Japan’s Abe tries to rescue TPP, but US seafood sector may be better off without it

Published on
November 23, 2016

Japan’s Prime Minister Shinzo Abe visited U.S. President-elect Donald Trump at Trump Tower on Friday, 19 November, the first foreign leader to do so. Japan fears Trump’s threat to withdraw U.S. military forces unless Japan pays the full cost of base expenses, rather than the current 75 percent, and he wants to persuade Trump to change his mind on the Trans-Pacific Partnership Agreement (TPP).

Abe has suffered a big hit to his domestic prestige after strongly promoting the TPP – over opposition from his own party. The TPP is not popular in Japan, but is seen as a necessary counter-balance to China’s growing influence, along with increased regional military cooperation.

Abe was made to look foolish when U.S. Senator Majority Leader Mitch McConnell suddenly announced the agreement would not be scheduled for a vote during the lame-duck period, as President Barack Obama had urged. The trade deal is structured so that it will not go into effect unless ratified within two years by at least six countries, representing at least 85 percent of the total GDP of the 12 signatories (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam). This figure is impossible to achieve without participation of the U.S.A., so a U.S. failure to ratify kills the deal.

The TPP covers a very broad range of industries and issues, including agricultural products, patent protections, investment access, and international arbitration – the latter being the point most criticized by Trump, as it would overrule even U.S. court rulings.

Many of the participants already have free trade agreements (FTAs) with the United States that include seafood trade. Those that do not are Brunei, Japan, Malaysia, New Zealand and Vietnam. New Zealand is a major world supplier of hake and hoki, while Japan’s major seafood exports to the United States include yellowtail and scallops. For the U.S. seafood trade, the most likely TPP impact would have been an influx of farmed shrimp from Vietnam and Malaysia, to the detriment of Gulf Coast shrimpers.

The International Trade Administration (ITA) of the U.S. Dept. of Commerce lists the key market access benefits of the deal for the U.S. seafood sector. Malaysia, New Zealand and Vietnam will eliminate import taxes on 100 percent of U.S. fish and fish products exports immediately, while Japan will eliminate 92.6 percent. However, the first three countries are primarily suppliers rather than promising import markets. Japan already takes most of the U.S. cod and pollock, so it is unlikely that they would import more if the Japanese tariffs were lower.

Regardless of the U.S. action, Japan's lower house approved the deal on 10 November. The decision will automatically stand after 30 days, even if the upper house does not approve it. Though this may be a wasted effort, Prime Minister Abe is trying to show the strong support of Japan and other regional countries for the deal. He hopes Japan’s approval will provide leadership and momentum that will either get Trump to change his mind or bring the other members back to the table for an alternative agreement.

Malaysia has urged Japan to push Trump for reconsideration, while U.S. Secretary of State John Kerry is telling Japanese Foreign Minister Fumio Kishida that business groups in the U.S. will continue to push for the deal. Japanese officials say that they have been privately urged by Trump surrogates to remain calm and not to take Trump’s remarks literally.

However, in a YouTube video released Monday, 21 November, Trump said in his first 100 days in office, he would issue a notification of the country’s intent to withdraw from the TAPP. He called the trade deal “a potential disaster for our country” and said the U.S. would negotiate bilateral trade deals instead.

Contributing Editor reporting from Osaka, Japan

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