Brief information on TPP in Japan #23

24 July, 2012
By Yasuo Kondo

Both Matthew Goodman, Simon Chair in Political Economy of CSIS and USTR Cutler seemed to suggest early start of congressional procedures for Japan’s participation in the TPP negotiation be not likely. Both Japan and the US are entering into delicate political situations.
EU started on 18 July consultation with member countries on the start of EU/Japan EPA negotiation.
After failing to adopt joint statement of foreign ministers at ARF, Indonesian Foreign Minister worked hard to recover from political split in ASEAN ending with “Six Principles” to negotiate with China on the South China Sea.
<Clippings from The Nikkei Newspaper>
1,July 16 edition:

Matthew Goodman, former White House Coordinator for APEC and now Simon Chair in Political Economy of CSIS said the best timing for Japan’ announcement to join TPP would be in September.
Obama Administration still expects the close of TPP deal by the end of this year, but it might be postponed to early next year. Japan has some more time before the deadline for its official announcement to join the TPP, but not much. TPP is mutually beneficial for the US and Japan in terms of economic growth, and has a strategic meaning giving a strong message to Asia. Washington knows that demands from US car makers are outdated and general atmosphere in Washington is favorable to Japan. If PM Noda overcomes the political split at home and tells his message to President Obama when he visits the US for the UN General Assembly, President Obama will be able to start the congressional procedures if not before the election.

2,July 17 edition:
Japan to station a self-defense official at the Pentagon.
The self-defense officials have already been stationed at the Central Command in Florida and the Pacific Command in Hawaii, but not at Pentagon. The assigned official will be a Major from the Air Force at first and will be increased in the future.
It is expected to strengthen smooth cooperation against the growing Chinese presence and North Korea, but is also expected to ease the burden of US forces under budget reduction.

3,July 18 edition:
Import control of US beef to be eased as early as in November, a possible progress for the Japan/US prior consultation in TPP.
The Food Safety Commission will present the proposal at its specialist meeting on 24 July, then collect public comments and submit the report to the Ministry of Health, Labor and Welfare to be decided. If the proposal is approved, US beef of thirty months of age will be imported. Market share of US beef out of total beef import was decreased to 19% in ’10 comparing to 69% market share by Australian beef. The ministry only states the decision will be subject to scientific grounds.

4,July 19 edition:
A. EU started discussion on Japan/EU EPA with member countries yesterday.
Trade Commissioner Karel De Gucht emphasized that as far as the economic growth center was Asia, EPA with Japan was indispensable. Germany and France are cautious pointing out that if the benefits are not assured, they cannot be positive. Chairman of ACEA and CEO of FIAT said “FTA works against EU members.” Since the enforcement of the EPA with Korea in July 2011, car import from Korea increased to 150%, while export to Korea only to 113%. Chemical industry supports the EPA with Japan in general, but demands Japan to withdraw non-tariff barriers as a developed country.

B. The Bangkok Post criticized the failure by ASEAN Foreign Ministers to agree on the joint statement.
It pointed out the Foreign Ministers violated the interest and unity of ASEAN itself by justifying neutrality between ASEAN and China in relation to the dispute in the South China Sea.

5,July 20 edition:
Japan and Turkey agreed to start the joint study on EPA and to hold the regular Ministerial Meeting annually.

6,July 21 edition:
ASEAN Foreign Ministers somehow restored from internal split by agreeing on the “Six Principles.”
Indonesian Foreign Minister started with his visit to his Filipino counterpart to reunite ASEAN’’s position on the South China issue. And the ten countries agreed on the “Six Principles” such as settlement on the plan of the model conduct with legal binding in the South China Sea which ASEAN would negotiate with China, peaceful settlement of disputes based on international laws and others.

7,July 22 edition:
Wendy Cutler, Assistant US Trade Representative was interviewed by the Nikkei saying “No specific deadline for the US/Japan prior consultation, The Obama Administration still seeking to close the TPP deal by the end of this year, The US and Japan are both in delicate political atmosphere and etc.”
Referring to the interview, Nikkei reports;
 That USTR is not rushing to conclude the prior consultation with Japan and emphasizes it is up to Japans decision. That USTR suggested further progress in insurance, beef and car be required.
 That political situation in the two countries may not be favorable to start the congressional procedures for Japan’s participation before the presidential election.
(Summary of the interview: Original wording in English not available.)
Nikkei: How do you foresee the timing of Japan’s participation in the TPP negotiation?
Cutler: There is no certain dead line for the prior consultation with Japan. We have seen some progress but there are still a lot of deals to be agreed on. Other countries are waiting for the decision by Japan. We all know of arguments going on in Japan.
Nikkei: What are the benefits of TPP?
Cutler: Japan is an important trade partner and strategic partner. Its participation will provide various opportunities and we can together advance economic integration in Asia. TPP will help Japan enter into Asian market more efficiently and will provide an opportunity to create diversified supply chains. It will create more employment,too.
Nikkei: What do you say to strong oppositions in Japan?
Cutler: I was surprised to know of a lot of misunderstanding in Japan like medical issues in particular. It is not true that the TPP will force Japan to renounce the public medical insurance system. It is important to discuss based on correct information.
Nikkei: It is predicted that congressional consultation on Japan’s participation before the presidential election will be difficult.
Cutler: There are some people concerned about Japan’s participation both in the US and Japan. And both sides have delicate political agenda. But we are engaged in the deal with confidence that Japan’s participation is meaningful for TPP itself, for the US and Japan and for the region.
Nikkei: Import control of US beef seems to be in progress.
Cutler: We have requested Japan decide and ease the control based on scientific grounds. We are waiting for the conclusion by the Food Safety Commission and expect the market will be opened to US beef.
Nikkei: What about the progress in the insurance?
Cutler: US insurance companies demand KANPO life insurance, a group affiliate of Japan Post to freeze introduction of new insurance items. And we are encouraged by the words of CEO of Japan Post and of the chairman of the privatization commission suggesting it be difficult to enter into the cancer insurance market. But, we expect more definite words.
Nikkei: What about automobile issue? Japan claims the market is fully opened.
Cutler: The market share of imported cars is very low. Tariff alone doesn’t prove the market is fully opened. We believe there are non-tariff barriers such as standards, certification, distribution channels and etc.
Nikkei: Is it possible to close the TPP negotiation by the end of this year, which President Obama strongly expects?
Cutler: The goal is to close as early as possible.
<Anti-TPP activities update.>
Japanese civil coalition start discussion on rallies toward next round and /or any sudden announcement of participating in the TPP by the Noda Administration. The followings are being considered.
As general election is likely anytime after the recent political disorder and mid August is the season lawmakers have some functions at their electoral districts, we are planning to approach as many lawmakers as possible nation-wide to push them to stand against TPP.  
Mr. Yamada and his group are considering an assembly among lawmakers sometime late August or early September. And we, the civil coalition are considering a joint rally with them. Periodical street rallies are also being considered.
Lawmakers restarted seminars open to the public inviting issue experts and government officials will continue their program. Recent topics are issues discussed at Japan-US prior consultation.
We, People’s Action against TPP also started a series of seminars, the first seminar held 23 July was on IP and the room was full.