The Japan Times | 3 April 2018

Japan aims revamped TPP at reducing reliance on US: former high-level diplomat

by Cory Baird

Donald Trump’s erratic posture on trade is forcing Japanese policymakers to rethink their reliance on the economic and political alliance with the United States, according to a former high-level diplomat from the Office of the US Trade Representative.

Wendy Cutler, former acting deputy US Trade Representative, explained that recent Japanese trade initiatives, such as the newly negotiated Comprehensive and Progressive Agreement for Trans-Pacific Partnership, are concrete examples of Japan’s drive to diversify trade relationships and “hedge” against a decline in US influence and power in Asia.

“I think Japan has learned that Trump is unpredictable. You may be his best friend one day, but a week later he is complaining about Japanese trade,” Cutler said in an interview Saturday. She is familiar with Tokyo’s trade policy through her negotiations with Japanese diplomats over the original TPP trade deal.

Cutler, currently vice president and managing director of the Asia Society in Washington, added that a vacuum of U.S. leadership in Asia will encourage Japan and the region’s other countries to push forward deals and other initiatives that do not rely exclusively on the US, such as the 11-member CPTPP.

“Japan found a way forward without the US.,” she said. “What we are going to see are more initiatives without the U.S., based on a feeling that they cannot wait on the U.S. It is a way for Japanese policymakers to hedge their bets on the US.”

The TPP originally had 12 countries, including the US. But the deal appeared destined for failure when Trump signed an executive order on his third day in office withdrawing Washington from the agreement.

Yet to the surprise of many, under the leadership of Japanese diplomats the remaining countries were able to revive the trade deal without the US, formally signing the new agreement in Chile on March 8.

In the past year Japan also successfully negotiated a trade agreement with the European Union while further trade and economic initiatives are being floated by Japanese ministries and politicians.

At the beginning of December 2017, Prime Minister Shinzo Abe indicated his willingness to work with China on its One Belt One Road Initiative, which aims to pour investment into infrastructure development in Asia.

Japanese diplomats, including leading trade deal negotiator Kazuyoshi Umemoto, have insisted that the renegotiated TPP was structured to lure the US back to the deal.

Cutler for her part remains skeptical whether Trump will rejoin the deal, and thinks that Japan’s drive to renegotiate the TPP was more about weaning Japan off exclusive reliance on the US rather than trying to re-engage Washington.

“I think Japan is being driven by a desire to create a future that isn’t tied as much to the US under Trump,” she said.