The prime minister has pledged to take part in talks regarding the Trans-Pacific Partnership economic framework agreement, which are led by the United States. At the same time, he has favored participating in efforts to create a framework centered on the Association of Southeast Asian Nations, a configuration of economies being pursued by China.

Indications are that Noda’s competence will be tested in steering Japan’s economic diplomacy skillfully enough to achieve compatibility between the ideas for two giant economic zones in the Asia-Pacific region, in which the interests of the United States and those of China could possibly be on a collision course.

“Our nation will pursue its path with an eye on both sides,” Noda told reporters on Friday between meetings related to Asean on the Indonesian resort island of Bali.

Ultimate goal

He went on to say, “Our ultimate goal is to craft a free-trade area covering the entire Asia-Pacific region.”

The prime minister’s remarks were interpreted as meaning current frameworks such as the TPP and Asean plus Three (the 10-member Asean grouping plus Japan, China and South Korea) should be considered steppingstones to creating a single framework encompassing the vast Asia-Pacific region.

Based on this perspective, the prime minister appears resolved to push ahead while paying attention to both the TPP and Asean. China has yet to take part in TPP negotiations.

Japan’s decision to place importance on not only the TPP but also free- trade negotiations of the Asean-centered East Asian region was prompted by the fact that the framework including China, Japan’s largest trade partner, is expected to bring greater economic benefits than the TPP.

China favors the Asean plus Three framework, but Japan and Asean are seeking to establish an Asean plus Six configuration, adding India, Australia and New Zealand.

Asean plus Six is aimed at diluting China’s influence, “since China’s mind-set about such things as trade rules and intellectual-property rights is different from that of other countries,” a senior Foreign Ministry official said.

If trade liberalization is realized under the Asean plus Six framework, Japan’s gross domestic product would increase by 1.1 percent, according to estimates by Kenichi Kawasaki, a senior researcher at the Nomura Securities Financial and Economic Research Center.

If TPP trade liberalization linking the nine member-countries, including the United States and Australia, and Japan is realized, the increase in Japan’s gross domestic product would be no more than 0.54 percent, far below the figure expected of the Asean plus Six grouping, according to the estimates.

Gaps

There are, however, considerable gaps between the progress in discussions regarding the TPP and on the envisioned framework focusing on Asean.

TPP talks have been proceeding fairly speedily, with the understanding that in principle all tariffs will be eliminated.

In contrast, discussions are slow among nations expected to participate in the Asean-centered framework, as the goals they are pursuing are very different.

Economy, Trade and Industry Minister Yukio Edano has said, “Although we have no intention to set priorities, it is definitely the TPP talks that have been moving fast.”

Edano thus suggested that Japan, while paying attention to both moves for the TPP pact and an Asean-centered framework, will likely place higher importance on the TPP, at least for now.

As Professor Yukiko Fukagawa of Waseda University put it: “Given that an official decision has yet to be made on Japan’s participation in the TPP talks, this country should have as many options as possible.”

“An idea of how to realize economic integration comprising China is also important,” she said.

“If Japan’s actual TPP negotiations are started, this country will need to set priorities because of limitations in terms of the human resources involved,” Fukagawa said.

(MCT-The Yomiuri Shimbun)