TPP Is Dead

Soon after the world leaders of major economies agreed on maintaining momentum for organizing international free trade framework, the incoming leader of United States rejected that concerted effort. U.S. President-elect, Donald Trump, announced on his social networking account that U.S. will step out of negotiation of Trans-Pacific Partnership on day one of his Presidency. The Japanese people were appalled: What was the first meeting of Japanese Prime Minister Shinzo Abe with Trump in New York last week, in which Abe insisted on keeping U.S. in TPP framework?

In his video message, Trump insisted on his determination for his campaign promise, Make America Great Again. “Whether it’s producing steel, building cars, or curing disease, I want the next generation of production and innovation to happen right there, in our homeland: America – creating wealth and jobs for American workers,” said Trump.

The first target was an international trade deal. “I am going to issue our notification of intent to withdraw from the Trans-Pacific Partnership, a potential disaster for our country. Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back onto American shores,” declared Trump. This was the announcement of killing TPP and going forward to bilateral deals, possibly with China or Russia, even leaving allies behind.

To activate TPP, six or more countries with 85% or more amount of gross domestic products in Asia-Pacific region is needed. U.S. occupies 60% of total GDP in the region. It will be impossible for current 12 countries on TPP to activate it, if U.S. withdraws. It is also very hard to reshape the deal to include U.S. led by Trump. Japanese newspapers reported that TPP wad dead.

Cancellation of TPP will damage economic policy of Abe administration, which growth strategy has heavily been relying on TPP deal. “TPP is meaningless without United States. Fundamental balance of interest will be broken down,” told Abe to the reporters. Abe tried to persuade Trump to come back to TPP in New York meeting last week. He praised Trump as a “reliable leader.” But, Trump appeared to be unreliable leader for Abenomics a few days later. Poodle-like approach to incoming President turned to be in vain.

The opposite parties in Japan have been furious on Abe’s coercive attitude for ratification of TPP. “It is clear that TPP will not be activated. The meaning of discussion over TPP will be collapsed,” said Chairman of Diet Affairs Committee of Democratic Party, Kazunori Yamanoi. Director General of Social Democratic Party, Seiji Mataichi, demanded halting domestic process for TPP. Foreign Minister, Fumio Kishida, rejected to comment on Trump’s announcement in the meeting of TPP Special Committee in House of Councillors on Tuesday. But, the leading parties still insist on ratification of the dead deal.