Just prior to U.S. Vice President Pence’s visit to Tokyo on Tuesday 18 April, 2017, Japan announced that it will push forward with the Trans-Pacific Partnership (TPP) agreement among the 11 remaining parties. The move is significant in that Japan is now the largest economy among the 11 remaining parties and any progress forward with the agreement would require Japan’s participation and leadership.
According to the Nikkei news article, one of the reasons Japan wants to move forward with the TPP is that it was given a green light by the United States and confirmed that President Donald Trump would not object to TPP negotiations among the 11 remaining members. Additionally, Japan still hopes that the United States comes back to multinational negotiations rather than bilateral ones.
If Japan continues to take this leadership role in pushing forward with the TPP, it would be consistent with the joint statement released after Prime Minister Abe and President Trump met in New York in February. The joint statement said that (1) the US and Japan would explore bilateral discussions, and (2) Japan will continue to advance progress on its existing initiatives (i.e. TPP). However, the security concerns over North Korea, as reported by the Wall Street Journal, could overshadow Japan’s efforts on trade.
In our view, it is highly unlikely that President Trump will backtrack on his TPP withdrawal, one of his signature issues during the presidential campaign. However, pursuing bilateral negotiations with individual TPP countries could arrive at a very similar outcome, even if it would take the United States longer to achieve a similar result and would result in multiple trips to Congress for legislative approvals, never an easy undertaking. But with or without the United States, and as reported in Politico, the TPP will likely form the basis of a standardized bilateral trade agreement framework – data protection and e-commerce provisions being among a few of the TPP provisions that will likely be used in future bilateral agreements. If the TPP is approved by the remaining 11 nations, the TPP could become the new global standard for such agreements simply by default.
We look forward to monitoring the progress at the next meeting of the remaining 11 parties that will take place in late May in Vietnam.