Levin, Stabenow Consider Possible Terms For Japan Joining TPP Talks

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Inside U.S. Trade - 03/22/2013

Levin, Stabenow Consider Possible Terms For Japan Joining TPP Talks
Posted: March 21, 2013

House Ways and Means Committee Ranking Member Sander Levin (D-MI) and Sen. Debbie Stabenow (D-MI) -- both of whom are extremely wary of the notion that Japan could join the Trans-Pacific Partnership (TPP) talks -- this week signaled that they are nonetheless starting to think through how the addition of Japan should be handled if and when TPP partners agree to allow Japan to join. At a March 20 press conference, Levin stressed that the most important question is "whether and how" Japan could join the talks. Prime Minister Shinzo Abe announced his formal interest in joining on March 15, and many observers expect Japan to succeed in its bid; after all, they reason, Japan would likely refrain from making such a formal announcement unless it had already secured informal support from TPP partners. Levin argued that the addition of Japan would delay conclusion of the TPP negotiations, and noted that the Japanese market is closed in major sectors like insurance, agriculture and the autos. He also said that the demands of Abe's Liberal Democratic Party (LDP) show "the complexity of the notion of bringing Japan in." He was referring to an LDP policy paper issued last week that called on the prime minister to secure an exemption from tariff cuts for rice, wheat and barley, beef and pork, dairy, and sugar (Inside U.S. Trade, March 15). But Levin was non-committal when asked if TPP partners should put Japan -- or at least some issues related to Japan -on a "separate track" in the talks. "I would say, 'stay tuned,' because we are working hard on these issues," he said. At a March 19 Senate Finance Committee hearing, Stabenow also made clear that she was beginning to think through what it would mean to have Japan join the talks. For instance, she made clear that, if Japan were to join, the administration should establish "benchmarks" for opening up the Japanese automotive sector. Stabenow also stressed that a TPP deal should include rules to counteract what she said was currency manipulation by the Japanese government. In recent months, Japan has taken steps that have the effect of weakening the value of its currency, which helps Japanese exports. "I want to indicate for the record that unless we see changes on currency manipulation and efforts and benchmarks to Japan opening their markets, I can't imagine why would we want to proceed with a one-sided agreement as it relates to American manufacturing and the automobile industry," she said. "So I look forward to working with the chairman on this," in reference to Finance Committee Chairman Max Baucus (D-MT). Stabenow said she appreciates the "strategic reasons" for having Japan in the TPP, but argued that the U.S. cannot allow Japan to have more access to the U.S. market without gaining increased access to the Japanese auto market. Other lawmakers with jurisdiction over trade matters offered mixed reactions to Japan's March 15 announcement. Like his fellow Michigan legislators, Ways and Means Committee Chairman Dave Camp (R-MI),was cautious. In his statement, Camp said Japan's entry into TPP would not receive his support until Japan provides adequate assurances that it is fully committed to resolving outstanding barriers in the automotive and insurance sectors. Even if Japan provides such assurances, Camp further warned that Japan's entry "cannot unravel the significant progress we have already made in the TPP negotiations" or delay the conclusion of an agreement by October. Rep. Devin Nunes (R-CA), who heads up the trade subcommittee, struck a more positive tone, saying Japan's announcement is "welcome and encouraging." Nunes, a dairy farmer who represents a district with strong agricultural exports, said that "adding the world's third largest economy to TPP would further increase the size of this agreement and the potential market for American businesses, workers, farmers and ranchers." Nonetheless, Nunes also said it is important that Japan is fully prepared to join an ambitious agreement and does not slow progress toward completing negotiations. He added that the U.S. must ensure Japan is fully committed to resolving outstanding bilateral issues.

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Levin, Stabenow Consider Possible Terms For Japan Joining TPP Talks

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Leaders on trade in the Senate also viewed the announcement by Japan in a more positive light. In his statement, Finance Committee Chairman Max Baucus (D-MT) focused on the opportunities Japan's membership would offer for his state's beef producers. He welcomed Japan's potential TPP membership as an opportunity to "further open a huge market to the world-class exports produced in Montana and across America." "I'm hopeful we can build on the progress we recently made when Japan began accepting more U.S. beef exports," Baucus said in his statement, referring to the Japanese policy change that eased restrictions on allowing U.S. beef imports from cattle older than 20 months of age. The new policy, which went into force Feb. 1, now allows beef from cattle up to 30 months of age (Inside U.S. Trade, Feb. 1). Finance Committee Ranking Member Orrin Hatch (R-UT) called Japan's announcement "welcome news" and called Japan an important market for U.S. exports in the Asia-Pacific region. He said having Japan in TPP would provide "significant benefits" to American businesses, workers, farmers and ranchers. However, he added that Japan should demonstrate the ability and political will to undertake the strong trade commitments envisioned in TPP before it formally joins the talks. Hatch also called on President Obama to join Congress in efforts to seek the renewal of Trade Promotion Authority, which he said is needed for the TPP negotiations "to successfully conclude."
Inside U.S. Trade - 03/22/2013, Vol. 31, No. 12

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