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Japan's Suga says a 'window' exists to for a TPP trade pact with the US despite Trump's no

"Trump’s Pox Americana"

Akiko Fujita Sunday, 22 Jan 2017 | 10:47 PM ETCNBC.com

VIDEO - The future of the US-Japan alliance

Sunday, 22 Jan 2017 | 6:16 PM ET | 03:34

Japan's Chief Cabinet Secretary conceded the Trans-Pacific Partnership (TPP) trade deal faces an uphill battle without the United States, even as Tokyo pressed other member countries to ratify the pact to keep the pressure on Washington, suggesting that Tokyo would work hard to convince President Donald Trump to rethink his stated opposition.

In an interview with CNBC, Yoshihide Suga, Prime Minister Shinzo Abe's top adviser said the Japanese government would properly assert itself in trade talks, to prevent a move towards protectionism.

"A TPP without the U.S. would be incredibly difficult, but we do have a window until 2018, when the treaty needs to be ratified," Suga said. "We believe we still have an opportunity to convince the U.S. about the importance of free trade."

Trump has already vowed to withdraw from the TPP in the first 100 day of his administration, [done] calling the pact "a potential disaster" for the U.S. In his inauguration speech, Trump reiterated his call for an "America first" policy, saying every decision on trade as well as taxes and foreign policy, would be made to benefit American workers and American families and has already moved to start potential renegotiation over the existing North American free Trade Agreement 104233449 (NAFTA).


Akio Kon | Bloomberg | Getty Images

Yoshihide Suga, chief cabinet secretary of Japan, speaks during a press conference.

Still, Abe, who has championed the regional trade pact, has pushed Japan to ratify the treaty, becoming the first of a dozen member countries to complete domestic procedures required for the pact last week.

Challenges over the TPP come, as Japan finds itself in the crosshairs of the new U.S. administration. Trump has singled out the country, alongside China and Mexico, for its trade deficit with the U.S. He's also targeted Toyota, threatening to slap the Japanese carmaker with a "border tax," if it moves forward with plans to build Corolla cars in Mexico. That has rattled Japanese lawmakers, who consider the U.S. Japan alliance a cornerstone of regional stability.

"Japanese investments into the United States top $410 billion and create 800,000 jobs" Suga said. "This is the reality of what's happening right now. As long as we convey that clearly, we believe that there will be a clear understanding on the economic front."

Analysts have pointed to a slight possibility that the TPP could proceed even without the U.S.

"I'm not saying it's going to happen, but there is a very remote chance we could have the other countries of the TPP saying 'let's go ahead,'" Alex Capri, a visiting senior fellow at National University of Singapore's business school, told CNBC's "The Rundown" on Monday. "There are some loopholes that would have to be closed, but it's possible."

He noted that the deal's other 11 parties may want to proceed as unlike most free-trade agreements, which tend to be shallow, the TPP was a deeper agreement addressing non-tariff barriers, such as intellectual property. Because the U.S. market was already very open and generally already had adopted such measures, these provisions would have impacted it less, he said.

"It's really the other 11 countries that would have benefited," he said, noting that if the deal goes forward without the U.S., American companies would be at a competitive disadvantage in the region.

VIDEO - North Korean threat has been elevated: Suga
Sunday, 22 Jan 2017 | 6:31 PM ET | 03:30

Trump has also called on Japan to shoulder more of the cost, when it comes to hosting the roughly 50,000 American troops based in the country, while suggesting the country arm itself with nuclear weapons. Suga has maintained that Japan pays more than half the costs. He said he discussed the importance of the U.S. Japan Security Treaty with National Security Advisor Michael Flynn, in a 90-minute meeting prior to the November election.

"I do believe the two countries can have an appropriate conversation about the role that Japan is playing in reality, including cost. We need to take this step by step," Suga said.

Japan faces increasing uncertainty in the region, following reports last week, that North Korean leader Kim Jong Un was preparing to test-launch an intercontinental ballistic missile, to provoke the new Trump administration.

Suga refused to comment on North Korea's weapons capability, but said the threat from Pyongyang had reached a new level, citing the significance of two nuclear tests last year.

"Up until now, the tests were conducted once every three years," Suga said. "We believe the situation is becoming increasingly dangerous. Amid that threat, our country, in addition to the U.S., and South Korea – the alliance must work together to counter this."

—Leslie Shaffer contributed to this article.

http://www.cnbc.com/2017/01/22/japans-suga-says-a-window-exists-to-for-a-tpp-trade-pact-with-the-us-despite-trumps-no.html

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Australia open to China and Indonesia joining TPP after US pulls out

Trade minister talks with Canada, Mexico, Japan, New Zealand, Singapore, Malaysia, Chile and Peru could salvage deal


A container is loaded on to a cargo ship at the Tianjin port in China. The Australian government
says it is open to China joining the TPP after the US pulled out. Photograph: Andy Wong/AP

Paul Karp @Paul_Karp

Monday 23 January 2017 16.21 EST
Last modified on Monday 23 January 2017 22.48 EST

The Australian government will push ahead for a Trans-Pacific Partnership trade deal without the United States and is open to Indonesia, China and others seeking to join the agreement.

The Australian trade minister, Steven Ciobo, made the call for countries to push ahead with a so-called TPP 12-minus-one agreement now that the US president, Donald Trump, has signed an order .. https://www.theguardian.com/us-news/2017/jan/23/donald-trump-first-orders-trans-pacific-partnership-tpp .. that the US will not join the deal.

On Monday evening, the prime minister, Malcolm Turnbull .. https://www.theguardian.com/australia-news/malcolm-turnbull , reportedly confirmed Australia’s commitment to the TPP in a phone conversation with Japan’s prime minister, Shinzo Abe.

At a media conference on Tuesday, Turnbull said there was no question that the US pulling out was a “big loss” for the TPP. Asked if TPP countries should push for China to join, Turnbull said there was “potential” for it do so.

“It is possible that US policy could change over time on this, as it has done on other trade deals,” he said, noting that Congress and the secretary of state, Rex Tillerson, were in favour of the TPP.

“There is also the opportunity for the TPP to proceed without the United States.”

--
Analysis What is the TPP and is it over? The Guardian briefing
Donald Trump says US will leave Trans-Pacific Partnership on his first day as president. What does it mean for a trade deal that took seven years to build?
Read more - https://www.theguardian.com/news/2016/nov/22/trans-pacific-partnership-guardian-briefing-tpp
--

On Tuesday Ciobo told ABC’s AM that a TPP with the US “can’t go ahead unless the US was to change its mind” but Japan, Australia and others wanted to hold on to the gains negotiated so far under the deal.

He said Australia had had talks with Canada, Mexico, Japan, New Zealand, Singapore, Malaysia, Chile and Peru to salvage the deal without US involvement.

Asked about China joining in the US’s stead, Ciobo said the original architecture enabled other countries to join.

“Certainly I know Indonesia has expressed a possible interest and there would be scope for China, if we’re able to reformulate it, to be a TPP 12 minus one [country] ... [and] for countries like Indonesia or China, or indeed other countries, to consider joining.”

Ciobo said there were a number of “competing factors” that would complicate a TPP 12-minus-one agreement, including that Mexico and Canada may first have to deal with Trump attempting to renegotiate the North American free trade agreement.

“It’s a moving space but it’s an important space – we must continue to pursue giving Aussie exporters the best chance, to get preferential access for Australian exports.”

Ciobo confirmed the Australian government had not done modelling .. https://www.theguardian.com/australia-news/2017/jan/22/trans-pacific-partnership-trade-officials-dont-know-it-would-work-without-us .. about the possible size of benefits under a TPP 12-minus-one agreement, because it had been a “hypothetical” until Trump signed the order.

He said the agreement was good for Australia because it improved access to markets including Canada and Mexico and lowered compliance costs.

--
The TPP wasn't killed by Donald Trump – our protests worked
Evan Greer, Tom Morello and Evangeline Lilly
Read more - https://www.theguardian.com/commentisfree/2016/nov/28/tpp-protests-mass-opposition-worked-trump-presidency
--

Asked whether the Turnbull government would push for parliament to ratify the TPP despite the US withdrawal, Ciobo said it would “keep that option alive”.

“We’re not going to be like [opposition leader] Bill Shorten and the Labor party and walk away from this deal because it requires a little bit of elbow grease.”

Labor supports the TPP in principle but has said it is pointless to consider it in parliament given the US’s withdrawal. It has come under pressure from its union backers .. https://www.theguardian.com/business/2016/oct/17/unions-at-odds-with-labor-over-trans-pacific-partnerships-negligible-benefits .. to reject the deal outright.

According to the final chapter of the TPP .. https://ustr.gov/sites/default/files/TPP-Final-Text-Final-Provisions.pdf , the trade agreement can go ahead only if at least six of its 12 original members have ratified the agreement, and if those six countries represent 85% of the combined GDP of all 12 countries.

It means the deal cannot come into force if the US or Japan fails to ratify the agreement because, between them, they represent 79% of the GDP of all 12 original signatories. Without the US or Japan involved there is no way for the remaining signatories to fulfil the 85% requirement.

On Tuesday Labor’s trade spokesman, Jason Clare, said Trump’s executive order “put the final nail in the coffin of the TPP”, declaring the deal “officially dead”.

In a statement Clare said the US decision “makes a mockery of all the nonsense we’ve heard from Malcolm Turnbull last week that he can change Donald Trump’s mind and that this legislation would help”.

Clare did not appear to put much stock in the possibility of a TPP 12-minus-one agreement, warning the TPP would “have no effect at all” without the US.

“It’s over. Donald Trump .. https://www.theguardian.com/us-news/donaldtrump .. has killed the TPP. It’s time for Malcolm Turnbull to wake up and move on, and develop a real economic plan for Australia.”

Ciobo said the Coalition would not walk away from “high-quality trade deals” and accused Labor of poor economic leadership.
https://www.theguardian.com/australia-news/2017/jan/24/australia-open-to-china-and-indonesia-joining-tpp-after-us-pulls-out