Japan and the United States disagreed on market access in talks on the sidelines of a Trans-Pacific Partnership (TPP) plenary session in Sydney, Australia. After meeting with U.S. Trade Representative Michael Froman on 27 October, Japanese Minister of State for Economic and Fiscal Policy Akira Amari said the finish line for their bilateral talks is not yet in sight. The Obama administration had hoped to conclude the talks by year-end, shortly after the November mid-term elections.
A “plenary session” includes all 12 of the negotiating parties: the Ministers and Heads of Delegation for Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The TPP negotiations began in 2005 with talks among Chile, New Zealand, Singapore and Brunei and have thence expanded to 12 nations. They cover a very broad range, including agricultural products, patent protections, investment access, and international arbitration.
Though the content of the negotiations has been kept secret even from the Congress, for the U.S. seafood trade, its most-likely impact would be an influx of farmed shrimp from Vietnam and Malaysia. Predictably then, the main U.S. seafood group opposing the TPP is the Southern Shrimp Alliance.
The countries that do not already have a free trade agreements with the USA 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.
Though Japan joined the negotiations late — in 2013 — the size of the U.S. and Japanese economies means that the main framework of the deal is likely to be worked out between the two countries. The main sticking point between them is protection of the Japanese agricultural sector. Japan is not competitive in agriculture, due lack of arable land, yet it wishes to maintain a certain level of self-sufficiency in food. Japanese politicians also needs to satisfy rural districts, which have disproportionate voting power as urbanization has not been adequately reflected by reapportionment of seats in the legislature. The United States insists that Japan should lower barriers to agricultural imports, but Japan wants to protect its domestic rice, wheat, barley, pork, beef, dairy and sugar industries.
Other parties are not pleased that Japan, as a late entrant, is now watering down the agreement with agricultural exclusions. New Zealand Trade Minister Tim Groser warned that a “sweetheart deal” between the U.S. and Japan could cause “immense disruption” to the broader TPP negotiations. Phil Goff, trade spokesperson of New Zealand’s opposition Labour Party said the late inclusion of Japan in the TPP negotiations was a huge mistake: “Japan was admitted to the negotiations on the basis of its agreement that the outcome of the negotiations would be high quality. If it can't meet that standard then it should opt out of the talks.”
Dairy represents about a third of New Zealand’s exports. The United States agrees that Japan should open its dairy market, but at the same time wishes to resist opening its own to New Zealand, charging that the unified export entity Fonterra is a specially privileged government-sanctioned monopoly.
In the United States, pork producers are leading the charge against special exclusions for Japan. The National Pork Producers Council, using a “slippery slope” argument, claims that Japan’s demands will lead other countries to demand exclusions, and will set a bad precedent for future similar negotiations with Europe in upcoming Transatlantic Trade and Investment Partnership (TTIP) talks.
The National Association of Wheat Growers, U.S. Wheat Associates, USA Rice Federation, the National Pork Producers Council and the International Dairy Foods Association said in a statement back in May that an alternative to accepting Japan’s terms is “suspending negotiations with Japan for now and concluding a truly comprehensive agreement with those TPP partners that are willing to meet the originally contemplated level of ambition.”
The TPP is not popular in Japan, but is seen as a necessary counter-balance, along with the forging of regional military cooperation, to China’s growing influence. Japan would therefore be reluctant to be left out.
