Mexico Backs Japan's Bid to Join Trade Talks

TOKYO—Japan cleared one of the initial diplomatic hurdles for joining the Trans-Pacific Partnership trade pact negotiations, when Mexico became the first country involved in the talks to officially express its backing.

The announcement, made during a visit by Mexican President Enrique Pena Nieto to Tokyo, comes as welcome news to Prime Minister Shinzo Abe's administration, which is keen to join the talks at the earliest possible moment so it can try to influence the future architecture of the Asia-Pacific free-trade framework. The decision may also serve to accelerate pre-entry negotiations with the U.S. that are seen as vital to Japan's quick entry into the talks.

The TPP embraces a broad range of trade and investment issues, including common investment rules and restrictions on state-owned enterprises as well as traditional tariff eliminations. The negotiations are expected to wrap up by year's end.

But Japan's participation is strongly opposed domestically by farmers and doctors groups, who argue that the trade pact would destroy the nation's farm industry and dismantle its universal health-care service.

Another criticism of Mr. Abe's decision to seek participation in the talks is that it comes far too late to give Japan a chance to shape the discussions, though the government insists there is still time to influence the main part of the negotiations.

In terms of a swift entry into the U.S.-led talks, Japan's biggest concern now is when Washington will throw its support behind Tokyo's participation.

"Mexico's endorsement may put pressure on the United States to speed up bilateral preparatory talks with Japan for TPP negotiations," said Junichi Sugawara, a trade expert at Mizuho Research Institute.

Even if the U.S. government supports Japan's TPP bid, it would still have to give Congress 90 days to review Tokyo's entry into the talks, meaning that Japan's formal participation would have to wait till mid-July at the earliest.

The TPP member countries have been meeting every two to three months recently, and the next rounds of meetings are expected to be held in May, and possibly in July. Whether Japan can make it to the July meeting hinges on a swift U.S. approval.

"We want to join the TPP negotiations as early as possible," a senior trade official said Monday.

Mr. Abe announced his bid to join the negotiations on March 15, positioning it as a pillar of economic growth and national security strategy, amid continued diplomatic tensions with China. Many assumed Mexico and Canada would back Japan's bid, but the official announcement from Mexico still came as a relief to Japan.

Japan signed a free-trade agreement with Mexico in 2004, but the pact is less comprehensive in terms of market opening by today's standards. For instance, trade in pork and orange juice, of which Mexico is a major producer, is still restricted as Japan tries to protect its domestic farm industries.

Mexico wants Japan to open up the market for these products, but Mr. Pena Nieto apparently decided to approve the Japanese bid without trying to resolve these issues in preparatory bilateral talks.

Other TPP member countries are widely expected to express their support for Japan's bid during the trade ministerial talks of the Asia-Pacific Economic Cooperation forum, to be held in Indonesia April 20-21.

April 8, 2013

Source: Wall Street Journal