Japan’s decision to enter the talks comes at a time when its economy has been struggling to gain momentum.Its growth has been hurt by a decline in demand for exports from key markets as well as a subdued domestic demand.Analysts said that a trade pact such as the TPP would open up growth opportunities for Japanese businesses and give them easier access to these markets. […]According to Mr [Martin] Schulz [an economist at Fujitsu Research Institute in Tokyo], if Japan, the world’s third-largest economy, eventually joins the TPP, the group would account for nearly 40% of total global economic output.
Japan joining the TPP discussion is important to the United States. Last month, when Shinzo Abe visited the White House, President Obama made it clear that Japan would not have to agree to abolish all import tariffs before joining the TPP discussion. This was important to Abe. Japanese farmers, who form an important part of Abe’s base, objected to lifting tariffs on agricultural products.Creating a free trade zone in the Pacific is one of Washington’s core goals for the Asia-Pacific region. In many ways, America wants Asia to look more like Europe: integrated, cooperative, peaceful and prosperous. The TPP, with Japan on board, is an important step in that direction.And there is another feature that is widely noted in the region: China hasn’t been invited to the party. The United States, Japan and a group of other countries are developing a new trade architecture that leaves the PRC, for now, out in the cold. Japan’s decision to join a US-hosted negotiation that doesn’t include China is probably more important as a geopolitical statement than a trade move.