New Membership Key to Expanding High-Level Free Trade

Britain is to join the Trans-Pacific Partnership (TPP). With supply chains becoming increasingly fragmented, it is hoped that Japan and Britain will work together to promote free trade.

The 11 countries participating in the TPP, including Japan and Australia, held an online ministerial meeting and agreed on Britain’s entry to the trade pact. The admission will likely be formalized after the member states and Britain sign the agreement at a ministerial meeting slated for July, and the necessary procedures are completed in each country.

It will be the first time for a new country to join the TPP since the pact’s inception in December 2018.

Following Britain’s withdrawal from the European Union, it has been placing importance on cooperation with countries outside the EU, and it is highly significant that the free economic zone created by the TPP will expand from the Asia-Pacific region to Europe.

Of the combined gross domestic product (GDP) of the TPP members, Japan, with the world’s third-largest GDP, accounts for a conspicuously large portion. The inclusion of Britain, currently the sixth-largest economy, will no doubt boost the value of the TPP’s existence.

The TPP eliminates tariffs on nearly 100% of items and sets a high standard of liberalization with rules such as limits on unfair subsidies for state-owned enterprises, protection of intellectual property rights and promotion of data distribution. Britain is believed to have accepted these rules.

The global supply chain has been hit hard by Russia’s invasion of Ukraine, and the escalating conflict between the United States and China. The free trade system is being shaken, and the World Trade Organization, which is supposed to be the driving force behind the system, is severely dysfunctional.

Britain shares with Japan not only the principles of free trade, but also such values as democracy and the rule of law. It is important that Japan and Britain deepen cooperation, strive to strengthen supply chains and promote trade.

To protect the free trade system, it is desirable to expand the number of TPP members.

China, Taiwan, Ecuador, Costa Rica and Uruguay have applied for TPP membership, and the focus will now be on whether China will be accepted.

Beijing increasingly has a tendency to effectively exclude foreign companies from government procurement, and its preferential treatment of state-owned enterprises through subsidies has also been highlighted as a problem. Under the current circumstances, it is considered difficult for China to join the TPP, which requires a high level of liberalization.

While it is important to expand the number of member states, the rules should not be relaxed to allow new membership.

The United States, which initially led the TPP negotiations, withdrew from the pact during the administration of former U.S. President Donald Trump. The current administration of President Joe Biden has not changed its stance of prioritizing domestic employment, thus there is little momentum for Washington to return to the TPP fold. With cooperation from Britain, Japan should renew its efforts to persuade the United States to rejoin the trade pact.

(From The Yomiuri Shimbun, April 3, 2023)