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In wake of Trudeau's summit no-show, Japan raises possibility of a Trans-Pacific Partnership without Canada

Japanese officials confirmed that if all the other countries agree on a text, there's nothing stopping them from going ahead without Canada

Marie-Danielle Smith
Marie-Danielle Smith

December 18, 2017
12:28 PM EST

In wake of Trudeau's summit no-show, Japan raises possibility of a Trans-Pacific Partnership without Canada

TOKYO — Though Prime Minister Justin Trudeau balked at finalizing the Trans-Pacific Partnership last month, Japanese officials say the other countries in the trade deal could decide to push ahead on it without Canada. 

The Liberal government continues to have concerns about the agreement — as a concession to Canada, it has been officially renamed the Comprehensive and Progressive Trans-Pacific Partnership — including over the protection it affords Canadian cultural industries and the auto industry.

The Japanese ambassador to Canada, Kimihiro Ishikane, said in an interview last week that it would be better if all 11 of the countries negotiating the deal stuck together. “Some countries really wish to see the presence of Canada. Others might have less interest … So, I think this is a very delicate balance which is in question,” he said. 

“So we are sincerely hoping and strongly hoping that we can go ahead with Canada on board, yes. Otherwise this delicate balance might be affected.” 

Trudeau's absence from the meeting in November gave other countries the impression of an 'unpredictable situation' with Canada.

In interviews with the National Post in Tokyo Monday, officials from Japan’s foreign affairs ministry confirmed that if all the other countries involved in TPP talks agree on a text, there’s nothing stopping them from going ahead without Canada and letting the Canadians accede whenever they are ready. 

“It would be called TPP 10,” quipped one official; the talks originally included 12 Pacific nations, but in January President Donald Trump withdrew the US from negotiations, and the revised deal has become known as TPP 11. With Trudeau’s absence from a meeting between heads of government at an Asia Pacific Co-operation Summit meeting in November giving other countries the impression of an “unpredictable situation” with Canada, the official said, it’s natural for them to consider what might be possible without Trudeau signing on. (The Japanese officials quoted in this story were not authorized to speak on the record.)

Joseph Pickerill, a spokesman for Canadian international trade minister François-Philippe Champagne, told the Post in an email countries have agreed that whenever six out of 11 countries ratify the original TPP, the CPTPP — which modifies the existing agreement rather than rewriting it — will come into force among ratified members “while others continue to work through issues.” At present, Japan, Australia and New Zealand have ratified the deal. 

“So this could all come together at the same time, in rapid succession or any other computation or sequence. That has always been the case,” he said.

Behind the scenes of Trudeau’s APEC no-show

Meanwhile, in an interview with the National Post in Tokyo Monday, Japanese officials detailed their account of Trudeau’s APEC no-show, which led to accusations he had “sabotaged” the deal. 

According to Japanese officials, at 1:15 p.m. on Nov. 10, Japanese Prime Minister Shinzo Abe walked into a bilateral meeting with Trudeau expecting they’d be on the same page about moving ahead with the deal, after months of progress in negotiations to resuscitate the deal after the US’s withdrawal. “All morning, there were no sounds from the Canadian side saying they weren’t on board,” an official told the Post. 

But the Canadian prime minister told Abe he wasn’t ready. “It was a surprise,” and “very unusual,” according to the official. The Japanese trade minister was called in and explained the details of encounters with his Canadian counterpart, Champagne — discussions that had apparently given him the impression Canada was ready to move forward.

Meanwhile, nine other heads of government were waiting around a table for a meeting that was supposed to have started at 1:45 p.m. Unlike with the original TPP, which was agreed at a ministerial level, APEC co-chairs felt that having heads of government announce an agreement would send a stronger message internationally. Instead, Japanese officials said, this had a “negative effect.”

Abe “rushed” to join the other leaders after his meeting with Trudeau ran late, the official said, then had to explain to them that Trudeau wasn’t showing up. This was “also very unusual.”

Later the same evening Champagne and other countries’ trade ministers agreed on what the Japanese are calling an “agreement in principle” and the Canadians are calling a “framework.” A cautious statement from Global Affairs Canada announced progress had been made but warned Canada “will not be rushed into an agreement that is not in the interest of Canada.”

Part of the new framework included the new name, which the Japanese official said was to make the Canadians “feel comfortable.” The Japanese preferred to retain as much of the original TPP as possible. “The less change is better,” said the official, “including the title.” 

But Canada is still reluctant, despite having been eager for the deal’s resurrection earlier this year — a change of position that the official called “very mysterious” but which the Japanese suspect has a lot to do with the ongoing renegotiation of the North American Free Trade Agreement.

Issues still need to be resolved 

A meeting is being planned for January, at which chief negotiators are expected to finalize the actual text of the CPTPP. It is expected to be relatively short, based on seven articles agreed upon in Vietnam. Some ministers will likely hold concurrent bilateral meetings. 

The Australians were especially miffed by Trudeau’s actions in Vietnam, their officials telling travelling press at the time that Canada was “sabotaging” the deal. The Australian High Commissioner declined the Post’s request for an interview last week. Asked to comment on the possibility of a CPTPP without Canada, the Australian foreign ministry referred to comments from trade minister Steven Ciobo in November, wherein he expressed disappointment at Trudeau’s decision but also optimism that remaining irritants could be sorted out.

Pickerill said Canada has “a pathway to resolve certain issues” which are a barrier to Canada’s signing on to the deal. Canada wants a clause in the CPTPP which would apply to the entire agreement, allowing exemptions for cultural industries. (NAFTA contains a similar clause, which makes the CRTC’s Canadian content requirements possible, though it may be under threat in those negotiations.) But Japanese officials seemed perplexed about the reasons behind this, and emphasize they are not the only ones who feel that way.

Within the original TPP — which Canada signed — are a variety of exemptions for specific Canadian industries. While there’s no clause that applies to the entire document, the same chapter-by-chapter approach was used in the Comprehensive Economic and Trade Agreement the Liberal government signed with the European Union. (The bulk of both agreements had been negotiated by the previous Conservative government.)

The approach to cultural protections is not the only thing keeping CPTPP in limbo; Malaysia, Brunei and Vietnam are trying to gain ground on state-owned enterprises, services and investment non-conforming measures and dispute settlement in the labour chapters, respectively.

Canada has also raised concerns around the auto industry, especially as an impossible rules-of-origin demand from the U.S. complicates NAFTA. But Japanese officials Canada has not yet put forward any concrete proposals regarding autos. 

Pickerill said there are “too many hypotheticals” to answer a question about whether Canada is worried about the optics of being left out of the TPP. 

The government “will take whatever time is necessary to reach the optimal outcome,” he said.

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Seems that one of our potential partners is confused, I wonder about the rest?

We don’t know what Canada wants’: Japanese chorus of confusion grows over Trudeau’s TPP position

‎Today, ‎December ‎21, ‎2017, ‏‎3 hours ago | Marie-Danielle Smith

TOKYO — Japan’s former ambassador to Canada has added his voice to those concerned that confusion over Ottawa’s position on the Trans-Pacific Partnership could affect the relationship between the two countries.

At last month’s Asia-Pacific Economic Cooperation summit in Vietnam, Trudeau’s decision not to attend a meeting of leaders of the 11 countries negotiating the trade deal — a meeting which the other countries expected would finalize an agreement in principle — “grated on Japanese sensitivities,” said Sadaaki Numata, formerly Japan’s top diplomat in Canada and an advisor to the Canadian Chamber of Commerce Japan. And he said it has put the relationship into a holding pattern, with the Japanese waiting for an indication that Canada is still interested in moving forward with the deal.

“I am concerned that what happened recently might lead to a stasis in our relationship and that’s not good, that would not be very encouraging,” Numata said. “Certainly (Trudeau) may have been able to avoid a situation where people would call Canada’s attitude as something ‘unpredictable.’ … It’s true that the word ‘unpredictability’ is used in relation to (U.S. president) Donald Trump.”

Trump’s withdrawal early in 2017 from the original group of 12 nations negotiating the TPP seemed to have buried the trade pact until the spring, when Japan, with support from Canada, resurrected talks focused on forging a deal without the United States.

Until the APEC incident, negotiators perceived that things were going smoothly, said Mitsuru Myochin, a counsellor with the Japanese government’s TPP team. “We still do not know why Canada changed their attitude,” he said

In the weeks leading up to the summit, the Canadian government had signalled to the country’s media that a deal in Vietnam was by no means assured, and in the wake of the leaders’ meeting he didn’t attend, Trudeau told Canadian reporters his reluctance to commit “should (have) come as no surprise and it actually didn’t come as a surprise to people who’d noticed that I was saying that and have been saying that all week.”

According to Japanese observers, however, Prime Minister Shinzo Abe may not have been among them. “The prime minister was quite upset, from what I understand,” said Shujiro Urata, a trade expert at Waseda University. “And I think he has a reason to be moody.”

Ichiro Hara, director of the international affairs bureau at Keidanren, Japan’s business federation, said he spoke with an official who was inside the room for the meeting between Trudeau and Abe in which, immediately before the sit-down scheduled for all 11 leaders, Trudeau voiced his reservations.

“Prime Minister Trudeau said, ‘No, no, we cannot get on board. We still have problems.’ And what is the problem? There was no clear answer,” Hara said.

The 11 countries still walked away from Vietnam with an agreement in principle on a Comprehensive and Progressive Trans-Pacific Partnership — the deal renamed per a request from Canada — that included reference to four outstanding issues.

Protection for Canadian cultural industries is one of four issues preventing the deal’s finalization. But observers in Tokyo are perplexed as to what is actually being demanded. Canadian negotiators did not raise the issue until the “late stages” of negotiation, Myochin said Thursday. Some exemptions for cultural industries were already written into relevant chapters of the TPP but Canada is seeking something broader than that. The specific solution being proposed to accomplish this remains unclear even to close observers.

Malaysia, Brunei and Vietnam each have specific complaints, as well, with the last one boiling down to a bilateral dispute settlement issue. “The difference is that we know where is the problem that exists between Mexico and Vietnam. As for Canada we don’t know yet,” said Hara, calling Canada a “big question mark.”

Urata echoed that. “We don’t know what Canada wants,” he said, adding he too sees it as a “question mark.”

Asked what negotiators’ understanding of Canada’s demands are, Myochin wouldn’t comment. “All I can say at this time is that the demander should explain the details of their own request,” he said.

Canada has concerns over the automobile industry, too, but as Urata noted, in the CPTPP agreement partners committed not to touch the original TPP’s provisions on market access.

While all emphasized a strong desire to keep Canadians in the loop, foreign officials indicated earlier this week that a deal excluding Canada is not impossible.

“That is not what we would like to see but the possibility (of signing without Canada) cannot be ruled out,” Hara said.

Myochin was cautious when asked whether this could be an outcome. “I don’t want to say any decisive thing about the future situation,” he said.

All countries agreed in Vietnam on the language of bringing CPTPP into force “expeditiously,” Myochin noted. “We believe that Canada shares the same spirit and sense of timeline.”

That hasn’t come across in statements from the Canadian government, however. Shortly after foreign officials agreed to such language, with Trudeau’s approval, their statement to the press indicated Canada “will not be rushed” and a Canadian official repeated earlier this week they “will take whatever time is necessary to reach the optimal outcome.”

None of the four outstanding issues have been addressed in face-to-face meetings, Myochin confirmed, though “we are intensely working.” The details of a meeting of chief negotiators, expected for January, have not been finalized. 

Still, it is “not impossible” to conclude the CPTPP as early as next month, he said — if all partners want to do so.

After translation, legal scrubbing and a ministerial signing, countries would initiate domestic procedures of ratification. Although Japan ratified the original TPP it would need to legislate again for CPTPP. Canada need only do the latter.

Once at least six out of 11 countries ratified it, the deal would enter into force among them. Japan is hoping this will happen in 2019, Urata said.

• Email: | Twitter: mariedanielles

Marie-Danielle Smith travelled to Japan on a fellowship with The Foreign Press Centre Japan, a non-profit independent private organization.

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