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Japan says Pacific Rim pact offers best trade deals

Japan’s deputy prime minister Taro Aso Japan’s deputy prime minister Taro Aso
Manuel Armenta | 22 Abril, 2017, 09:59

While the US may be out of the TPP, Japan isn't.

Japan and the U.S. have kicked off a new economic dialogue series, with both sides apparently having divergent agendas.

Prime Minister Shinzo Abe and Trump have agreed that currency issues should be handled by the two countries' finance chiefs.

The dialogue sets out three policy pillars that will structure further talks to be held in December, but a number of thorny issues were discernibly shelved for the time being, perhaps owing to more pressing geopolitical concerns and the need to show a united front, but, nevertheless, revealing a sizable gulf in each country's economic postures that will be tough to resolve, analysts attest.

According to the Nikkei news article, one of the reasons Japan wants to move forward with the TPP is that it was given a green light by the United States and confirmed that President Donald Trump would not object to TPP negotiations among the 11 remaining members.

Japan prefers multilateral trade pacts to bilateral ones, as it is reluctant to accede to more concessions in its politically sensitive sectors such as agriculture and farming.

The Japanese government is picking up the pace on reviving the Trans-Pacific Partnership trade and investment deal, with talks scheduled next month among the 11 countries left in the pact after the withdrawal by the U.S. after the election of president Donald Trump.

Up to now, the Japanese government has been cautious about pushing ahead with the TPP without the USA, but has changed its approach in light of the Trump administration's hostility to multilateral deals.

Japan, out of consideration for the United States, refrained from taking a clear position on the proposal. It is believed such a tax would push up the prices of US imports, which in turn would make the dollar stronger against major peers. Implementing the deal without the US will require changes to the text.

Aso's comments underscore Japan's fear of a two-way agreement that would expose it to stronger U.S. pressure to open up politically sensitive markets such as agriculture and beef. If the two countries enter bilateral negotiations, Japan may face more severe demands than under the TPP over tariffs on agricultural products and other areas.

"I don't see the comment as a problem as the U.S. Treasury secretary later clarified Washington's stance", Aso told reporters on Thursday, when asked about Trump's comment. "There's no quick fix", Aso said.

The government, however, changed course to aim toward the idea of "TPP 11" - a name referring to the 11 nations other than the United States - due to two concerns it now has.

"President Trump believes it is in the interest of the United States to negotiate trade agreements on a bilateral basis".

With a multilateral pact like the TPP, Mr Aso said that "Japan stands to gain from other countries, even if it loses out in some respects to other countries, like the US".