Japan will invite China to join a pan-Pacific trade pact abandoned by U.S. President Donald Trump, fearing such a step would boost Beijing’s clout and water down what was meant to be the ‘gold standard’ for rules of trade.
Report says government officials are eager to begin two-way trade talks with Washington, despite Trump’s stated preference for bilateral deals as part of his “America First” economic plans.
Although some said such negotiations could not be ruled out.
For now, that has left Japanese Prime Minister, Shinzo Abe, in the unenviable position of pledging yet again to persuade Trump that the Trans-Pacific Partnership (TPP) is in the interests of both the United States and the global economy.
Trump signed an executive order withdrawing U.S. from the TPP on Monday.
The free trade system based on free and fair common rules is the source of growth for the world economy,’’ Abe told parliament’s upper house on Wednesday.
“I think President Trump also understands the importance of free and fair trade, and I want to steadfastly seek his understanding of the strategic and economic significance of the TPP agreement.’’
Asked about talks on a U.S.-Japan trade deal, Abe said he would refrain from speculating about Trump’s trade policy until his cabinet line-up was approved and policies became clearer.
Australia and New Zealand said on Tuesday they hoped to salvage the TPP by encouraging China and other Asian countries to join.
Chile had invited ministers from other TPP countries with China and South Korea to a summit in March to discuss how to proceed.
The TPP cannot take effect without U.S. participation unless rules are changed, so the deal is now in deep freeze.
Japan had hoped the TPP would help anchor security ally Washington in Asia and create a rule-based regime that would eventually draw in China.
Abe also touted the 12-nation pact as an engine of domestic economic reform and growth.
But inviting China to the TPP table now risks boosting Beijing’s clout while weakening the partnership’s rules of trade on matters from intellectual property protection and principles for currency management to support for state-owned enterprises.
China has not made clear whether it would be interested in joining the TPP.
But Beijing is pushing a proposed 16-nation Regional Comprehensive Economic Partnership (RCEP) that has less ambitious goals on trade rules.
Progress so far has been slow.
If TPP is diluted by bringing in China, it will not be worthwhile investing energy to achieve that,’’ a Japanese source familiar with government thinking, said.
`Negotiating with China with possibility of changing what was signed is not wise.
`It will take years and the result may be watering down of ambitions,’’ the source said. (Reuters/NAN)