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Trade Winds
Tokyo to Trump: Let’s Make A Deal

President Trump’s withdrawal from the Trans-Pacific Partnership (TPP) has already set off a high-stakes competition among Asian countries looking to advance their own trade agendas in the absence of U.S. leadership. But Japan has not quite given up on bringing Washington back into the free trade fold. The Wall Street Journal reports:

Prime Minister Shinzo Abe said Thursday he was willing to consider two-way trade talks with the U.S., a response to President Donald Trump ’s decision to withdraw the U.S. from the 12-nation Trans-Pacific Partnership.

In pulling out of the TPP, an agreement Tokyo had ratified in December, Mr. Trump said he preferred to conclude two-way deals with trading partners.

Asked about this in parliament on Thursday, Mr. Abe said he still hoped to persuade Mr. Trump to change his mind on TPP, but that “doesn’t mean Japan won’t hold bilateral free-trade talks with the U.S.”

Abe is clearly keeping his options open, including the faint hope that he could convince Trump to do an about-face and rejoin the TPP. Given the apparent centrality of protectionism to Trump’s governing agenda, that is a long shot. Alternatively, Abe may hoping that Japan could keep the TPP framework together, and open for a more free-trade-friendly future U.S. administration to join at a later date.

Of course, the most likely outcome is a bilateral trade deal, which would play to Trump’s own stated preferences and help Abe save face. The Japanese PM has staked a great deal of political capital on the pursuit of TPP, a key component of his “Abenomics”. After taking on Japan’s agricultural lobby and pushing through controversial structural reforms to get his country ready for TPP, Abe needs something to show for it. A bilateral deal with the United States will have to do.

This is not to say that the negotiations will be easy, or that a deal is a foregone conclusion. In a meeting with top auto executives this week, for instance, Trump complained about the Japanese auto industry’s supposedly “unfair” practices of flooding the American market with cars. By contrast, one of Abe’s key priorities going into negotiations would be to preserve the TPP provision that lowered U.S. tariffs on those very cars.

However these negotiations play out, Abe’s latest comments suggest Japan is not ready to cede the trade agenda to China, as many other TPP members appear ready to do in the wake of the pact’s collapse. Given its strategic interest in containing China, Japan may prefer a series of painstaking bilateral trade negotiations to a ready-made Chinese alternative that could empower Beijing.

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  • Dhako

    Again, like your previous take of the Asia-Pacific political reality, you are yet to understanding the “political nuances” of this region. And by that I mean, Mr Abe had staked everything he ever had, politically, on the TPP. And what is worse he had put his political capital on the line by convincing countries like Vietnam, Philippines, Malaysia, that the TPP will not abandon, regardless of who is running the show in Washington. And yet without consulting any nation in that region the first thing, Mr Trump, have done was to kick this political “trust” in which these countries had place on the American’s shoulders to touch down without so much of even a verbal apology along the way (from Trump), which could at least make the “political injury” these nations have sustained from that kick of his as something they can explained away to their political constituency. After all, just like the US (and like any other nation), these states have their own political reality in which the leaders are judge. And when, like now, these leaders get kick in the teeth by the likes of Mr Trump (with no second thought as to the consequences for these nations) then, the political elites of those nations notice that, and would treat those who received the kick as indicative of their political impotence and most importantly their misjudgment in taking American’s verbal assurance as something worth banking on.

    And in the case of Mr Abe, not only are his political local opponents sensing “blood” in the water (in-terms of how reliable he is in his judgement, and how important is he on the American’s scale of importance), but, he also lost whatever credibility he had in his region, since he was almost evangelical in talking up the TPP and how the American (regardless whether it’s Republican or Democrats, in the White-House) could always be rely on to see things of the TPP kind in the same way, he saw it, in-terms of its importance. Hence, he lost both counts, namely, he lost crucially to his constituency in-terms of what his judgement is worth. Also he lost in the region, in which he used to preen around, as if he is the “American’s interpreter” of what Uncle Sam will do and won’t do. And, now, since, his self-appointed role of trying to pass himself off as the “political bridge” that connects this regions to the US, has collapsed, then, now he is essentially will find himself as not being taking serious by the pragmatic leaders of these region, particularly the likes of Malaysia, Philippines, and most importantly, in Vietnam. Hence, his sole agenda at the moment is sure up his “local credibility”, particularly some of the powerful conservative interest group, who were never too keen on the some of the reform in which the TPP have demanded from their side. And, now, since all that sacrifice in which they have “swallowed” on the account of Mr Abe saying he knows the American better than anyone else, and they will do what they have promised to do so, has turn out to be so much of pure guff, then, her is trying to lost whatever political currency he has, so that, his other agenda of creating a decent growth doesn’t go down with this monumental kick-in-the-teeth, he had received at the hand of the American.

    In conclusion, what Mr Abe is doing is basically playing to the gallery, as if he has still some leverage with the American, lest the rest of his agenda is discarded by his political enemies, given the fact, if he is considered as a lame-duck, politically, who couldn’t delivered what he swore everything he had that he will bring, then, what that will mean is that, the rest of his political agenda will go gets flushed down the toilet for lack of political credibility in the eyes of his peers and opponents. So, talking up this bilateral free trade is his way of saying that he has still some “cards” to play with the Americans, and he is not out of contention when it comes to counting who in Tokyo could be considered as a politician who can deal and being taking serious by the likes of Mr Trump back in Washington. Also, he is trying to salvage what could be salvage in his old persona which was the American’s “interpreter” in the region. And he is trying to do that, so that the likes of Vietnam (who he had made lots of promises about American’s dependability) and Malaysia, who although, Obama did everything he can to schmooze them for the TPP, but it was Mr Abe who really “clinched” the political assent from the Malaysian’s Prime-Minister towards the TPP, will not, collectively, lose their political fortitude in sticking with what he told them about American’s final word and what is worth. Hence, what is doing is to say (particularly to these nations) that, the TPP may be dead, but, still, I can sweet-talk the likes of Mr Trump to see the good-side of a bilateral free trade between Japan and US. And, after words, once he “swallow” this bait, we can work on him few years down the line in convincing him to “revisit” this TPP deal, even, if by then we call it something else.

    In other words, he is basically promising something that he is not in a position to deliver in the hope of those who are stampeding to the Chinese door, will pause in a moment of reflection, and perhaps will not be too hasty in reaching out to China. Which means, it’s like a man who is watching his team losing the match, but still, due to shear chutzpah, will keep on telling his friends in the stand with him, who are “innocent folks” he drag them to the bookies so that they have bet heavily this teeming winning the day, that any time time now in this extra-time, the team will win it and score unbelievable number of goals. Hence, make what you will about the prospects of Mr Abe convincing these states to loiter around the carcasses of the dead TPP in the hope that in few years time, he will work some magic on Trump as well as on the TPP, in which he will resurrect it.

    • Psalms564

      OMG Becky, look at her butt!!! It is like so big, she looks like of those rap guys girlfriends? But who understands those rap guys???

      • Dhako

        You need to take your medication, my friend. Or preferably lets hope you will soon find some decent lunatic asylum that can treat you, which in turn is still covered under ObamaCare before GOP gets to dismantled it the whole thing.

  • Jacksonian_Libertarian

    The US is by far the worlds largest consumer nation. The only reason these Asian Nations were negotiating was because they wanted to make sure they had a trade advantage against the US. Trump will get them one on one, and get an equal and fair deal which will increase trade, but not at the expense of America’s working class.

    • Dhako

      I think you will find these Asian states will not be running towards what Trump will be offering (apart from Japan, perhaps, who has no other option other than to toe the line with America). Secondly, you will find, that, the lost of these trade deal (i.e., TPP) will impact heavily the US’s tech companies, who were counting this deal to open more level-playing field in this region, particularly in hope of getting IPs protection being made as one of the main regulatory aspects of the TPP. And finally, you find out soon enough, that collectively the consumer market of this region is far bigger and much more dynamic than what the US’s internal market could provide. Hence, the reason most US’s tech companies consider this region as to where the prosperity of the 21st century will be made or unmade. And one more word to good, is to say to you that you really need to spend some time in this region so that you will realize how the Chinese are sawing up every sector of it without any major competition from anyone else. And now that, the Americans have decided to take their ball and go home (as it were) in the form of abrogating their own deal which they have put it together, then, the Chinese will have double incentive to ensure no other free trade agreement will ever work in this region other than their own. And if you think that is something the Americans don’t care we shall see soon enough as to who will be missing out the prosperity of a dynamic region. But, then I suppose, I saw your sometime pontificating that the Chinese don’t have any world class consumer high-tech companies that are recognized around the world. And then I realized, perhaps, like most Trump’s supporters, you have yet to understand what globalization have wrought and why it’s impossible to put the genie back into the bottle. So, I am not holding my breath for you to understand how monumental “own goal” this act of Mr Trump will be considered in the annals of trade history.

      • Psalms564

        I wanna get withcha, I want cuss or hitch ya, but I gotta be straight, I like OOOOOH to the break of dawn baby got it going on I know the censors won’t like this song. Some fellas like to hit and quit it, while I rather stay and play ’cause I’m long and I’m strong and I’m down to get the friction on. So ladies? YEAH Ladies? Yeah Wanna get a ride in my Mercedes? YEAH So turn around, stick it out, even white boys gotta shout Baby got back!!!

  • Psalms564

    So what’ wrong with bi-lateral trade agreements? I never understood this obsession with multi-country deals. There’s nothing that can be done in a multi-country deal that cannot be done with different bi-lateral deals. Every country is special and has special needs and concerns.

    • Dhako

      If you know anything about “aggregate of scale”, you would have known that a free bilateral trade deal between US and Mexico alone is less beneficial to US and to Mexico, than a free trade agreement that encompass USA, Mexico, and the rest of South America states, if such a multilateral agreement could be negotiate across the whole of Americas continent. But then again, little birds tell me that since you are an avid Trump supporter, then little knowledge about how modern trade relationship works is given with you. Hence, I shan’t judge you rather too harshly in her now. Lets hope you will spend some time in reading international trade literature before next time around you exposed yourself in this way.

      • Psalms564

        Yes, if you ignore the exponentially increasing complexity of multi-lateral trade agreements than you are right. In short, if you focus on benefits and not on the costs, then things appear beneficial. That is some profound insights you got going there chief.
        While we are on the topic, I too have a brilliant idea. All we need to solve the whole global warming problem is to master nuclear fission. That’s it. I mean, just go get to it

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