The Trans-Pacific Partnership trade agreement, which U.S. President-elect Donald Trump has vowed to kill on his first day in office, is actually the best way to achieve the fair trade in Asia that he promised American voters, former Japanese economy minister Akira Amari said.
A ratified TPP would set fair and democratic ground rules for trade and investment in Asia Pacific while entrenching U.S. presence in a region that will drive global economic growth in coming decades, Amari said.
“The TPP is America’s passport to Asia. The U.S. can credibly say that it’s part of Asia if it’s in the TPP,” Amari said in an exclusive interview on Wednesday. “Without the TPP it’s an outsider.”
Amari said he remains optimistic that Trump, whose inauguration is on Friday, will come to see the merits of TPP and that the U.S. will ratify the deal during his term.
“The Trump camp probably misunderstood what is in the TPP,” he said. “The rules that would address the very issues they’re worried about are written in there. I would really like for them to understand this. The TPP is the vehicle to spread fair and democratic rules about trade and investment, which were crafted largely by the U.S. and Japan.”
Amari joins a chorus of voices speaking up on behalf of the TPP, an agreement reached between 12 countries that account for nearly 40 percent of the global economy. The prime ministers of Australia and Vietnam, both signatories to the deal, have expressed continued support for the deal over the past week.
Six departing U.S. ambassadors in Asia also urged Congress to pass the deal before Trump takes office, saying in a letter that abandoning TPP would undermine U.S. credibility and cede leadership in the region to China, which is not a TPP signatory. The deal was a cornerstone of the Obama administration’s “pivot” to Asia.
Japan sees the TPP as key to helping revitalize stagnant industries such as agriculture. The pact lowers a large number of tariffs and sets rules on issues such as labor rights, environmental protection and intellectual property.
Trump has lambasted what he says were terrible trade deals for the U.S., particularly the North American Free Trade Agreement and the TPP. He has also targeted harsh words at China, vowing to label it a currency manipulator, and appointed China-critic Peter Navarro to head the newly established National Trade Council.
Amari said some of the issues Trump raised during his campaign, particularly lost jobs and rising inequality, are legitimate. But Trump is wrong to blame globalization broadly, and should instead work to promote trade while improving policies aimed at achieving a fairer distribution of a growing economic pie, he said.
Amari said multiple bilateral trade pacts don’t allow for broader rules-making and run into trouble as rules from different agreements conflict with each other, making it difficult to achieve consistency. “It’s best to make common rules in a multilateral framework and develop them from there,” he said.
He also said the U.K. could join the TPP following its exit from the EU if it wanted, pointing out that it’s an open-door agreement. But he cautioned that Japan should focus on completing the Japan-EU economic partnership agreement before considering a bilateral agreement with the U.K.
He said he would watch closely to see how the U.K.’s status as a global financial center endures the planned departure, and cautioned Japanese companies operating there to proceed cautiously.
“Companies from around the world use the U.K. as their EU business hub,” he said. “If the U.K. leaves the EU, there’s no advantage to locating there. I think the U.K. will probably have a difficult time.”