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Global economy: Who's down with TPP?

Obama is betting on a new free trade bloc to help the US economy. Here's what you need to know.

Land of the rising "no"

Which brings us to Japanese politics. Tokyo's center-left government has only expressed vague interest in joining TPP talks, and it's already ignited a firestorm of debate and brought 3,000 farmers onto the streets in protest. Japan's rice and vegetable farmers have long been protected by tariffs as high as 600 to 800 percent, and they like that arrangement just fine, thank you very much.

Prime Minister Naoto Kan has an urban support base that's more likely to back free trade. But the opposition — and some in Kan's own coalition — draw support from rural farming areas. And amid Japan's musical-chairs political leadership, Kan is considered weak.

At his excellent "Observing Japan" blog, Tobias Harris rounds up the politics of TPP in Japan, and says Kan needs to show leadership on the issue. Instead, Tokyo kicked the can down the road, saying it won't make any decision on TPP until next June. "By proceeding cautiously now, did the government simply give its opponents time to mobilize and thus ensure that once again the issue will be postponed?" wrote Harris.

If the politics of TPP look thorny, they're nothing compared to the politics of a wider trans-Pacific deal. Protected agricultural sectors have so far helped prevent a Korea-China deal, a Japan-Korea deal, or an expansion of the ASEAN-China deal to include Korea and Japan.

And any ambitious regional deal will face the same issues that have seen the the current "Doha Round" of global trade talks grind to a halt, said Ravenhill.

"What you have is essentially the same divide as exists in the Doha round, except with a a couple of key players missing — the EU and Brazil," said Ravenhill. "But otherwise you've got the same players with the same attitudes and the same entrenched interests facing off against each other."

In other words, the politics are just as tough. "For economists, the puzzle is why states would ever do anything other than free trade," Harris wrote in his post on TPP, paraphrasing political economist Helen Milner. "For political scientists the puzzle is why states would ever practice anything but protectionism."

"Getting back in the game"

If the politics of these deals are so daunting, why all the rosy talk in Yokohama?

TPP is partly about showing that the U.S. is "back" in Asia. There's a perception that while Asia has been busy inking deals and integrating its economies, Washington's been asleep at the switch.

Now Washington is determined to be a player on economic as well as security issues. TPP "is a bid by the U.S. to keep at bay Asia-initiated economic integration in the region and maintain influence over Asia," Moon Gwang-lip wrote recently in South Korea's Joong Ang Daily. The deal is "being driven primarily by strategic calculations on what is necessary to get back in the game" in Asia, added Ravenhill.

Elms said the TPP drive began at the administration of George W. Bush over worries that Washington was being "locked out" of Asian markets and left out of preferential deals. "Many officials in the U.S. were increasingly concerned about the proliferation of trade agreements at all levels that would have left the United States on the outside," Elms said.

The next TPP talks are in December in New Zealand, and Obama wants big progress by next year's APEC summit in Hawaii. But if he can't sort out the politics, TPP — not to mention FTAAP — may well be DOA.

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http://www.globalpost.com/dispatch/commerce/101118/free-trade-global-economy-tpp