SYDNEY -- The Trans-Pacific Partnership is the fist time in history that a wide range of countries with different political systems and in various stages of economic development will attempt to create a single free trade zone covering East Asia and the Americas.
While trying to navigate uncharted courses in trade negotiations, free trade leaders Japan and the U.S. miscalculated their moves. Their ongoing feud over specific conflicts of interest, if it persists, could end up steering emerging countries away from free trade and toward protectionism.
Unless the governments in Tokyo and Washington build a strong relationship of trust and demonstrate their solidarity to other TPP participants, complex multilateral negotiations will not inch forward. Japan's protection of agricultural products and U.S. calls for intellectual property rules appear to be no less than national egoism in the eyes of other less developed countries.
The TPP, negotiated by 12 countries, is a kind of free trade agreement, but is procedurally fundamentally different from bilateral free trade negotiations. All participating countries must benefit from the liberalization of a particular product. There is no established negotiation format to ensure fairness. Not a single country can be granted special status.
Take dairy products, for example. Both the U.S. and New Zealand aim to boost their exports under the framework. But while the U.S. wants to sell more dairy products to Japan and Canada, it also wants to safeguard the domestic market from competition with New Zealand. The U.S. tactic aimed at Japan could leave its back door open for New Zealand, making multilateral negotiations extremely complex.
That is why the initial goal of the TPP was to eliminate tariffs on all products under the free trade framework. But with Japan entering the talks while insisting that agricultural products be exempt, negotiations over exceptions have become considerably tougher.
It is a 12-player game with thousands of variables. The U.S. has been traditionally immersed in bilateral power plays, while Japan has always looked to the U.S. for cues. Were they fully prepared for multilateral negotiations?
With TPP participants accounting for 40% of the world's gross domestic product, and trade between them making up a third of all global transactions, striking a free trade agreement encompassing the world's key growth centers would be a monumental feat.
As the free trade talks led by the World Trade Organization runs into snags, the U.S. and Japan must fulfill their roles as TPP leaders.