I was baffled upon learning that the U.S. and Japan did not have a formal free trade agreement with each other, considering how many Japanese goods flow into the U.S. But both countries are partly to blame for this. After all, as of last month, the U.S. was still unwilling to drop tariffs on Japanese vehicles, and Japanese farmers won’t let tariffs on foreign agricultural products disappear without a fight. Yet Japan is the country that doesn’t have a seat at the Trans-Pacific Partnership (TPP) table yet.
Sen. Debbie Stabenow (D-MI) is one of several lawmakers and business lobbyists who are encouraging President Obama not to give Japan the green light to joining TPP discussions. Other participating countries, including Canada, Mexico and Singapore, have welcomed them; Australia and New Zealand, along with the U.S., have not. For his part, Japanese Prime Minister Shinzo Abe and most of his citizens are open to the idea, even if farmers aren’t; for his, Obama has said Abe does not have to meet any preconditions before joining talks.
Despite his openness to the agreement in principle, Abe and his government are promising to fight for tariff exemptions for agricultural products, with the possibility that they may be lowered as a compromise. Congressional Democrats, meanwhile, might be open to dropping U.S. vehicle tariffs if Japan drops theirs first. As for the TPP at large, the agreement calls for all participating nations to drop all tariffs that affect each other’s exports. By the logic of these Democrats, the U.S. should also be left out of talks until they agree to eliminate their auto tariffs. It’s only fair, right?
It wouldn’t be the first time the U.S. has participated in a free trade agreement with exemptions. Despite its membership in the North American Free Trade Agreement (NAFTA), Canada still imposes tariffs on foreign dairy, poultry, eggs and sugar, much to the chagrin of every Canadian who has felt the need to go over the border for cheaper groceries. It’s entirely possible that the TPP will agree to a few exemptions of their own for the good of otherwise free trade. But they can’t do that without all hands on deck.
I happen to believe the elimination of trade barriers does more economic good than harm, and it’s the responsibility of a country’s domestic producers to maintain domestic demand. But the TPP nations will benefit from a good agreement, even if they can’t reach a perfect agreement. The only way to determine which kind of agreement they will get is to allow every Asia-Pacific nation to get involved in talks. That ensures a pathway to change from both the U.S. and Japan.
Of course, if we were talking about human rights abuses or state sponsorship of terrorism or anything of the sort, then I’d accept serious preconditions, as should we all. But tariff exemptions are nothing new.