As US’s presidential contest moves forward, tensions over the Trans-Pacific Partnership (TPP) continue running high. Questions like when and whether Washington lawmakers will ratify the deal even as the White House continues to make the case for its swift passage arose and renewed, and also the deliberations on the TPP are now underway in the legislature of Japan.
Trade has been taken as a high-profile role in the debate between the Republican and the Democratic because the candidates in both parties keep arguing over the past deals such as the North American Free Trade Agreement and the potential benefits or costs of passing the TPP.
Obama Administration officials think that TPP is feasible although the political climate is difficult. They think that the issue is about better explaining the issues in order to counter anti-globalization narratives.
The US commerce chief Pritzker even stressed the value of the trade pact in response to Hillary Clinton’s criticisms of the final TPP outcome. He thinks that the TPP is a gold standard which is the toughest trade agreement in the world. Clinton was previously the US Secretary of State from 2009 to 2013, during which she supported the TPP pact as a gold standard for trade agreements.
New Zealand Prime Minister John Key also thinks that TPP is a very good deal in a challenging set of negotiations. And he also suggested that the trade deal could still get passed in Washington after the new US President is elected.
Trade Enforcement Report
The success of the Obama Administration in trade enforcement was also touted in this year’s National Trade Estimate report which was released late last week. The report highlights various WTO dispute rulings that have found partially or fully in favor of Washington, ranging from Chinese trade remedy actions on high-tech American steel to Argentina’s various import restrictions.
The Administration has brought more enforcement cases at the WTO than any other member, used pre-dispute engagement to push trading partners to live up to their obligations, and strengthened US government enforcement capacity, in response to barriers highlighted in previous NTE reports.
The US trade chief also pledged that Washington would continue its efforts to boost enforcement of international trade rules while highlighting the importance of reducing existing trade barriers through other avenues, such as the negotiation and implementation of trade agreements.
The 474-page report features repeated mentions of the TPP, outlining the areas where Washington envisions potential trade growth or other key benefits with respect to each of its TPP partners.
Japanese Legislature Kicks off TPP Debate
In the meantime, Japan started to ratify TPP this week, prompting the heated debates in the Japanese legislature.
Japan’s Democratic and Communist parties both are in the opposition of the trade pact while the ruling Liberal Democratic Party is in favor of the pact and holds solid majorities in both legislative chambers.
Japan was the last country to join in the negotiations. The trade pact has long been controversial in the Asian economy with the difficult domestic politics on areas such as agriculture and automobiles largely credited with delaying its earlier entry into the talks.
The threshold needed for TPP to enter into force is the ratification by all 12 signatories within a two-year window, or if that fails ratification by at least six countries with 85% of the group’s GDP. Ratification by both the US and Japan is essential for the pact to move forward.
Both Obama and Shinzo Abe have made the TPP a signature part of their respective policy agendas. Obama has touted the TPP’s potential for setting the “rules of the road” in the Asia-Pacific region, and Abe has included it as part of the structural reforms that make up the “third arrow” of his highly-scrutinized “Abenomics” economic plan. They believe that with US, Japan as well as other countries’ participating in the TPP, the members will achieve great profit and gain chances for growth.
Above all, whether the TPP will work effectively still depends. Economists have both positive and negative comments over the TPP. The TPP will not only affect the members but also other countries beyond the TPP. Countries that are not parties to the negotiation will likely be asked to accede to the TPP as a condition of bilateral trade agreements with the U.S. and other TPP members