VLADIVOSTOK, Russia—Japan will not join talks this year on creating a free-trade zone for the Pacific region, as ruling party members remain opposed to Tokyo's entry and politicians are focusing on a looming election, sources said.

Prime Minister Yoshihiko Noda has decided he cannot declare the government's entry into talks on the proposed Trans-Pacific Partnership when leaders meet for the Asia-Pacific Economic Cooperation summit in Vladivostok on Sept. 8-9, perhaps the last possible date to join TPP talks scheduled for December, the sources said.

"There is no longer anything we can do," a senior official said on Sept. 5.

The TPP would build a barrier-free trading zone between many nations spanning the Pacific Ocean, and is viewed by the United States and others as an opportunity to increase exports to growing economies in Latin America and Asia.

One obstacle for Noda is a lack of approval for Japan's candidacy from three of the nine nations currently in TPP talks. The United States, Australia and New Zealand have yet to give the green light.

On Sept. 5, Japan's trade minister, Yukio Edano, met his New Zealand counterpart, Tim Groser, on the sidelines of an APEC ministerial meeting in Vladivostok. Sources said Groser remained noncommittal on approving Japan's bid.

And the United States, which leads the TPP talks, needs 90 days to approve the participation of new potential partners. Once the U.S. administration agrees, Congress needs three months to ratify it. As a result, the September APEC summit represented a deadline for Noda to declare Japan's intention and still win Washington's approval in time for talks scheduled for December.

Noda was sworn in last September. He said he would decide at an early date whether Japan would try to join the TPP negotiations. Two months later, he said Japan would begin preliminary talks with existing TPP-dialogue nations.

But many lawmakers in the ruling Democratic Party of Japan opposed the trade pact because of fears that dropping import tariffs would hurt domestic agriculture. Additionally, the Noda administration has been distracted by the twin demands of Japan's raging nuclear debate and having to engage in political horse-trading as it sought to raise the consumption tax rate, which it passed in August.

Besides, Washington has pressed Tokyo for concessions in trade sectors such as car imports. Those talks have come to a grinding halt, and Noda has finished his first year in office without being able to announce Japan's participation in the TPP.

Meanwhile, the DPJ's presidential election is only two weeks away, and there are increasing chances of a Lower House dissolution and snap election. This, too, is making it hard for Noda to announce Tokyo's entry into full TPP talks.

September 6, 2012

Source: Asahi

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