Recently, the trade talks between United States and Japan over the Trans-pacific Partnership (TPP) concluded without any result. Both criticized each other for not doing enough in terms of reducing import limits. Specifically, two problems were Japan’s so-called “sacred” farm subsidies and resistance on part of the US to decrease import limits on certain products. Japan’s market access regime towards US automobiles was a major point of dispute between the two nations.
There are others who claim that the failure was centered on “absentee leadership” on part of United States.
Washington Post writes:
“The main reason is the lack of trade leadership in Washington. Mr. Obama has been ambivalent about trade during most of his tenure. And Senate Majority Leader Harry Reid earlier this year blocked authorization for Trade Promotion Authority that would guarantee an up-or-down Congressional vote on trade deals without amendments. Democrats figure this plays well with their union base as they try to avoid large midterm election losses.”
There are two interesting points here.
First, Mr. Obama’s top economic advisers, including Commerce Secretary Penny Pritzker are continuing to push for finalization of the pending deal. Secondly, it is important to remember that all this isn’t new for Mr. Obama. There were many who had criticized his inertia regarding this issue during his first term as well. This is significant because, as FP reports, “Americans strongly favor increasing trade with both Japan (74 percent), the largest economy among the prospective members of the TPP, and the European Union (72 percent).” In terms of legislative strength, 59 percent of Democrats back the trans-Pacific accord.
There is absolutely no question that the TPP is of immense importance to the US. It would like to take this initiative to establish its presence in the region and prolonged delay increases the risk of loosing out to other “competitors” in the market. “If we don’t set the rules for trade in a significant part of the world, then our competitors are going to do that,” Secretary Pritzker said.
Those who had pinned their hopes on Mr. Obama’s visit to Tokyo would indeed be very disappointed.