Reps gear up for TPP round 19

Everyone still wondering if China will be delegate number 13

Talks about Japan's participation in the Trans-Pacific Partnership are turning out to be no walk in the park since the world's third-largest economy made its debut in the negotiations late last month.

Takeo Mori, Japan's ambassador for economic diplomacy and head of the Japanese delegation, said on Friday after the first round of bilateral talks with the US that much more work needed to be done before the two sides could reach an agreement.

Acting Deputy US Trade Representative Wendy Cutler, who led the US delegation, said both sides recognize that there is "a great deal of challenging work ahead of us".

Japan made its debut at the 18th round of the TPP negotiations in Malaysia on July 23 as the 12th member. The other 11 members already onboard were: the US, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

"Everyone believes there's a long way to go before we can really say the Japanese auto market is open," US Trade Representative Michael Froman said on Friday.

Besides forcing Japan to open its auto market - the US has long complained about its non-tariff barriers - the US is also trying to persuade Japan to open up the insurance and other financial and service sectors, he said.

Even concerning some sensitive farm products, such as rice, that the Japanese hope will be exempt from the TPP's rule of tariff elimination, Cutler said such farm products should also be put on the negotiating table.

In Japan, politically powerful farmers have staged protests against the TPP, which they believe threatens their livelihood.

After the three days of bilateral US-Japan talks last week failed to yield expected results, Froman travels to Japan for a full day of talks with Japan's economic minister Akira Amari on Aug 19 on his way to Brunei for the ASEAN Economic Ministers' Meeting from Aug 20-23 and related meetings on the eve of the 19th round of TPP negotiations on Aug 23-30.

Through the TPP, the US hopes to advance a 21st-century trade and investment framework that will boost its economic growth and job creation while promoting its principles on labor rights, environmental protection and transparency.

The USTR statement said the TPP leaders have directed their trade ministers and negotiators to seek to complete an agreement this year. However, experts, such as Jeffrey Schott at the Peterson Institute for International Economics, have expressed doubts that the complicated negotiations could be concluded this year.

Some worry that if the negotiations are delayed, the contentious political climate of the mid-term 2014 election campaign will make it impossible for a large trade deal to be approved by the US Congress.

While China has expressed its interest in knowing more details about the largely secretive TPP negotiations and fewer and fewer Chinese are talking about TPP as a US strategy to contain China, China has still not formally said it intends to join the TPP negotiations. Pundits are also divided on the potential impact of the TPP.

Wei Jianguo, secretary general of the China Center for International Economic Exchanges and a former deputy minister of commerce, believes that actively seeking to participate in the TPP negotiations will benefit China more.

"As an APEC member, China should not look at TPP just as a US strategic dream, it should also be China's strategic dream," Wei said.

China should be an indispensable member of both TPP and RCEP, he said, referring to the Regional Comprehensive Economic Partnership led by ASEAN and supported by China.

In Wei's view, an ultimate convergence of TPP and RCEP that paves the way for a cooperative and win-win Asia-Pacific Free Trade Agreement will maximize the benefits for countries in the Asia-Pacific region, including China.

While some, such as Zhang Jianping, a senior researcher at the National Development and Reform Commission, believes that China should grab the opportunity of using TPP talks to help push forward much-needed reforms at home, some argue that China need not make its decision in haste. After all, they argue, China is a huge market no one can afford to ignore. It's already a major trading partner with almost all 12 TPP members.

Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, said that he hoped the US side will be encouraging China to participate in the discussion, adding that's the best way of becoming informed of what the potential members are aiming for.

"It doesn't mean that China would necessarily sign any agreement. They might decide the cost may exceed the potential benefits. I think they should become involved," he said.