Taking a quick poll of current trending news, using that word loosely, you will notice that the TPP (Trans-Pacific Partnership) is largely missing from the media. Why?One reason is due to the U.S government stalemate over the fiscal ceiling that, if left unresolved, could lead to ramifications we could sum up as cray banger.
The Trade-Pacific Partnership, Initially under the acronym TPSEP, planned to liberalize trade in the Asia-Pacific region among Brunei, Chile, Singapore, and New Zealand. After several negotiations with original members new candidate countries are being considered into the agreement; some of which include Mexico, the United States, Vietnam, Malaysia, and Japan. The United states began courting the TPP in early 2008 under the Bush administration’s leadership and now under Obama’s administration is being completed. The TPP’s main priority is to “free” trade among partners to dilute barriers that stifles economic growth, i.e, tariffs and corporate restrictions.
Japan voiced its interest in the TPP in early March 2013 to improve its trade in Asia especially after China advanced its position as the second largest economy–one Japan once held. The agreement would give Japanese corporations larger access to different markets; an overall positive outcome to minimize China’s growth within Asia as the largest exporter. Concerns have grown among anti-globalization, environmental, and consumer-labor groups that the trade pact would stiffen nation business growth; in other words,Japan would become dependent on foreign companies similar to Mexico during its NAFTA treaty with the U.S and Canada.
The Citizens Trade Campaign, a social and environmental trade policy group, pointed out that the TPP special provisions for corporations are “a wishlist of the 1%…[that] of the 26 chapters under negotiations, only a few have to do directly with trade….new rights and privileges [are enshrined] for major corporations while weakening the power of the nation states to oppose them.” More concerning is that a larger majority of information on the TPP meetings stem from Wikileaks and the Citizens’ Trade Campaign leaks. For instance, Intellectual Property Watch reported that $25,000 dollars were raised for Wikileaks to collect and publish drafted text from current TPP agreements because most has been redacted from the public domain and shared chiefly with industries. The shrewd secrecy in these negotiations concern Japanese as the chief majority of proposals involve fields in government procurement, competition policy, labor standards, intellectual property, financial service, investment, telecommunications and environmental standards.
One goal of the TPP is to eliminate tariffs and some of those involve what are labeled “sacred precincts.” Japanese tariffs cover about 9,018 specific items, of which the “sacred” categories of rice, wheat, beef and pork, dairy products and sugar account for 586. If current tariffs on all those items were maintained, according to The Mainichi, Japan would still eliminate tariffs on 93.5 percent of trade goods in the TPP zone. It is widely believed, however, that TPP negotiations are shooting for tariff elimination on more than 95 percent of items.Farmers in Japan have been protesting the TPP agenda for a while now. The Liberal Democratic Party, however, has vowed that it would seek to maintain tariffs on vital “national trade goods” including rice, wheat and barley. It was a clear move meant to reduce worries among voters that food safety would be jeopardized for trading consensus. Even if, the Mainichi notes, tariff protections are maintained for certain agricultural products and dropped for processed items, there is still a real possibility that domestic industries would take a hit under the TPP.
Japan has fared well under Shinzo Abe’s leadership since 2012 winning its bid for the 2020 summer Olympics, raising exports, and taking a modest step out of recession. Consumer spending rose 0.9% and public sector infrastructure spending, part of Japan’s stimulus package, rose 0.8%, which is all good news for the country. Japan, however, faces a wave of declining prices; a good thing for the average Joes who can now buy more with the same amount of money. For companies, however, if deflation persists for too long then their profits decline; thus, setting into motion a slew of policies that are meant to offset this scenario that involve cutting labor, closing manufacturing facilities, and reducing employee wages. For Shinzo Abe, TPP’s allure is the possibility that it could open new markets for the country in locations where it does not have strong footing. Nonetheless, he risks letting outsiders dominate Japan if he acquiesces to any compromises drafted by other nations such as the U.S; as to how Abe will handle the ramifications of the agreements is unknown. One thing is certain, Japan has much to determine before it can safely procure its citizens that Japanese businesses, foods, and jobs will not be negatively affected. In the meantime, GDP (Gross Domestic Product) and PMI (Purchasing Managers Index) indicates the Japanese economy may see some advances against deflation fairly soon–continuing a string of welcomed reports.