WASHINGTON — The United States on Friday approved Japan's entry into negotiations on the Trans-Pacific Partnership, a critical step for Tokyo's inclusion in a regional trade pact that underpins the Obama administration's efforts to boost exports to Asia.
To smooth the way, Japan offered confidence-building steps to the U.S. in the contentious automotive and insurance sectors, and on other non-tariff measures, but further negotiations in parallel with the TPP talks will be needed to iron out differences.
The Obama administration will now notify Congress of its intention to invite Japan in, launching a 90-day consultation period. The Center for Strategic and International Studies think tank said the administration was counting on support from most Republican members and enough Democrats to overcome resistance, particularly from House members representing automotive interests.
Both Democrats and Republicans, particularly from the auto-producing state of Michigan, were quick to voice stiff opposition to Japan joining. Some other lawmakers voiced support.
Republican Rep. Dave Camp, chairman of the powerful House Ways and Means Committee Committee, said he would not endorse Japan's participation without assurances it wouldn't diminish the scope of the negotiations or delay the goal of concluding the TPP negotiations this year – already viewed as a tough deadline.
"The bottom line is Japan must address its longstanding tariff and non-tariff barriers to U.S. exports – in particular on autos, insurance and agriculture," Camp said.
The other 10 nations negotiating TPP also have to endorse Japan's participation. Tokyo is looking to join the next round of TPP negotiations in July.
The pact aims to reduce duties on a wide range of goods and services and ease regulatory and other non-tariff barriers to trade. Acting U.S. Trade Representative Demetrios Marantis told reporters Japan's entry into the pact will help promote it as "the most promising pathway to achieving a free-trade area in the Asia-Pacific."
Japan is the world's third-largest economy, and the U.S. aside, its GDP exceeds the combined total of the other participating nations: Australia, Canada, Malaysia, Mexico, Vietnam, Chile, New Zealand, Brunei, Singapore and Peru. If Japan is admitted, the TPP countries would account for nearly 40 percent of global GDP and about one-third of all world trade.
China, the world's second-largest economy, is not taking part.
Japanese Prime Minister Shinzo Abe announced his country's intent to join TPP just a month ago as part of efforts to revive a long-slumbering economy. But he still faces considerable domestic opposition to the pact, not least from Japan's heavily subsidized farmers, who are a traditional bastion of support for the ruling Liberal Democratic Party.
Friday's announcement, which was welcomed by the U.S. Chamber of Commerce, follows 18 months of consultation between the U.S. and Japan that began when the country's previous prime minister expressed its initial interest in the TPP.
Sen. Orin Hatch of Utah, senior Republican on the Senate Finance Committee, said Japan's entry into negotiations would represent a historic opportunity to open up one of the world's largest export markets where American products have faced barriers for decades.
But Democratic Sen. Debbie Stabenow of Michigan warned she would urge the president and Congress not to ratify the trade agreement unless Japan stops blocking U.S. companies. She said Japan exports 120 automobiles to the U.S. for every American vehicle sold to Japan, and the U.S. trade deficit with Japan is $76 billion, higher than with any other nation except China.
Friday's statement said that Japan has agreed to more than double the number of motor vehicles eligible for preferential imports. That got short shrift from Michigan Rep. Sandar Levin, ranking Democrat on the Ways and Means Committee. He said it was a "meaningless gesture" as U.S. automakers have not even been fully utilizing the existing quota.
The U.S. and Japan have agreed to address further issues in the automotive sector and on non-tariff measures in separate bilateral negotiations that will be conducted at the same time as the TPP talks. Marantis said the U.S. will not be able to "close" with Japan on the TPP unless it can finalize these parallel negotiations, too.