TOKYO, Nov 10, (Agencies): Japan’s lower house of parliament on Thursday passed the contentious Trans-Pacific Partnership (TPP) free trade deal, a move largely viewed as an empty gesture due to opposition by US president-elect Donald Trump.
US President Barack Obama championed the 12-nation deal saying it would enable the United States to set the global trade agenda in the face of China’s increasing economic clout.
But Trump has strongly opposed the deal, casting a huge shadow over its future.
Besides Japan and the US, the TPP includes 10 other countries: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. If it came into full force it would account for an enormous 40 percent of the global economy.
The TPP is seen as a counterweight to China, as Beijing expands its sphere of influence and promotes its own way of doing business — seen as often running counter to largely Western-set global standards that emphasise transparency and respect for human rights and the environment.
Japanese Prime Minister Shinzo Abe has made the TPP a pillar of his economic platform to revive the nation’s key exports sector.
But experts say that with Trump’s election the deal is a non-starter.
“Japan’s hopes for the TPP (are) dead and buried,” Marcel Thieliant, economist at Capital Economics, said in a note.
“The upshot is that the long-term losses for Japan from the TPP not coming into force are substantial.”
Trump says he is in favour of free trade but that existing deals, such as the North American Free Trade Agreement between the US, Canada and Mexico, have not been fairly negotiated and don’t serve US interests.
The White House has warned that failure to approve TPP would put billions of dollars in US exports at risk to competition from China.
China will seek support for a Beijing-led Asia-Pacific free trade area at a regional summit in Peru later this month, Chinese officials said on Thursday, after Donald Trump’s US election win dashed hopes for a US-led free trade pact.
During his election campaign Trump took a protectionist stance on trade issues and labelled the Trans-Pacific Partnership (TPP) championed by President Barack Obama a “disaster”. There is now little chance of it coming up for vote in Washington before his inauguration in January.
Obama had framed TPP, which excluded China, as an effort to write Asia’s trade rules before Beijing could, establishing US economic leadership in the region as part of his “pivot to Asia”.
Briefing journalists ahead of President Xi Jinping’s departure for the Asia-Pacific Economic Cooperation (APEC) summit in Peru from Nov 19-20, China’s Vice-Foreign Minister Li Baodong warned of the rise of protectionism and said the region needed a free trade agreement as soon as possible.
“Trade and investment protectionism is rearing its head, and Asia-Pacific faces insufficient momentum for internal growth, and difficulties in advancing reforms,” Li said.
“China believes we should set a new and very practical working plan, to positively respond to the expectations of industry, and sustain momentum and establish a free trade area in Asia-Pacific at an early date,” Li said.
US Senate Majority Leader Mitch McConnell on Wednesday dashed any remaining hopes that US President Barack Obama’s signature Pacific-Rim trade deal would come up for a vote before President-elect Donald Trump takes office in January.
“It’s certainly not going to be brought up this year,” McConnell said of the 12-country Trans-Pacific Partnership (TPP) at a news briefing in Washington.
McConnell said any decisions on TPP or other future trade agreements would be up to Trump, who would still have the authority for four more years to negotiate “better deals” with expedited approval procedures in Congress.
Trump excoriated TPP on the campaign trail as a “disaster” and “a rape of our country,” tapping into populist anger at globalization, trade and manufacturing job losses that helped propel his candidacy.
In an opinion piece published on Monday, Trump advisers Peter Navarro and Alexander Gray reiterated his opposition to major trade deals.
“Trump will never again sacrifice the US economy on the altar of foreign policy by entering into bad trade deals like the North American Free Trade Agreement, allowing China into the World Trade Organization (WTO), and passing the proposed TPP,” Navarro and Gray wrote in Foreign Policy magazine. “These deals only weaken our manufacturing base and ability to defend ourselves and our allies.”