But what of the TPP? Vastly differing approaches in the US and Japan

By Briar Francis / 22 November 2016
4 min.

The Trans-Pacific Partnership Agreement (TPP) is a regional free trade agreement that has been negotiated by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, the United States and Vietnam. The TPP negotiations were concluded on 6 October 2015, the respective TPP countries undertaking the domestic legal procedures for the implementation of the TPP.

While the world recovers from the outcome of the US elections, all attention has been focused on the people of America and how the next four years will affect them.  Gradually, however, we are starting to see worrying projections on our feeds as to how the change in government will affect the billions of people in other countries who watched the presidential election unfold with bated breath.

For the TPP, Donald Trump’s election could spell an untimely death in what was a short life met with much uncertainty and disapproval.  Trump has long been a vocal critic of the TPP, citing concerns of job losses and the risk to the US’ political sovereignty.  The public in key polling states have largely supported his view.  Now, we see Republicans claiming the majority of seats in both the House of Representatives and the Senate, which under Trump’s leadership will likely bring the TPP under scrutiny with a fresh round of condemnation.

This prediction is in no way conjecture, as today Trump avowed to instigate withdrawal from the TPP “on day one”.

For countries of smaller political stature such as Japan, it is an understatement to say that Trump’s election could add a layer of hesitation to the mess that is ratification of the TPP.  The process in Japan in particular has to date been fraught with scapegoat delays and public backlash, namely in relation to frequent objections and suspensions during debate, concerns that too much was being decided behind closed doors, and accusations from opposing parties regarding the ethical integrity of key pro-TPP politicians.

However, despite the political turmoil both at home and overseas in which it was deliberated, the House of Representatives of Japan’s Diet passed the TPP and related legislation on 10 November 2016, just a day after Trump’s presidential victory was realised.  Under the Japanese system, the decision will automatically stand after 30 days, regardless of whether the House of Councillors votes in favour after further debate.  This means that Japan may be the first signatory to ratify the TPP.

On one hand, the hasty move could be seen as a positive indicator of the collective drive towards a more interdependent world economy.  Ratification by Japan of the TPP may trigger similar actions by smaller member states, and in fact the position of other member states at the moment appears to be to ratify the TPP and hope that the Trump administration has a change of heart.  However, the US’ actions will be largely dependent on President-Elect Trump’s trade policies, with all indications post US presidential campaign suggesting the Trump administration in Washington will not support the TPP.

On the other hand, the Diet may just have created more work for itself now that is the TPP nations are faced with complete withdrawal by America from the TPP as President-elect Trump signalled.  The writer’s view is that the US position reflects a broader attitude to the TPP amongst its signatories, and of interest will be how China responds to a more protectionist trade policy out of Washington and whether China can attract the TPP countries to the Beijing-backed Regional Comprehensive Economic Partnership. This is a development that will be keenly watched in the coming months.  

22 November 2016
Briar Francis
Senior Associate
Briar is a Senior Associate in our Intellectual Property and Technology practice.

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