Japan Press Weekly

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2017 April 19 - 25 [ECONOMY]

Japan draws criticism for working to make RCEP a ‘second TPP’

Akahata Sunday edition

The 18th round of negotiations for the Regional Comprehensive Economic Partnership (RCEP) is due to take place in Manila from May 2 to May 11. A total of 16 Asian and Oceanian countries, including Japan, are participating in the negotiations for this multilateral agreement.

The RCEP is a mega-free trade agreement similar to the TPP which failed due to the secession of the United States. The total population of the potential RCEP nations amounts to 3.5 billion, about half of the world population. The total trade and GDP of the 16 countries account for roughly 30% of the world. Several developed nations among the RCEP participants such as Japan aim to turn this economic framework into a “second TPP”, provoking criticism from other countries.

The RCEP is a free trade pact like the TPP. It intends to change laws and regulations of each member nation in order to help expand the business activities of multinational corporations. RCEP negotiations cover 15 different areas such as: “trade in goods” for reduction and elimination of tariffs; “trade in services” for deregulation of the service sector; and “investment” for protection of investors’ interests. The 15 areas coincide with those of the TPP talks, excluding labor and environment concerns. Like the TPP, the contents of the RCEP talks have been undisclosed.

However, the RCEP differs from the TPP in that it does not include the U.S., which took the initiative in the TPP talks as a spokesperson for American multinational companies. Instead, the RCEP is led by ASEAN members which put a high value on diversity. It also includes China and India, along with the least less-developed countries in the region. While the per capita GDP of the 12 TPP nations is three times higher than the world average, that of the 16 RCEP participants stands at around 60% of the global average.

The basic policy for RCEP negotiations is to take into consideration the difference in each country’s developmental stage. Thus, the RCEP has the possibility of proceeding in a different direction from other conventional FTAs.

However, Japan, Australia, and New Zealand—all signatories to the TPP—as well as South Korea which will conclude a FTA with the U.S. are demanding a “high-level” agreement. They are in confrontation with India and other developing countries, which take a cautious attitude to excessive trade liberalization.

The point is that Japan, together with other relatively economically advanced countries, is making proposals which would bring the harmful contents of the TPP into a new multilateral agreement.

Leaked information and news reports show that Japan, New Zealand, and Australia insist that the degree of liberalization in the new trade framework should be as high as that in the TPP. In addition, Japan, along with Australia and South Korea, argues that the protection for intellectual property rights on agricultural seeds should be strengthened. This argument is facing fierce opposition from farmers in India and Southeastern Asian countries who assert that such a measure would make it difficult for them to produce and save their own seeds, exchange seeds with each other, and even survive as farmers.

It is reported that Japan and South Korea are proposing that the new pact should include an Investor-State Dispute Settlement (ISDS) clause which will enable corporations to sue the government of a country in which they invested. Tokyo and Seoul also call for greater protection of patent rights for medicines.

Doctors Without Borders, an NGO that offers humanitarian medical assistance in developing countries, warns that if the proposal by Japan and South Korea is adopted, it will threaten millions of lives across the world. The NGO notes that a stronger protection of pharmaceutical patents will hamper less-developed countries’ access to affordable generic drugs which are available after the patent of the original drugs expire. The international organization points to the possibility that the RCEP may take the place of the TPP and become the worst trade deal in terms of access to medicines. The famed NGO urges Japan and South Korea to retract the proposal.