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TPP’s setback to affect other trade talks

With prospects dim that the TPP agreement will take effect, Japan is looking at other trade negotiations with the EU and other Asian countries to find a way forward. However, multilateral negotiations where the interests of the participating nations clash usually take a long time. Thus the TPP’s setback may affect momentum in other trade talks.

 

Economic partnership agreement (EPA) talks with the EU have entered a critical stage, and a chief negotiators’ meeting was held in Brussels on Jan. 17-20. The two sides failed to resolve their differences over tariffs on Japanese cars and European agricultural products and other issues. From March, many EU nations will hold major elections, so the “time limit” is fast approaching, and this could make negotiations tricky.

 

Some 16 countries, including ASEAN economies, are looking to form the Regional Comprehensive Economic Partnership (RCEP), but the gap between Japan, on the one hand, and China and India, on the other, remains wide as Japan is keen on promoting trade liberalization while China and India are hesitant to open up their markets.

 

As for the Japan-China-ROK free trade agreement (FTA), which has been under negotiation since 2012, the three countries have not even been able to set common goals to serve as the basis for negotiations.

 

Japanese companies with production plants in North and Latin America will benefit greatly from multilateral trade agreements that set common rules, so setbacks in negotiations may deal a heavy blow.

 

In this context, President Donald Trump has been talking about promoting bilateral trade negotiations. It is highly possible that the Japanese government will have to come up with a new strategy. Trump has also shown a strong interest in trade talks with the UK, which has decided to leave the EU.

 

A senior official at an economic ministry is concerned about negotiations with the U.S. “We anticipate that the U.S. will make demands that are tougher than the TPP accord’s provisions, and it will be extremely difficult to find compromises acceptable to the Japanese Diet.”

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