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What Trump’s Rejection of the TPP Means for Japan

Did a 19-second handshake manage to soften the blow?

By 4 min read

The Trans-Pacific Partnership (TPP) was a controversial topic during the US presidential campaign for all candidates. Stepping away from the deal was the first action President Trump took. For many, this was a cause for celebration, but to Japan it was the first shots fired for the breakdown of the alliance between the two countries.

What is the TPP?

The Trans-Pacific Partnership’s primary purpose was an economic one. Simply, it aimed to increase economic ties, and deepen trade relations between the 12 countries (all bordering the Pacific); along with reducing tariffs on trade goods. It wasn’t a mistake that China, arguably the country with the strongest economy in the Pacific Ocean bar the United States, wasn’t given an invitation to the cool kids table. Keeping the Western liberal economic order in the region was a major sales point of the TPP for the countries involved.

For Japan, the TPP was a deal that aimed to stimulate their stagnating economy. According to estimates by the government, the deal would have been able to increase the growth of the economy by 2.4% (reported on Forbes).

However, the US had to ratify the deal for it fully begin. Although the 12 members were all at different stages of finalization, Japan had already signed when Trump wrote a notice to withdraw.

So, it was cancelled?

Unfortunately for Abe, yes. The Japanese Prime Minister has invested huge amounts of political capital into the deal, and had been one of its strongest supporters.

After Trump signed his departure, Abe came out and quickly said that the deal was “meaningless without the US” which was presumably a little awkward to hear for all the other countries. However, as the US accounted for 60 percent of the GDP within the TPP, it’s clear to see why.

It’s not impossible for the other 11 countries to go ahead with the TPP, as they must simply change a rule which stipulated that the TPP could only be legal once the US ratified it. So now, it exists in a kind of economic limbo.

What does it mean for the future of US-Japan Relations?

Although the TPP wasn’t an integral part of the US-Japan relationship, it certainly represented a cornerstone for its future. It’s no coincidence that as soon as Trump said he would be leaving the TPP, Abe was on the first flight out from Narita. For Abe, the TPP was more than just an economic treaty, it was a strategic assurance and promise (which he had invested large amounts of political capital in) that the US-Japan Alliance was still a top priority for America.

The two met and after having a 19-second-long handshake (see below and try not to cringe), they managed to create a new economic plan. Japan proposed a bill which it said could not only create 700,000 jobs, but would also sing to the tune of a US$450bn (¥50.4 trillion) market, according to Reuters. Not bad.

The plan also established cooperation in several key areas: developing the world’s most advanced infrastructure in the US, collaborating in new areas of cyber and space; cooperation in employment and defense; and the development of robots and artificial intelligence.

A new hope

The most important thing that Abe gained from the meeting was reassurance; that even though the TPP had been halted, American-Japanese relations would not have the same fate. Trump had caused a lot of fear for the future of the alliance on his campaign trail, where he lashed out against the country in several areas such as the joint security alliance between the two nations. More recently, he has attacked the Japanese car market, accused the government of depreciating the yen, as well as criticising the ever growing US-Japan trade deficit.

However, during the meeting, Trump reassured Japan that the nuclear umbrella would stay over Japan, and even extend to the disputed Senkaku Islands by saying, “[the US] is committed to the security of Japan in all areas under its administrative control and to further strengthening our very crucial alliance.”

Thus, despite the departure of the US from the TPP acting as a blow to an already strained relationship, after Abe’s meeting with President Trump, it seems that, at least for now, there remains some hope for the future of the TPP.

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