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ECONOMY > Agriculture

Opinion: Protect agriculture in TPP renegotiation

  • August 2016
  • , pp. 264-269
  • Translation

By Democratic Party House of Representatives member Yuichiro Tamaki

 

Next year, the U.S. will take a tough stance toward Japan, regardless of whether Donald Trump or Hillary Clinton becomes the next president, particularly with regard to the Trans-Pacific Partnership (TPP), because both have indicated their opposition to the accord.

 

Japan must first be prepared for a demand for renegotiation under the new president to obtain more favorable terms for the U.S.

 

However, it will not be easy to scrap a basic agreement by 12 participating nations. On the other hand, the new president’s accepting the agreement as it is will also be embarrassing. Therefore, the U.S. will probably say: “We are opposed to what President Obama signed, but we do not reject the TPP framework per se. We ask for renegotiation by the participants and will approve the agreement if the terms are favorable to the U.S.” In this case, the U.S. would demand further concessions from Japan.

 

Another cause of concern is the U.S. certification system.

 

The U.S. has a mechanism for de facto veto. Even after a trade agreement is ratified by the participating nations, if the president is not satisfied that the other country’s domestic laws and policies meet U.S. expectations for what is needed to meet obligations and achieve results, the trade pact will not be allowed to go into force. In other words, if the U.S. president says “no,” the treaty will not take effect.

 

It is conceivable that the U.S. may take advantage of this in the area of copyright.

 

The TPP agreement’s provisions on copyright are consistent with the U.S. system of granting compensation way above the actual damage, which is meant to prevent recurrence of violations. However, the Japanese Civil Code only provides for compensation equivalent to actual damage. Therefore, if the U.S. president deems that Japanese domestic laws are inadequate, the U.S. may apply further pressure on Japan to revise its laws.

 

The point is the U.S. president may threaten to use this veto power as a card to draw concessions from the other TPP nations.

 

Furthermore, the U.S. side can be expected to apply pressure on Japan behind the scenes of formal negotiations. As a matter of fact, it has already begun to do so.

 

After the basic TPP agreement was reached last October, the government decided to institute a system to compensate pig farmers when production cost exceeds gross profit. The U.S. objected to this, claiming this system interferes with fair competition. President Barack Obama reportedly asked Prime Minister Shinzo Abe to review this system at their summit meeting in the Philippines last November. Secretary of Agriculture Thomas Vilsack demanded the same thing from Minister of Agriculture, Forestry, and Fisheries Hiroshi Moriyama when he visited Japan later that month.

 

According to reports, neither Abe nor Moriyama agreed to this demand. However, there is no doubt that it is highly possible that the U.S. will continue to apply pressure and meddle in Japan’s domestic policies.

 

As explained above, next year will be a challenging year for Japan, and its real diplomatic negotiation ability will be put to the test. Yet, from the contents of the TPP agreement, we cannot help being skeptical about the Abe administration’s negotiation ability.

 

I think that autos, Japan’s top export industry, should have been the area where it needed to go on the offensive in the TPP talks. Yet the 25% U.S. tariff on trucks will only be abolished in 30 years and the 2.5% tax on cars will only be eliminated in 25 years. On the other hand, U.S. beef will benefit immediately from the effectuation of the TPP accord.

 

The five sensitive product sectors (rice, wheat, beef and pork, dairy products, sugar) should have been protected. But the government was not even able to protect these sensitivities.

 

For sure, negotiation is a process of give and take. For example, Japan could have asked for shortening the period for auto tariff abolition in exchange for concessions on agricultural products. Yet the provisions of the TPP accord show that Japan made repeated compromises without gaining anything in return.

 

Another problem is the Abe administration’s refusal to disclose full information on the negotiation process.

 

I believe the reason is that unwritten secret agreements might have been made.

 

A report issued in May by the International Trade Commission (ITC), an independent U.S. government agency, contains a shocking revelation. Under the TPP agreement, Japan will create a 70,000 ton tariff-free import quota for U.S. rice. However, the ITC report says that Japan committed to allocate an 80% share, or 48,000 tons, of its imports of 60,000 tons of medium-size grains to the U.S. under “undocumented commitments.” If true, the actual agreement is to import a total of 118,000 tons of U.S. rice, even though the government has been explaining to the Japanese people that the quota for U.S. rice imports is 70,000 tons.

 

If only to prepare for renegotiation with the U.S., the contents of the TPP agreement need to be examined closely. The Japanese government is being tested on whether it can push back unreasonable demands from the U.S. capitalizing on the renegotiation, and make the TPP agreement more beneficial for Japan’s national interest. (Abridged)

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