TPP Hara-kiri: Will Japan Kill Off This Trade Pact?

Hara-kiri is defined as "ritual suicide by disembowelment." Two years ago, I described Japan joining negotiations to enlarge the existing TPP membership as a non-starter mainly because of Japan's  strong agricultural lobbies blocking off any sort of liberalization of sensitive crops--especially rice. There too remains the quite frankly idiotic complaint Americans have that the Japanese car market is "protected" since they have time and again failed to sell their oversized, gas-guzzling, left-hand drive cars that are unsuitable for sale in Japan. Yet, for obvious reasons, the US has been keen on Japan joining since it's the world's third largest economy and would in theory induce "bandwagoning" effects wherein others will feel they cannot be left behind and join as well.

As it is turning out so far, Japan has [surprise!] been the most intransigent of parties to TPP negotiations over agriculture. The US Trade Representative has already complained about their Japanese counterparts:

The US has accused Japan of blocking progress on a trade deal between 12 countries on the Pacific Rim by not allowing open access to its markets for agricultural products and motor vehicles. In his most critical comments yet on Japan, Michael Froman, the top US trade official, said: “We can’t have one country feeling entitled to take off the table and exclude vast areas of market access while the other countries are all putting on the table more ambitious offers...”

Japan wants to maintain – or phase out slowly – tariffs on five agricultural products including rice, beef, and pork that it has declared “sacred”. The two countries also disagree on what is needed for the three big US carmakers to compete on a level playing field with Toyota, Nissan and others. At a congressional hearing on Thursday, Mr Froman, the US trade representative, said he had told Japan that it was not living up to its commitment to help create a “high-standard, ambitious, comprehensive” agreement.

Harakiri here refers to political suicide by Japanese politicians. Removing protections on what they call "sacred" sectors (including beef, of course) would result in lost votes from rural interests who've traditionally supported the Liberal Democratic Party (LDP) and played a not-insignificant role in keeping it in power. So, apparently, the US is now backtracking. Call it a "low-standard, unambitious, shallow" agreement instead:

It remains highly uncertain to what extent the two countries can move closer on outstanding issues at a series of planned meetings between Akira Amari, minister in charge of TPP talks, and Michael Froman, U.S. trade representative, likely to last until Friday, as they remain far apart after their 18-hour talks held in Tokyo last week...

Washington, which had long called on Tokyo to stick to the basic TPP principle of abolishing all tariffs, gave up on doing so, and it is now asking Tokyo to lower its tariffs on beef — one of the main U.S. interests — to below 10 percent, according to negotiation sources [my emphasis].

So either no deal is done or a highly watered-down one is riddled with exemptions and opt-outs. As I said before, it would be low-standard/unambitious/shallow to the point that American lawmakers and their constituencies would become disinterested altogether

Japan’s position on agricultural products also has broader implications for concluding the TPP negotiations anytime soon. When one member doesn’t eliminate tariffs on a broad swath of products, others are compelled follow suit. Japan’s failure to eliminate tariffs on a large number of food and agricultural products would result in the withdrawal of concessions to Japan not just by the United States but by other TPP members. Some of those countries no doubt are looking for such an excuse to protect their own sensitive products.

The result would be a downward spiral of expectations for the TPP, with the deal moving from a comprehensive, first-class agreement to one that may have difficulty generating the level of interest and support needed here at home to gain congressional approval [my emphasis].

I remain rather pessimistic about TPP's prospects since Japan is far from the only country expressing reservations. If Japan doesn't kill it(self) off, there are others waiting in the wings to do so.

UPDATE: US-Japan bilateral talks have not yielded results, unfortunately for TPP's US boosters.