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Saturday, Nov. 19, 2011

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In the cross hairs: Prime Minister Yoshihiko Noda gets ready for a photo session alongside other world leaders Sunday at the Asia-Pacific Economic Cooperation forum summit in Honolulu. POOL

TPP commitment hinged to interests

Japan can exit anytime it feels short-changed, experts believe


Staff writer

Despite Prime Minister Yoshihiko Noda's recent declaration that Japan will join the Trans-Pacific Partnership negotiations, heated debate continues over the pros and cons of participating in the free-trade initiative.

One question that has surfaced repeatedly since Noda's announcement is whether Japan can opt out of the U.S.-backed TPP if the government decides taking part would undermine national interests.

Experts say Japan reserves the right to pull out of any international agreement at any time, but others say it would be practically impossible for Tokyo to do so once it joins the TPP talks, because of Washington's strong desire to include its fourth-largest trading partner and the world's third-largest economy in the regional trade pact.

When grilled by opposition lawmakers during an Upper House Budget Committee meeting Tuesday, Noda insisted his decision was based on the rationale that joining the TPP would be in Japan's best interests.

"But this doesn't mean Japan will remain in the talks if it turns out they are not in line with our national interests," he said, hinting Japan could quit the negotiations if the government judges the free-trade framework would not be beneficial to the economy.

Joining the TPP is backed by major businesses, which believe Japan's entry would open up new markets free of import tariffs and boost exports, but is fiercely opposed by the agricultural industry, which fears that a flood of cheap farm produce imports would devastate the sector and drive many farmers out of business.

During a meeting with junior Democratic Party of Japan lawmakers Wednesday, DPJ kingpin Ichiro Ozawa reportedly said Noda's lack of foreign policy experience would allow the U.S. to manipulate its long-standing ally.

Washington views Japan's TPP participation as necessary for the U.S. to maintain a strong economic presence in the Asia-Pacific region, especially as China's political and economic clout continues to expand.

During a speech Monday in Okayama Prefecture, former U.S. Secretary of State Henry Kissinger said, "the center of gravity of the world has switched from the Atlantic to the Pacific," and stressed that Washington and Tokyo need to work together to contain China's growing assertiveness.

But when asked if Japan could back out of the trade deal if it judged that its national interests would be undermined, Kissinger suggested Tokyo should look at the broader picture.

"I consider it natural that Japan look after the agricultural interests of its own population, but in our present world the challenge is to relate the national interest to the common interest," the Nobel Peace Prize laureate said.

Experts, however, say that as a rule of thumb, nations are free to withdraw from any international agreement if their national interests are threatened.

In a recent blog entry, Lower House lawmaker Kenji Eda, a member of Your Party, a minor opposition force, said there have been countless examples of nations deciding not to follow through on international treaties.

The U.S., for example, backed out of the Kyoto Protocol and still remains the only signatory yet to ratify the pact aimed at combatting global warming.

The World Trade Organization's Doha Round of trade negotiations, which began in 2001, has been stalled since 2008 because member countries are deeply divided over key issues, including agricultural and industrial tariffs.

In addition, free-trade talks that kicked off in 2007 between the Association of Southeast Asian Nations and the European Union reached an impasse in 2009, and the EU has since switched to bilateral trade negotiations with separate ASEAN nations.

"As can be seen, in the world of international treaties and agreements, each country, whether it be large, small, developed or developing, makes its own decisions on whether to join, sign, ratify, disagree or withdraw according to its national interest," Your Party's Eda, a former trade ministry bureaucrat, said on his blog.

"So it is a misconception or calculated propaganda to say that Japan 'cannot back out once it has joined the TPP negotiations,' " he said.

The TPP started out as an agreement among four nations — Brunei, Chile, New Zealand and Singapore — and discussions to expand the agreement are currently under way with the U.S., Australia, Malaysia, Peru and Vietnam.

Japan, together with Canada and Mexico, informed the international community of its intentions to join the talks during the recent Asia-Pacific Economic Cooperation forum summit in Honolulu.

But it is possible Japan will have to wait up to six months before it can actually enter the negotiations and start influencing decisions.

The participation of any new country in the TPP talks must first be approved by the nine nations currently involved.

The U.S. will also have to wait for Congress to endorse Japan's entry — a 90-day process — which will be followed by several months of preparations.

Critics say that by the time Japan takes its seat at the table it will be too late to have a big say in the TPP's broad framework and rule-making process, which are already at an advanced stage. The talks are expected to be concluded by late 2012.

Noda, who has promised to "protect what needs to be protected, and win what needs to be won" at the talks, has said produce such as rice — currently protected by a 778 percent import tariff — "is one of the sensitive products," although he didn't say whether he will push for rice to be excluded from the free-trade agreement, which in principle aims to abolish all import tariffs among members.

Sheila Smith, a senior fellow for Japan studies at the Council on Foreign Relations, an independent and nonpartisan think tank based in Washington, said talks on international agreements of this scale almost always run into difficulties, but stressed Japan's participation would be worth the effort in the long run.

"I think every participating country understands there will be difficulties ahead. No trade agreement that is meaningful is easy. Look at the bilateral effort by the U.S. and South Korea, or the protracted process of GATT/WTO or NAFTA," she said, referring to the General Agreement on Tariffs and the Trade and the North American Free Trade Agreement.

"But building opportunities for enhancing our competitiveness and creating new opportunities for strengthening our chances for increased economic growth is worth the effort," she said.



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