White House Warned Against Adding Japan to Trans-Pacific Trade Pact

White House Warned Against Adding Japan to Trans-Pacific Trade Pact

When the Obama administration welcomed Japan into the Trans-Pacific Partnership last week, it also invited an increased level of opposition to the trade pact and may have thrown up new barriers to congressional renewal of fast-track negotiating authority.

Big domestic economic sectors including automakers, insurers and agriculture interests have spoken out against the deal, joining typical trade pact opponents such as liberal groups, unions and some other domestic manufacturers.

The auto industry, which previously supported a Trans-Pacific Partnership agreement, immediately attacked Japan’s inclusion. A top industry lobbyist said Monday there may be little hope of winning back its support if Japan formally signs on.

The agreement’s other 10 members would also need to agree in order for Japan to join the pact.

“Adding a complicated trading partner to the negotiations will certainly delay TPP’s conclusion and may keep it from ever coming to fruition,” said Matt Blunt, president of the American Automotive Policy Council, which represents Ford Motor Co. and other U.S. car makers.

The United Auto Workers union also lodged strong opposition to Japan’s bid to join.

Blunt said Japan’s is the most closed automobile market in the world and called the country a “well known currency manipulator.” He said adding Japan could puts congressional approval of TPP in question.

House Ways and Means Chairman Dave Camp, a Republican from the auto hub of Michigan, expressed his concerns April 12 when acting U.S. Trade Representative Demetrios Marantis announced that the United States had concluded bilateral talks with Japan and had given its blessing to adding the nation to the ongoing 11-country deal. Rep. Sander M. Levin, another Michigander and the top Democrat on Ways and Means, has registered his problems with the pact.

In a conference call April 12, Marantis and Michael Froman, Obama’s deputy national security adviser for international economic affairs, said they were sensitive to the concerns of U.S. industries and would continue to work out the details with Japan as part of TPP negotiations and separately. “Having Japan in TPP and contributing to the high standards of TPP is good for the U.S., it’s good for the Trans-Pacific Partnership as a whole, and it’s very good for the multilateral trading system itself,” Froman said.

But several sources said that adding Japan to the TPP deal could increase opposition, particularly among Democrats, to renewal of the president’s fast-track, or trade-promotion authority that allows implementing legislation for trade agreements to go to Congress for up-or-down votes without amendments.

“It means much more complicated politics about trade authority,” said Lori Wallach, director of Public Citizen’s Global Trade Watch and a vocal critic of free-trade deals.

Mike Dolan, a trade lobbyist with the International Brotherhood of Teamsters, said that with Japan in TPP, Congress needs to scrutinize every line of the agreement before signing off on fast-track. “It makes the case for not giving fast-track to the administration more compelling,” he said.

William Frymoyer, a former aide to ex-Rep. Richard A. Gephardt and a trade policy specialist at the firm Stewart & Stewart, said that having Japan on the TPP deal gives the administration a stronger argument that the pact would be a major geo-political move in Asia and makes it a much bigger deal economically — offering a counterbalance to China.

But, he said, it will not be an easy sell on Capitol Hill, with the steel industry, auto industry and labor among the opponents. “Japan joining this makes it impossible for a deal by the end of the year,” Frymoyer, said.

The administration has previously said it is aiming to wrap up the deal this fall.