Japan to US: You Can?t Railroad the Trans-Pacific Partnership

Jan 20 2014

By Clive* – Naked Capitalism

I?m a little prone to overstatement on occasions, but I don?t think I?m straying too far from the truth to say that the Trans-Pacific Partnership (TPP) ? along with its equally ugly sister for those of us in Europe the Transatlantic Trade and Investment Partnership (T-TIP) ? would be, if enacted, amongst the defining geopolitical and geo-economic developments of the century. They seek to cement the near- three-decade gains made by commerce and the losses made by nation states and their citizens. Supra-nationalistic legally binding ?trade courts?, embedding of the commercial rule of law?s higher ranking over the national rule of law for the rest of us, and prevention of countermeasures to the growth of the global mega corporation are just some of the treats we?ve got in store for ourselves if these agreements are accepted.

And yet, there?s scarcely a murmur from the mainstream media. At least in the US and Europe. Asia, on the other hand, is a little more interested. Not necessarily for entirely wholesome reasons. Many of the anti-TPP stances are underpinned by a desire of corrupt, cronyism-riddled governments to hang on to their cosy status quos. But at least on some levels, Asian governments who are parties to the TPP negotiations are reluctant to simply acquiesce to rule by the global corpocracy.

I would argue that Japan is ground-zero for TPP. Japan was a latecomer to the TPP party, the invitation being extended because without Japan, which is still after countless lost decades the world?s third biggest economy with a GDP almost 10 times the size of, for example, Malaysia. Without Japan, any resultant TPP would be a doughnut with a Japan-shaped hole in the middle.

So given the secrecy surrounding the TPP negotiations coupled with the general ho-hum with which it is regrettably met with in most quarters, Japan is one of the few sources of information which is a) informed b) reliable and c) engaged in the debate. This brings good and bad. The good is that the Japanese media is free, honest, candid (mostly) and reliable (~ish) although it is overly deferential at times. The bad is that, like any country?s media, it inevitably reflects and respects the social moir?s which it inhabits. Oh, and you?ve got the language barrier. But not to worry, I?ve spent a fair amount of time in Japan and with the fine Japanese people whose good qualities are to me unique in the world. I can crack the language barrier and have a stab at explaining the cultural context.

Let?s start with a compare-and-contrast of the most recent TPP negotiations which concluded in mid-December last year. At the end of the meeting, the Office of the United States Trade Representative issued the usual trite, tells-you-nothing joint statement. Notable, though, is the brevity of the statement which borders on the terse.

When the joint statement was issued, most of the Japanese media simply parroted it verbatim. But towards the end of December last year, a bit more in the way of comment and analysis started to creep out. This is the usual pattern with the Japanese media ? an initial bland reporting that avoids boat rocking, then in dribs and drabs after the main event you get more meaningful discussions.

So when, a fortnight after the official releases from the Singapore TPP negotiation round, off the record briefings started to appear I planned to translate these after the holiday season. Fisco is a financial analyst services provider in Japan and on the 24th December 2013 they put out a toughly worded assessment of where TPP was likely to go next in terms of Japan?s participation. The article didn?t cite official sources directly, but from my experience with the Japanese media, it was pretty obviously drawing on officials speaking off the record. In the US you typically get such articles prefaced by ?Washington insiders say??, ?Obama aides report?? or ?One source added that the president has??. Here in the UK, the line ?Sources close to the Prime Minister?? has become such a clich? for the Prime Minister?s press office that one wonders why journalists bother with the subterfuge. In Japan, readers don?t get their intelligence insulted with such banter. If a source is on the record, they are named. If it?s off the record, information simply is reported source-less.

When I checked back a couple of weeks later though, the Fisco article wasn?t on their website. Now, I?ll say at this stage that isn?t anything which automatically makes me think that Fisco have been subject to any pressure to remove the article. They may not have been happy with the lack of sources willing to go on the record. It could be behind their paywall. It?s also possible that the article was substantially inaccurate. But I?m sufficiently sure that it is (was) accurate that I?ll present the translation of it here and let readers decide for themselves. Even though the original article isn?t obtainable from the publisher (Fisco), news aggregators have captured and redistributed the Fisco article and you can read it on a dozen or more different screen-scraper type of site. Here?s Excite?s version. Note that the credit (to Fisco) is still there, I think if Fisco really didn?t want the article to be regurgitated they would be requesting it is pulled from sites such as Excite or otherwise issue statements distancing themselves from it. But of course, doing that simply draws even more attention to it!

Okay, let?s dive into the feature. When translating, one of the hardest things to do it to try and retain the author?s original intent in what they were saying. When you have strong beliefs about a subject, as I do on this one, it?s very easy to let your own opinions colour the resultant English language version. I?ve tried very hard to preserve the original ?feel? from the Japanese language version of the article. What I?ll do is add my own commentary as we go along, hopefully it will be clear what is the original wording (albeit translated but as true to the original as I can make it) and what are my own thoughts on what this all might mean.

15:08* December 24, 2013 *Japan Standard Time

Trans-Pacific Strategic Economic Partnership (TPP) Agreement Still on Hold

Right, we haven?t even got past the title and I can?t resist a comment. We all know the Trans Pacific Partnership (TPP) as, well, the Trans Pacific Partnership. That?s what it?s called in English, that?s what it?s always been called and that?s what we will keep referring to it as for the sake of consistency with convention. But stop for a moment and reflect on this. Imagine if you?d never heard of the TPP before and had to ask for an explanation simply, but accurately, of what it was all about. When the Japanese first heard of it, that is exactly what had to happen. And look at the resultant translation. The warm-and-fluffy ?Trans Pacific Partnership? has become the rather clunkier sounding ?Trans-Pacific Strategic Economic Partnership?. And while I?ve retained ?Partnership? in my translation, ?Treaty? would perhaps be a better choice of word. The English version, ?Trans Pacific Partnership?, almost makes you imagine US Treasury Secretary Jacob Lew engaging in some sort of hands-across-the-ocean group hug, probably while striking up a rendition of Kumbaya. In English, it lacks any reference to tricky words like ?Treaty? or ?Economics? ? words which might alert readers to what could be going on. The Japanese version contains no such soft soap. Where did ?Strategic? come from? This word is definitely present in the Japanese text but nothing in the English version makes any reference to ?Strategic?. But the Japanese think this is something non-trivial and hence it is, to them, ?Strategic?. And notice the lack of the word ?Trade? in the Japanese version of TPP. Japanese vocabulary contains perfectly good words for ?Trade? and if the Japanese had thought this was all about ?Trade? then ?Trade? is what it would have said. But no, this is definitely in the minds of the Japanese ?Economics?. The word ?Economics? is used explicitly and, in my opinion, deliberately. Westerners often say that Japanese is a vague language which is difficult to get an exact meaning out of. That is rubbish. Japanese can be extremely precise when it needs to be, as is the case here. Also, while I?ve translated the title as shown above, it would be no less accurate but a little more colloquial to have given the piece a title of ?TPP Talks: Going Nowhere Fast?. Back to the article.

During the most recent Trans-Pacific Strategic Economic Partnership Agreement (TPP) negotiations, it was decided that the next ministerial meeting, which was scheduled to be held in January 2014, is to be postponed until the middle of February.

Clive here. So what was said in the closing communique after the Singapore round of TPP negotiations is history barely two weeks later. In the next paragraph?

At the ministerial meeting held on the 7th to 10th of this month (December 2013) in Singapore, negotiations between the participating 12 countries, including Japan and the United States, had continued working towards reaching an agreement at the end of the year (2013). But there were differences of opinion in areas such as the elimination of tariffs on manufactured and agricultural products, removal of preferential treatment for state-owned enterprises (SOEs) and extending intellectual property rights.

Clive: The Singapore round achieved little or nothing substantive. All the issues that were there at the start remained outstanding at the end.

It was for this reason that, although a previous meeting statement had said that the next meeting would be held in January, it was decided to postpone the next meeting because it was determined that the negotiations are not expected to progress. Matters such as the location and a specific schedule for this next meeting have also not progressed.

There?s a lack of agency here which I mentioned in my preamble ? who decided to postpone the next meeting? Was it a ghost? It doesn?t matter too much who it was, either Japan or the US or both believed that it would be too embarrassing to have another round of negotiation in January when there was little prospect of success. Back to the article?

It?s becoming increasing unclear how the current round of TPP negotiations can reach a conclusion.

Clive here again. Now, this is interesting. For the first time that I?ve read in Japanese TPP reporting, we?re getting serious doubts about any sort of deal being obtained. This is definitely news. In the native Japanese, this gets a line all to itself and in effect becomes the stand-out point in the article. Rightly so. By why are things going awry? The article?s source apparently thinks he has the mud and sets about slinging it. Let?s get back to the original piece to find out more?

A goal of early conclusion was set by the Japanese government in cooperation with the United States. From the fact that the United States has not compromised at all in the tariff negotiations between Japan and the United States, the only explanation is that it was the firm policy of the United States that ? regardless of its wish to see an early conclusion ? its negotiating tactic is to stick to its preferred position on tariffs.

This is pretty blatant finger pointing by Japanese standards. I?ve given as literal translation as I can and not embellished the sense of invective present in the original. The above paragraph needs no additional commentary from me to convey its thoughts on what?s wrong in the TPP negotiations. Here?s the next paragraph:

The plan now is to carry out the tariff negotiations in Japan-US ministerial meeting talks prior to the next round of negotiations, to determine the tariffs to be maintained for five areas of important agricultural products. These are wheat and rice, beef, pork, and dairy products. Japan?s government has worked towards the conclusion of the negotiations, it will continue to consult with emerging economies and to explain the responses to and benefits of regulatory reform. If chief U.S. Trade Representative (USTR) (Michael) Froman continues to require the complete elimination of tariffs, this will reduce the likelihood of an agreement.

Oh no! ?Talks about talks?. The kiss of death in any treaty discussion. And that whole bit about ?it (Japan) will continue to consult with emerging economies and to explain the responses to and benefits of regulatory reform?? makes no sense in the original Japanese text either ? my take on that sentence is that Japan was coerced into trying to bring other countries on board in areas of the TPP they objected to, but even the Japanese version really doesn?t convey an awful lot. Not a case of the meaning being lost in translation, there wasn?t much meaning to begin with. I wish I had the full details on what lies behind that marvellous piece of Japanese language mish-mash, it?s probably very interesting. No matter, there?s more to come?

There is the possibility that if the United States keeps making unilateral requests for concessions without in return granting concessions itself, negotiations become protracted. The possibility that negotiations still cannot be concluded at the next ministerial meeting also increases.

Clive again. Just in case the Japanese readers hadn?t got the point by now, another reminder of why the article?s source doesn?t believe that the TPP negotiation can be moved forward ? and even blunter language this time. Clearly the US doesn?t understand the meaning of the word ?negotiation?. It means the same in Japanese as it does in English. The Japanese characters which combine together to form the ?word? negotiate are the ones for ?meeting? or ?rubbing shoulders with? and ?walking or wading through water? or ?passing across?. You get to know people and move carefully across a barrier. If you don?t exchange things ? views, ideas ? you?re demanding not negotiating. There?s a word for ?making demands? in Japanese as well ? it?s not what the Japanese think should be going on. But the US doesn?t appear to have grasped this concept.

The domestic situation in each of the countries participating in the negotiation ? and this includes the U.S. too ? means that if concessions are not made, then there is little possibility of negotiations concluding early.

?The domestic situation? indeed. Another noteworthy remark ? tweaking the nose of the US because the word is out that domestic support for the TPP in the US is certainly not a given. The Japanese can undeniably on occasions be justifiably called insular in their sometimes rather inward-looking world view, but they will be aware of the vibes reaching across the ocean that all is not entirely well in the US? own attempts at keeping a lid on TPP anxiety. Dear readers, you may think that writing to your elected representative, commenting negatively on articles you read in the mainstream media about the TPP and generally kicking up a bit of a fuss, making some noise, is a waste of effort. That is not so. The world does watch what goes on in the US. If popular sentiment is against something, the US government has a much harder job of convincing foreigners that it?s just them being awkward and reactionary and not getting the big, progressive, reform-minded, modernising picture.

Back to the article?s final flourish:

This calls for more than just railroading things through; it?s also a challenge for diplomacy and negotiating skills.

Diplomacy is just a nice word for cross-border politicking. And that is the nub of why, certainly as far as Japan is concerned and I?d venture too the other countries involved, the TPP talks are stalling. The deal is being worked on by politicians. These politicians have constituencies and need their constituents? votes. Now, politicians the world over ? and certainly Japan is no exception to this rule ? can and do throw one set of voters under the bus if it means that another, larger, group of voters might provide support in return. TPP requires (or at least, the current US position requires) that Japanese agriculture takes a hit because the subsidies it receives are to be removed. To the LDP (Prime Minister Shinzo Abe?s party) in Tokyo, rural votes lost in Chiba prefecture because rice growers? incomes drop might be made up for in Okinawa if the move of the resented US base there is expedited. Or at least if the crash-prone Osprey aircraft are removed. But who is Tokyo talking to at the TPP negotiations? The Office of the United States Trade Representative. What can Michael Froman bring to the table? Signed copies of Timothy Geithner?s memoirs?

This highlights a deeper malaise for the US. Due to its mismanagement of the South East Asia geopolitical arena, it doesn?t have much to offer either Japan or the other TPP countries. Japan would certainly appreciate some US muscle directed towards China over the Senkaku Islands territorial dispute. A bit of US help in dealing with North Korea wouldn?t go amiss either. Yet the US can deliver on none of these things. It certainly wouldn?t want to risk the overspill from any goading of China. And even lower impact offerings like the Okinawa base aren?t in the USTR?s gift.

A final theme from me on the issues which this fairly short piece of Japanese analysis brings to the fore. For a treaty negotiation, countries usually assign their State Department or Foreign Office to handle things. This is because the Secretary of State can go across all government departments to do any necessary give-and-take required to seal the negotiations. If the Department of Defense has to be leaned on to resolve the Okinawa base, then the State Department knows who to call and what to ask. If there?s a political wrangle, the Secretary of State ? or perhaps the Vice President acting in a statesman-like capacity ? sorts it out. To give an example, when Germany?s Chancellor Merkel had her phone bugged, while this was a problem which operationally only the NSA could fix, it was simply inconceivable that the NSA or the Department of Defense would have been expected to handle the matter. Having the Director of the National Security Agency call Merkel would have not only been an insulting diplomatic blunder to Germany, but he would have quite simply not been able to resolve the situation beyond the basic ceasing of the bugging operation. Only diplomatic channels led by the Secretary of State could clean up the political fall-out and smooth over the resultant foreign relations ruffled feathers.

Even if the US had better goodies to offer Japan to sweeten the TPP pill it is asking it to swallow (and it?s a little short on tempting morsels in this regard) U.S. Trade Representative Froman is not in a position to offer them without State Department assistance.

All of which shows that the TPP is nothing more than a grubby political gambit. Economists like to dress up their theories in scientific costume, presenting them as somehow evidence-based and provable in a measurable, repeatable way. Yves has ? literally and figuratively ? written the book on this subject as it is covered in ECONNED.

Economists promoting the provisions of the TPP are caught in a bind. If the economic theory underpinning the TPP is self-evidently valid beyond all doubt, it doesn?t need to be ?sold? to any of the participating countries. They?d only have to look at the unequivocal evidence of the merit and validity of the theory before making the logical decision to enact the TPP.

The mask will slip and the true nature of the TPP will be revealed ? which for me will always be that the TPP is only crass political payback by Obama for services rendered. Chief amongst those are the services supplied by the multinationals: significant campaign donations.

*Clive , a regular Naked Capitalism commenter and self-confessed Japan-o-phile

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