By Sachiko Aoki; Yu Toda in Davos, Switzerland
Japan, Australia, and nine other nations have agreed to officially sign the new TPP accord in March. Japan used both hard and soft approaches to persuade Canada, which once intended to withdraw from the agreement, to return, making the conclusion of the agreement possible. Since the economic scale of the new TPP has shrunk due to the U.S.’s withdrawal, expansion of its ranks will now be an issue.
On Jan. 23, the day the chief negotiators’ meeting finalized the schedule for signing the new accord, Canadian Prime Minister Justin Trudeau commended the new TPP agreement in his speech at the annual meeting of the World Economic Forum (Davos Forum). He said: “We welcome the conclusion of the negotiations, which have resulted in a more positive agreement for Canada.”
Trudeau called off at the last minute the summit meeting that was supposed to affirm the broad agreement on a new TPP accord in Vietnam last November. Since then, Japan had told Canada repeatedly that “countries that refuse to cooperate will be left behind,” according to a source close to the negotiations. Japan also demonstrated that it was poised to sign the accord even without Canada.
Japan reckoned that even though Canada was adopting a tough stance, it would “compromise” in the end because it was engaged in negotiations with Japan on an economic partnership agreement (EPA) in order to expand exports of agricultural products to the Japanese market. In fact, agricultural organizations and other groups in Canada were clamoring for the realization of the new TPP accord.
Economic Revitalization Minister Toshimitsu Motegi, who was in charge of the TPP talks, visited Mexico in early January and confirmed the early signing of the accord with Secretary of Economy Ildefonso Guajardo. The motive behind this was to demonstrate Japan’s unwavering cooperation with Mexico, which is Canada’s ally in the NAFTA renegotiation with the U.S., to prod Canada to agree at an early date.
Canada has the second largest economy after Japan among the TPP 11. Its withdrawal would undermine the significance of the TPP considerably. Japan proposed to Canada signing a separate document on Canada’s cultural protection policy with the other TPP partners. All the other TPP participants compromised to give consideration to Canada’s domestic concerns. On the morning of Jan. 23, Canada informed Japan of its acceptance of this proposal.
Issues still remain for the early effectuation of the TPP accord.
Effectuation will require the ratification of at least six nations. However, the Malaysian opposition is against the TPP and a general election is expected to be held this summer. Mexico is also holding its presidential election in July. Domestic ratification procedures may be delayed substantially due to the political situation in each country.
U.S. Sec. of Commerce Wilbur Ross reiterated at a news conference in Davos on Jan. 25 that the U.S. will not participate in the TPP, stating: “President Trump has a stronger interest in bilateral rather than multilateral talks because bilateral negotiations are much faster than multilateral ones.”
Since the U.S. is unlikely to join, the question now is whether the TPP 11 will be able to make the new accord go into force at an early date and recruit the Philippines and other nations interested in joining in order to expand the membership. (Slightly abridged)