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Trade pact lures Japan

A Japanese alliance would strengthen a Trans-Pacific Partnership, but the nation's resistance to open trade remains a concern

By Alan Yonan and William Cole


LAST UPDATED: 08:09 a.m. HST, Nov 12, 2011

The United States' push to establish a free-trade zone in the Asia-Pacific region got a major boost Friday with Japan's announcement that it plans to join the negotiations.

While welcoming the announcement by Japanese Prime Minister Yoshihiko Noda, U.S. officials at the Asia-Pacific Economic Cooperation conference in Waikiki said Japan has to prove that it can meet the high standards for open markets that the other nine countries participating in the Trans-Pacific Partnership trade talks have embraced.

"In close consultation with Congress and our domestic stakeholders, we look forward to engaging with the Japanese in these discussions," said U.S. Trade Representative Ron Kirk.


» What it is: Negotiations to establish a free-trade zone in the Asia-Pacific region

» Participants:
* United States
* Japan
* Australia
* Peru
* Vietnam
* Malaysia
* Brunei
* Chile
* New Zealand
* Singapore

» Next step: Five more rounds of negotiations are scheduled, and TPP parties hope to have an agreement by next year.

"To join the negotiations, Japan must be prepared to meet the TPP's high standards for liberalizing trade and to address specific issues of concern to the United States regarding barriers to agriculture, services and manufacturing trade, including nontariff measures," Kirk said.

U.S. officials are hoping to come away from this week's APEC summit with increased support for the trade pact, which is seen as having the potential to grow into a regional free-trade zone covering half of the world's economic output.

Japan would become the 10th country to take part in the TPP negotiations, joining the United States, Australia, Peru, Vietnam, Malaysia, Brunei, Chile, New Zealand and Singapore.

Kirk met Friday with trade ministers from TPP member countries on the sidelines of the broader APEC meeting at the Hawai'i Convention Center. It was the ninth round of TPP negotiations since March 2010.

Kirk said the TPP ministers made significant progress in their discussions, the substance of which will be announced by APEC leaders at the end of the summit.

"The Trans-Pacific Partnership ministers expect that the leaders of the TPP countries will be able to announce the broad outlines of a high-standard 21st-century trade pact," Kirk said at a news conference. "And many of them believe the Trans-Pacific Partnership can be the basis for a long-term APEC goal for a free-trade area in the Asia-Pacific."

Five more rounds of negotiations are scheduled, and TPP parties hope to have an agreement by next year.

East-West Center fellow Peter Petri said Japan's announcement was significant given its major role in global trade.

"The TPP negotiations will now include the world's first- and third-largest economies. No one can call this a small agreement anymore," Petri said.

"Japan has many interests in common with the United States but also strong connections with other Asian economies. The negotiations will become more complicated but also more robust because they will more closely reflect the Asia-Pacific region."

However, Japan's participation in the TPP talks is far from guaranteed, given historical opposition to free-trade agreements by many sectors in Japan, notably the agriculture community, said Lori Wallach, director of Public Citizen Global Trade Watch, a public advocacy group.

"It's not a done deal," she said. "The prime minister wants to negotiate terms, but he's going to have a huge fight in the Parliament," she said.

Japan's announcement was welcomed by the U.S. Chamber of Commerce.

"Prime Minister Noda's announcement sends a positive message to the United States and other participants in the negotiations," said Tom Donohue, president and CEO of the organization. "It is important that this announcement be followed by a strong and sustained commitment to market-opening reforms and a willingness to put all issues on the table."

But Secretary of State Hillary Clinton cautioned there is much work -- and much more time -- needed to forge broader trade alliances. She compared APEC's goals to the lengthy creation of a trans-Atlantic alliance with Europe.

"When you look back and think about the countless meetings, the endless discussions, the never-ending kinds of negotiations that took place over many years to establish the trans-Atlantic architecture, we expect the same on the trans-Pacific architecture," Clinton said at a Friday news conference at the convention center.

"So I think we're making progress, and it's a long-term commitment," she added.

The free-trade agreement "is, we think, moving quite well in the right direction," Clinton said.

"We're improving regulatory quality and transparency, and we think if you look at the steady progress that has been made on these issues, that's a great story to tell," Clinton said.

"At the same time, we're trying to promote environmentally sustainable growth, green industries, new opportunities to secure energy efficiency and energy security, and that, too, is an ongoing commitment," she said.

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HonoluluHawaii wrote:
Thought it was best that THE FREE MARKET system whereby the forces of supply and demand would be the biggest factor in determining whether a product is viable to be exported or imported. Now I have not read any of the above text in detail, however I am a "closet" economist because I use my "spare time" acquired skills on Business due to my "Making Money in The Stock Market" bit via William O'Neil of Investor's Business Daily. I suppose the biggest impact that these cooperation gatherings have produced is that, Oh, there are a set of islands in the middle of the Pacific which is the 50th State of the USA ???? Die I know that well ok.
on November 12,2011 | 01:20AM
wiliki wrote:
Just googled O'Neil. I've often wondered whether just technical timing of the market ala IBD is profitable. We certainly seem to be in the kind of smooth market fluctuations that warrants that kind of consideration. The big players have investment strategies that are now working to take advantage of the fluctuations. Maybe the market is just saying that Obama has finally brought about a remarkable amount of stabilization of the stock prices-- even with this European Crisis. Although one would suspect that the Europeans are not that stupid. They're just milking this for all the political advantage that they can get.
on November 12,2011 | 04:00AM
wiliki wrote:
Great news. I think that more trade will really improve the economies in the Pacific area. I should also really help Hawaii. We may well become the second home to many wealthy business people who have to travel back and forth between the fringes of the Pacific Rim.
on November 12,2011 | 03:51AM
Charliegrunt wrote:
I fail to see how free trade agreements help our economy. From what I have seen so far, it's application does not produce jobs for us or improve our balance of trade. My observations are that our country is a consumer nation with a higher standard and cost of living than our free trade agreement "partners". Large multi-national corporations move their manufacturing to poorer countries, pay lower wages, bring the products back to the US for sale without paying any tariffs or value added tax (VAT). How is this practice suppose to create jobs, improve our balance of trade and economy? Like HonoluluHawaii, I also thought it was best to have a FREE MARKET controlled by supply and demand.
on November 12,2011 | 05:36AM
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