Japan raises stakes on Pacific trade deal

Japan's decision to join talks on a trade deal spanning the Pacific marks a major boost for the US bid to shape the new order in Asia, but it will likely mean longer, rockier negotiations. The United States has championed the so-called Trans-Pacific Partnership as it chairs a weekend Asia-Pacific summit in Hawaii, part of a drive to show it is active in Asia despite a troubled domestic economy and a rising China. The move by Japan, announced by Prime Minister Yoshihiko Noda just before heading to Honolulu, leaves China as the conspicuous outlier in the emerging trade deal which will now encompass more than one-third of the global economy. President Barack Obama, who is expected to announce the general outlines of the Trans-Pacific Partnership in Hawaii, hopes that trade will stimulate job growth which he desperately needs as he seeks re-election next year. But the trade pact also has a political dimension. Chinese media have characterized it as a way to isolate the growing power, although a senior official, Yu Jianhua, said in Hawaii that China would consider the pact if invited. While the United States has not explicitly ruled out China, Secretary of State Hillary Clinton called the emerging trade deal a way to shape the fast-growing Pacific region by insisting on principles such as openness and basic freedoms. "This is not merely a matter of economics. It goes to the central question of which values we will embrace and defend," Clinton said in a speech Thursday at the East-West Center. The Trans-Pacific Partnership is deeply controversial in Japan, the world's third largest economy. The Central Union of Agricultural Cooperatives has protested that foreign products will swamp traditionally protected farmers. But Japan's political leaders decided that "it is a strategic agreement to ensure that Japan is part of the rule-making process," said Michael Green, a Japan expert who was a top aide to former president George W. Bush. Green, now a scholar at the Center for Strategic and International Studies and Georgetown University, said US trade negotiators are likely nervous as they must now contend with a "large and sophisticated and complicated counterpart." "It may complicate the negotiations in the short-run by having the third largest economy entering, but it also makes the TPP a much more credible pillar for an Asia-Pacific-wide free trade agreement," he said. The United States has said it wants to move quickly to wrap up the Trans-Pacific Partnership, but many observers believe that the deal will take years -- especially now that Japan is involved. While the United States has saluted Japan's decision to join the talks, a number of US lawmakers and industries are haunted by bruising trade negotiations with the Asian ally in the 1980s. The American Automotive Policy Council, which represents General Motors, Ford and Chrysler, said that a free trade agreement with the land of auto giants such as Toyota would devastate a recovering Detroit. "Providing preferential trade benefits to Japan, while they continue to embrace closed-market policies, would only serve to undermine the competitive gains made by American automakers," said Matt Blunt, the council's president. US automakers had initially fought against a US free trade agreement with South Korea, which was approved last month by Congress after marathon talks and concessions to Detroit. Some analysts believe that South Korea -- along with other regional countries such as Canada, the Philippines and Thailand -- will now feel pressure to enter the Trans-Pacific Partnership to ensure they are not left out. "My sense is that there is growing momentum behind the TPP, with the potential for a few other countries to join the nine who already engaged in these discussions," said John Lechleiter, head of pharmaceutical giant Eli Lilly. The countries already in in the talks are Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States and Vietnam. Critics say that communist Vietnam's membership weakens the US message that the deal is about fundamental freedoms. Opponents of the deal also include US dairy farmers who fear competition from New Zealand and consumer groups who worry that US pharmaceutical companies will push up drug prices.