Japanese Prime Minister Shinzo Abe, speaking at the convention of his Liberal Democratic Party on March 18, said Japan "cannot be left behind" by an opening world economy. Abe was defending the decision to join the ongoing negotiations between the U.S. and 10 other governments to form what is known as the Trans-Pacific Trading Partnership (TPP).
The significance of Japanese participation in this trade agreement can be illustrated by the fact that the members of the TPP together represent 40 percent of world production. As characterized by David Dreier, a former Republican U.S representative from California, it is a "colossal" trade agreement.
Before joining the negotiations with the other members, the Japanese and the U.S. governments dealt with some outstanding bilateral issues in the automotive and insurance sectors. The imbalance of trade in automobiles is one of the most sensitive issues. While the U.S. in 2012 exported to Japan almost $1 billion in automobiles, Japanese exports of vehicles to the United States in 2011 amounted to $41 billion. For this reason, U.S. Rep. Sander Levin, D-Mich., said Japanese participation in TPP negotiations will be scrutinized closely in Congress.
Negotiations between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the U.S. and Vietnam are expected to conclude by the end of this year.
Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former director, UNECLAC Washington Office.
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