Abe, Turnbull Highlight Commitment to TPP, Trade Ties in Bilateral Talks
Australian Prime Minister Malcolm Turnbull and Japanese Prime Minister Shinzo Abe met in Sydney last weekend to discuss a host of trade issues, including their plans to move forward with the Trans-Pacific Partnership (TPP) Agreement.
Meeting on Saturday 14 January, the leaders also affirmed their continued commitment to deepening bilateral trade ties. Abe’s visit to Australia represented part of a four-country tour in the Asia-Pacific, including the Philippines, Indonesia, and Vietnam, aimed at strengthening trade and security relations in the region.
The TPP, a planned pact between 12 nations in the Asia-Pacific, covers 37 percent of global GDP and a population of over 819 million. The agreement promises to eliminate over 98 percent of tariffs in the region and provide transparent and stable conditions for investors.
With negotiations completed in late 2015 and the deal signed in February 2016, the accord has since been pending ratification by the signatories’ domestic legislatures, with Japan being the latest to ratify in December. (See Bridges Weekly, 15 December 2016) As the second-largest economy in the region, the enactment of the deal hinges in large part on Japan, though ratification by the US is also one of the pre-conditions for its entry into force.
US President-elect Donald Trump, set to take office on 20 January, reaffirmed in November his plan to submit “a notification of intent to withdraw” from the agreement. Trump has referred to the deal as “a potential disaster” for US interests, pledging instead to “negotiate fair bilateral trade deals that bring jobs and industry back.” (See Bridges Weekly, 24 November 2016)
Next chapter for TPP
The leaders of Japan and Australia both reaffirmed their commitments to maintaining strong cooperation with the US and the incoming administration. Speaking at a press briefing at Kirribilli House in Sydney, Abe said that his country affirms “the importance of the role of the US-Japan and US-Australia alliance in the Asia-Pacific region.”
“Our respective alliances with the United States are as relevant and important today as they have ever been,” Turnbull said, adding that Canberra plans to “work closely with the incoming administration as we have been to advance the region’s interests and our shared goals.”
The change of leadership in the US from Barack Obama, who had ardently supported the TPP’s negotiation and ratification, has meant that trading partners in the Asia-Pacific must assess how this transition will affect plans for closer trade ties in the region. (See Bridges Weekly, 24 November 2016)
Both leaders publicly stood behind the 12-country accord in Saturday’s press briefing, pledging to “coordinate toward the early entry into force of the TPP” according to Abe’s comments.
Earlier this week, Australian Trade Minister Stephen Ciobo expressed optimism about the deal’s future in an interview with ABC Radio.
“There are quite a number of very senior Republican congressional leaders who recognise that the TPP is a good deal, not only for the US but for all 12 countries. That is certainly the view of Australia, it's the view of Japan, and that's why we're continuing to pursue our domestic processes to ensure the TPP comes into effect,” he said.
“If in 24 months' time the United States still maintains the position that they do not want to be part of the TPP, well there are other options that can be pursued,” said the Australian official.
Free trade upheld
The leaders also expressed their commitment to free trade based on their commonly held values. “It is more necessary than ever before for Japan and Australia, as special strategic partners, to play a leading role for regional peace and prosperity, as we both share common values such as freedom, rule of law, and democracy,” Abe said.
The Japanese leader also stressed the value of supporting and protecting "the robustness of the free, open, and rules-based international order."
Turnbull added that both leaders were “thoroughly committed to free trade and the open markets” and “to bringing into force the TPP.”
“We know that protectionism is not a ladder to get an economy out of a low growth trap, it is a shovel to dig it deeper,” said Turnbull.
As part of their push for deeper trade ties, Abe and Turnbull also pledged a prompt conclusion to the Regional Comprehensive Economic Partnership (RCEP), the 16-country negotiations involving both Canberra and Tokyo. The planned agreement, covering almost 30 percent of world GDP, includes ASEAN and its six FTA partners, but does not include the US. Those six FTA partners are Australia, China, India, Japan, New Zealand, and South Korea. (See Bridges Weekly, 10 November 2016)
Japan-Australia deal: two years in
Traveling with Abe was a cohort of Japanese business leaders, including the executive team of INPEX, the oil company. Japan is Australia’s second largest source of foreign direct investment, where INPEX was responsible for the largest single overseas direct investment.
The meeting also marked the two-year anniversary of the entry into force of the Japan-Australia Economic Partnership Agreement (JAEPA), a bilateral free trade deal aimed at facilitating trade and investment between the two nations and promoting mutual economic growth, including provisions on e-commerce, intellectual property, government procurement, dispute settlement, competition. (See Bridges Weekly, 10 April 2014)
“We are seeing smooth implementation of the Japan-Australia EPA which will start its second year tomorrow after coming into force,” said Abe last weekend. “I hope that the business mission accompanying me this time will provide the impetus for a further deepening of cooperation in the economic sphere which provides the foundation for our bilateral ties.”
ICTSD reporting; “Australia, Japan to fast-track TPP vote to pressure US,” IANS, 16 January 2017; “Australia, Japan boost defense ties amid instability in Asia,” ASSOCIATED PRESS, 14 January 2017; “Japan, Australia Vow to Work With Trump on Regional Security,” BLOOMBERG, 14 January 2017; “Abe, Turnbull sign pact boosting Japan-Australia defense ties,” THE JAPAN TIMES, 14 January 2017; “Japan, Australia to strengthen defense ties, stress importance of TPP,” REUTERS, 14 January 2017; “Malcolm Turnbull holds out hope for TPP despite Trump’s opposition,” THE GUARDIAN, 17 January 2017.