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POLITICS

Battle over the TPP: Part 3—The clash of rice and autos

  • 2015-04-30 15:00:00
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(Chunichi Shimbun: April 23, 2015 – p. 1)

 

 Minister of Economy, Trade and Industry Akira Amari and the U.S. Trade Representative (USTR) Michael Froman held 70 hours of talks on the Trans-Pacific Partnership (TPP) agreement from the night of April 19 to the dawn of April 21. The two met for the first time in about seven months in Amari’s office. In the working-level meeting held beforehand, Acting Deputy USTR Wendy Cutler whispered to Hiroshi Oe, acting chief negotiator of the Japanese side: “Froman has become better. Please ask Amari-san to see him,” which created a wishful thinking that “There may be a compromise on rice” on the Japanese side. However, this glimmer of hope was dashed by Froman’s intransigence.

 

 In order to avoid removing the tariff on rice, the Japanese side considered “a special category” in which Japan imports about 50,000 tons of rice from the U.S. with no or a low tariff, but Froman would hardly compromise on his position of demanding “around 200,000 tons.”

 

 With an eye on the rice market in South Korea that is attempting to join the TPP, the U.S. has been emboldened in the negotiations. This negotiating session made the Japanese side realize the seriousness of the U.S. and its strategy.

 

 On the other hand, when the Japanese side began discussing automobile parts, whose tariff Japan seeks the removal of, the U.S. showed no sign of accepting the immediate lifting of the tariffs on engines and transmissions, which Japan exports in volume.

 

 One of the negotiators said in an exhausted tone: “In the end, Japan does not budge on rice or the U.S. on autos, so the negotiations deadlock.

 

 It is obvious that while the U.S. loudly calls for “removing tariffs without exception,” it candidly tries to maintain its “sanctuaries” for not only autos but also other items. Some even in the U.S. question this attitude.

 

 One of the typical U.S. “sanctuaries” is sugar. The sugar interests extend over the entire country with sugar cane in the South and sugar beet in the North. These interests wield tremendous political clout. Like Japanese rice, sugar in the U.S. is substantially protected with subsidies and import restrictions.

 

 In the TPP negotiations with Australia, although Canberra demanded that sugar should be on the negotiation table, the U.S. refused to even discuss this, saying, “Sugar was excluded from the U.S.-Australia free trade agreement tied before.”

 

 Catherine Mellor, Director for Asia at the U.S. Chamber of Commerce that actively promotes the TPP criticizes such an attitude by saying, “The U.S. cannot set a good example in multinational negotiations if it refuses to even put it on the negotiation table.” Citing Japan’s agricultural reform in parallel with the TPP negotiations as example, Mellor said: “Each country has important areas to protect. I expect my country to have the courage to work on reform.”

 

 By using the preceding TPP negotiations between Japan and the U.S. as a stepping stone, all 12 participating countries will aim to reach a final agreement within this year. All countries will naturally insist on their own “sanctuaries” in the meeting, which will hamstring the talks.

 

 Expecting the bilateral negotiations between Japan and the U.S. will set a good example for coordination of “sanctuaries,” Scott Miller, a senior advisor at the Washington-based think tank Center for Strategic and International Studies, emphasized: “Each country is watching to see how the two major powers can mutually recognize each other’s vested interests and use these to benefit the whole.” (Abridged)

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