a new poll, a majority of Americans support the U.S. to join TPP. The survey conducted by Pew Research Center showed that 55% Americans believe the TPP is a good thing for the country, while 25% think it’s bad. The percentage of American supporting TPP is higher than their support for TTIP, the European counterparty of TPP, and their support for growing trade between the U.S. and China. The reason is that the American public’s wish to expand their trade with Japan, who still hasn’t made a deal with the U.S..

 “There are a lot of uncertainties we need to resolve, either technically or politically,” a Japanese official said. Both sides  offered significant compromises, with the U.S. dropping insistence on scrapping all tariffs and Tokyo offering bolder market access improvements than previously.

http://thediplomat.com/2014/04/americans-support-the-tpp-trade-with-japan/

http://www.japantimes.co.jp/news/2014/04/29/business/economy-business/tpp-may-proceed-without-japan-fails-open-agriculture-sector/#.U2Fg-a1dUto

http://online.wsj.com/news/articles/SB10001424052702304518704579523290746402288?mg=reno64-wsj

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