TPP decision may come before upper house vote

Daily Yomiuri, Japan

TPP decision may come before upper house vote

23 December 2012

A decision on whether Japan will join the Trans-Pacific Partnership multilateral free-trade talks could come before the House of Councillors election next summer, which is considered the deadline for declaring participation in the talks, according to observers.

An agreement between the Liberal Democratic Party and New Komeito to form a coalition includes their stance on whether Japan will join the TPP negotiations.

"We want [the government] to participate in the TPP talks," a member of the Japan Association of New Economy—comprising IT and other companies—urged LDP President Shinzo Abe during a meeting Friday morning.

The final draft of the agreement, set to be finalized Tuesday, says the new coalition government "will explore the best way of serving national interests regarding the TPP."

An LDP member involved in policy research said, "The expression ’serving national interests’ can be interpreted either as promoting or opposing [the TPP]."

In its campaign pledges for the recent House of Representatives election, the LDP said it "opposes taking part in the talks as long as the TPP is premised on abolishing tariffs without exception."

Some observers believe the LDP is subtly shifting its stance because the time limit for the nation to declare its intention to participate in TPP talks is approaching.

Komeito also took a cautious stance toward the issue in its campaign pledges, saying national debates have not been fully undertaken.

The TPP pact is a multilateral economic framework to promote development of the Asia-Pacific region by eliminating or reviewing tariffs and reforming trade and investment rules for participating countries. So far, 11 countries, including the United States, Australia, Canada and Mexico, have started negotiations aimed at reaching an agreement by the end of next year.

The summit meeting at the Asia Pacific Economic Cooperation to be held in Indonesia in October is expected to serve as an opportunity to finalize an agreement.

For Japan to join the TPP talks, it must adhere to the U.S. Congress’ so-called 90-day rule, according to which a U.S. administration must notify the U.S. Congress of its intent to enter into such negotiations at least 90 days before commencing them and obtain Congress’ approval.

If Japan declares its participation in TPP talks after the upper house election next summer, it would likely be unable to participate in negotiations for the agreement to be concluded in October due to the 90-day rule. It is thus believed the upper house vote will serve as a deadline to declare its intention to participate.

The longer Japan puts off its decision on the issue, the more likely it will have to accept rules that are unfavorable to it after other countries proceed with establishing trade and investment rules.

As some of the LDP’s strongest supporters, including the National Federation of Agricultural Co-operative Associations, strongly oppose joining the TPP pact, declaring participation before the upper house election could affect the LDP’s election race.