Obama in Japan – he came, he saw but did he conquer?

by | Apr 30, 2014 | Uncategorized

The verdict on President Obama’s visit to Japan 23-25 April is still out.  Touted as a chance to bring new momentum to the seemingly never-endingTrans Pacific Partnership (TPP) negotiations, the White House immediately claimed a major breakthrough while the Japanese said nothing had been achieved (apart that is from some comforting talk about Japan’s security and a great sushi dinner).

Niceties aside it was clear some hard-working officials put in a lot of hours around this visit. TPP negotiators met around the clock right up to and even during POTUS’ time on the ground.  Comments from American officials suggested that the work focused on the five sensitive (in Japanese “sanctuary”) areas of rice, beef, pork, dairy and sugar which are holding up conclusion of a bilateral market access deal as an important piece of the TPP end game.  A lot of work was apparently done on the highly complex Japanese tariff to work out the scope of a future package.

A generous interpretation is that this is all good stuff, and necessary for a future deal to be reached.  It suggests that the US and Japan are getting down to brass tacks and working out where the scope for compromise might lie.  A less generous interpretation is that the compromise might imply a lessening of ambition.  On the heels of an under-achieving Australia FTA, which set a low benchmark for tariff elimination, Japanese negotiators may have succeeded in identifying if not whole sectors, then some product lines within sectors, that might not be subject to TPP’s liberalizing force.  American negotiators may have been successful in ratcheting up the Australian outcome in specific areas of interest to them.

All of this is pure conjecture because no-one is saying much publicly.  This is a negotiation after all that is still in full swing. The Japanese press is reporting understandings that the beef tariff may be reduced over time to 9 percent – not exactly zero but well done from the 38.5 percent currently applying and better than the 18 percent the Aussies achieved.  Dairy tariffs may also be reduced through specific tariff quotas.

The big unknown at present is how these arrangements might be passed onto other suppliers including New Zealand.  TPP is meant to contain a “single market access schedule” implying that all agreements reached bilaterally are then applied to others.  But neither the Americans nor the Japanese have been entirely clear about this since this alternate track bilateral process was established to get Japan over the line on TPP membership.

TPP Chief Negotiators, meeting in Ho Chi Minh City 14-15 May need to be clear on this point:  TPP is a plurilateral agreement amongst twelve members not a series of bilateral deals stapled together.  That’s the only way to address the “noodle bowl” of overlapping and sometimes conflicting agreements and build “high quality, ambitious and comprehensive” agreement fit for the 21st century.

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