U.S. senators voice doubts on TPP deal over issues with Japan

Matthew Goodman, a former White House international economic adviser, described the failure of the U.S. and Japan to reach at least an agreement in principle last week in their bilateral negotiations as a “missed opportunity,” particularly for Japan as Prime Minister Shinzo Abe looks to institute reforms to revive a long-stagnant economy.

Correct. As Obama pointed out, Abe is enjoying great popularity. He should spend some of that political capital on something like TPP, and not wasting it on issues like comfort women and constitutional reform. Koizumi did it with postal reform. Abe should do the same, or Abenomics is going to end up just being another LDP-led spending spree. The promised reforms are no where in sight.

So, not really issues with Japan, but the TPP in general, huh?

Nice headline, though.

A senior Japanese official responsible for TPP negotiations said Thursday at a Washington think tank there was “light at the end of the tunnel” after the recent U.S.-Japan negotiations.

Really?

But he didn't say what the light was, did he?

The worst part of the TPP deal is the blanket of secrecy that surrounds it.

This is something that will affect millions of people's lives directly. It will effectively kill the internet, the National Health Service and poison our food with Genetically Modified crap. It gives the same power held by governments to large corporations like Monsanto and Philip Morris. Unable to compete with rock bottom prices, Japan's farming industry would collapse. Hundreds of thousands of people would be out of work overnight.

Certainly Japan's social structure needs a massive rethink. There are changes that have to be made. But they have to be planned changes. And they have to be made by Japanese people NOT at the order of some foreign country (the USA).

With open discussions, transparency, a bit of give and take and planning, something like TPP could work.

But the way it's going it will not.

" won’t win congressional approval anyway, unless it also addresses alleged currency manipulation by Japan."

Pot, meet Kettle. ALL of the central banks are currency manipulators.

TPP, what we know of it, is surely to further empower large US corporations at the expense of everyone else. It should be killed.

Talk about currency manipulation? How much did the FED print out dollars in the last few years?

This is called Hypocracy!

Just call it the Toilet Paper Protocol.

But Democratic lawmakers, including New York’s Sen Charles Schumer, told the administration’s top trade official Thursday that the 12-nation Trans-Pacific Partnership won’t win congressional approval anyway, unless it also addresses alleged currency manipulation by Japan.

Was that Sen Charles Schmuck, perhaps?

The BOJ's QQE targets the yen value no more than the FOMC's QEI, QEII, and QEInfinity targeted the dollar value. John Galt's first comment +1.

Japan is not actively doing anything in terms of the currency right now, and they don't need to. Abenomics has exacerbated Japan's trade balance deficit, and it now has a freshly minted current account deficit now as well, to go with it. As well as the fiscal deficit. Deficits? Japan's got em all!

So in the absence of speculative yen-buying, by default I strongly expect the yen will go down even without the Ministry of Finance selling yen for dollars. I suspect that the next intervention by the MoF will actually be in the other direction - buying yen to attempt to support it, rather than weaken it.

@ CrazyJoe: . . .LOL . . . It's sad, but true . . . Obama is ineffectual - he'll never be able to ratify anything . . .he doesn't have the political clout.

TPP would have little effect on US jobs because there are already few-to-no testrictions for American companies who wish to move their manufacturing overseas. Take a look at any "American" product from Apple to Levis, and you will find that these goods have been manufactured overseas for a long time.

America has few tariffs on imported goods, which is the main reason pretty much anything you can buy is cheaper in America than any other developed country. Most other countries add significant taxes and tafiffs to imported goods. As an exporter, I sell goods to countries around the world. In Europe, taxes and tariffs add more than 30% to the cost of my goods. Countries in Latin America charge as much as 50%. This extra tax adds enough to the final price that many people cannot afford to buy the things I sell, which decreases how much money I can make, which decreases how many goods I can buy from my suppliers, and so on.

Even if jobs are exported, these new jobs increase the standard of living in the countries where they exist. Incomes rise, poverty decreases, and these growing economies eventually earn enough money to import goods from other countries. A century ago America was a developing country. Wages were small, children worked in factories and farms (my grandfather began working in a silk mill when he was 8). But increased economic activity led to increased income, increased education, and increased work and safety standards. To deny developing countries the same opportunities pretty much condemns them to poverty.

Tariffs are less about protecting jobs and insdustries than they are a way for politicians to buy votes, increase dependence on subsidies (which increases their power) and promote inefficient operation of industry and agriculture. One need only look at the quality of American cars in the 70's and 80's, or the bankruptcies and rescues of Chrysler and GM to see the results of inefficient business practices, or the dumping of millions of gallons of milk, corn, or other crops, or subsidies paid to farms not to grow crops as other examples.

Currency manipulation is a non-issue, the Fed has pumped more than $4 trillion since Obama came to office, which is currency manipulation on an unprecedented scale.

“…Abenomics is going to end up just being another LDP-led spending spree. The promised reforms are no where in sight.”

I’d concur. Without promised structure reforms, Abenomics may bring Japan to another formation of lost decade with growth stagnation.

Here is the thing; If TPP negotiation between The US and Japan is busted, the fallout would hurt Japan more than the US in long run.

The "currency manipulation" argument is baseless. The yen's current level against the USD is generally within a range that has prevailed over the last 20 years or so.

"to further empower large US corporations"

Whereas zero tariffs on US pickups and heavy trucks will not empower the Japanese carmakers, to cite just one exampe? Yeah, right.

CURRENCY MANIPULATORS!!! LOL what the frack do you call the $4Trillion+ the Fed has printed in the last 4-5 years. the hypocracy doesnt get any better than this.

alleged currency manipulation by Japan.

Alleged? There's nothing 'alleged' about it! This is why Japan is procrastinating and trying to manipulate the terms of the TPP, so they can hang on to their price fixing practices.

@BertieWooster Could you explain how the TPP would kill the internet?

I can at least see your thinking on the others, but have no idea what you're on about with the internet.

Disillusioned, the allegations of "currency manipulation" refer to attempts to competitively devalue the currency, not manipulate the prices of specific goods / services.

I don't think Japan needs to worry about cheaper foreign stuff hitting the market here.

One, ｆolks who think Japanese rice is the bees knees will keep buying it, and if people lower down the ladder can buy cheaper foreign meat and save / invest the difference, Japan as a whole will benefit for sure. The average age of Japan's farmers is over 60 years as it is. Japan's protective systems have been an abject failure by that measure, and why penalize the entire population by making stuff excessively expensive for the benefit of those who have failed to remain competitive or evolve?

Two, Japan's currency has started a multi-year decline. So foreign goods will be getting more expensive anyway, which will benefit those local producers who pull their finger out.

The discourse in Japan seems to indicate that few here actually understand the benefits of free trade.

@disillusioned, LOL your as blind as those senators, the US Fed QE makes Japans version look like petty cash. call Japan a manipulator if you like but what would you call the US then, something a lot worse im guessing.

Go ahead without Japan. Call their bluff.

Japan's participation in TPP is over. Let the US have it without Japan. The other countries are just selling themselves to the US.

Currency manipulation is pot calling kettle black.

"the US Fed QE makes Japans version look like petty cash."

That's not true at all. Japan's QE is around three times the quantum of the US's, adjusted for economy size. Japan's QE is unprecedented.

@jeff well considering the yen has only been below the 100yen/$ level for about 5 of the last 30 years, 4 of those years while the US was doing all there QE. id say a balance is just being restored, 110-120yen/$ was what it was at before all this QE BS started. which still makes the yen strong on historical charts.

Take a look at any "American" product from Apple to Levis, and you will find that these goods have been manufactured overseas for a long time. America has few tariffs on imported goods, which is the main reason pretty much anything you can buy is cheaper in America than any other developed country.

And what has this done for your average American? No more manufacturing jobs, and cities like Detroit left to rot. Meanwhile international thugs like PRC get propped up by western companies flocking there to get the cheapest labor and lowest standards of environmental protection possible.

The discourse in Japan seems to indicate that few here actually understand the benefits of free trade.

Please do enlighten us. I can certainly see how TPP would benefit America (bringing a bunch of countries under the thumb of US influence and helping to prop up the position of the US dollar as a global currency) but how exactly is this deal good for Japan?

Certainly Japan's social structure needs a massive rethink. There are changes that have to be made. But they have to be planned changes. And they have to be made by Japanese people NOT at the order of some foreign country (the USA).

I think your comments on TPP are spot on Wooster. Its a rubbish idea. This paragraph gives me pause however. Since when does Japan's social structure need a massive rethink? It goes without saying that the direction of Japan needs to be determined by the Japanese people themselves and not by foreign countries trying to exert undue influence. But I think that most Japanese are pretty happy with the society they have. As someone who has had the "pleasure" of living in several western countries, I'll take Japanese society every day of the week. Its not even close. If you think Japan needs a massive overhaul, I'll have to respectfully disagree entirely.

For Prime Minster Abe and President Obama the whole sorry TPP tale of woe is more skin to Monty Python, it is a political dead parrot.

"This is a late parrot. It's a stiff, bereft of life, it rests in peace. If you hadn't nailed it to the perch, it would be pushing up the daisies. It's rung down the curtain and joined the choir invisible. This is an ex-parrot.”

As I said before, should never invited Japan to a free trade group. We all KNOW that Japan will protect the farmers, the auto market and the Yen. Can't believe the Obama administration is that stupid.

fxgaiMay. 02, 2014 - 11:47AM JST One, ｆolks who think Japanese rice is the bees knees will keep buying it, and if people lower down the ladder can buy cheaper foreign meat and save / invest the difference, Japan as a whole will benefit for sure. The average age of Japan's farmers is over 60 years as it is. Japan's protective systems have been an abject failure by that measure, and why penalize the entire population by making stuff excessively expensive for the benefit of those who have failed to remain competitive or evolve?

Japan has it's own shares of problem and they are hesitant on problems of TPP agreement. In less than five years, Japan goverment farm subsidies will be eliminated and most of these older farmers has to learn to survive on their own. I am not sure if the criticism of Japan is warranted for not importing enough agricutlural products. Japan already imports 60 percent of its food supply from other countries and food safety is a sensitive issue. By comparison, the U.S. imports about a tenth of its food supply and tests less than 1 percent of shipments. Sure, Japan could import cheaper California rice, but what about rural farmers in Japan that will no longer will be able compete and survive on farming. Then what? Bankrupt farmers will ask the goverment for more handouts. The J-goverment's future plans are that they are trying to maintain stability of farmers in their own country first.

what about rural farmers in Japan that will no longer will be able compete and survive on farming

Since the majority of Japanese farmers are over the age of 66, cultivate very small amounts of land, work at least part-time in a non-farming profession, and receive roughly 5% of their income from farming, all signs indicate they'll get along just fine.

In conclusion, considering the extremely (and I do mean extremely) unreasonable demands by the US, demands that the US very well knows Japan cannot meet (unless the US is really stupid), we can say that Obama and the US do not really want Japan in the TPP. All the dramatic "negotiations" are just a ploy to exclude Japan. Obama does not like Japan.