Japan Looking to Push TPP With 11 Remaining Members

The Japanese government is looking to implement the Trans-Pacific Partnership (TPP) free trade agreement among 11 remaining signatories after U.S. President Donald Trump pulled the United States out of the sweeping treaty earlier this year.

Japan had been cautious about moving ahead with the TPP without the U.S., but changed its position as it became clear the U.S. was unlikely to ever return to the fold. The shift to prioritizing implementation of the multilateral deal can also be seen as a pushback against U.S. pressure to negotiate a bilateral trade pact.

The TPP was signed by 12 nations in February last year. However, Trump announced shortly after his January inauguration that he would take the U.S. out of the treaty, putting the pact’s future in doubt. The administration of Prime Minister Shinzo Abe had previously indicated it was waiting for the U.S. to return. However, during economic talks with Japanese Finance Minister Taro Aso on April 18, U.S. Vice President Mike Pence declared that “the TPP is a thing of the past for the United States of America,” and made a clear push for a bilateral Japan-U.S. trade deal.

Japanese government figures are deeply worried that the U.S. would use bilateral trade negotiations to push for even greater access to Japan’s agricultural sector than Tokyo has already accepted under the TPP. With the Pence visit, the Japanese government confirmed that a U.S. return to the TPP was unlikely in the extreme. This led to the strategic pivot to pushing for implementation of the treaty by the remaining 11 signatories while waiting for the U.S. to reconsider. At the same time, Japan currently plans to avoid bilateral trade talks with the U.S.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza