Japan’s Abe Sells Trade Deal to Congress

In a 50-minute minute speech in Washington, Japanese Prime Minister Shinzo Abe made his most high-profile pitch yet for a trans-Pacific trade pact that has divided U.S. lawmakers and turned liberal Democrats against the White House over concerns about job losses and wage stagnation.

Addressing a joint session of Congress, Abe said the Trans-Pacific Partnership, a trade proposal that would lower tariffs and harmonize regulations across 12 Pacific Rim countries, would strengthen the Japanese and American economies while bringing competing nations in line with an array of labor and environmental standards — a claim many Democrats view with skepticism.

“The U.S. and Japan must take the lead,” said Abe, the first Japanese leader to address both houses of Congress since World War II. “We must take the lead to build a market that is fair, dynamic, sustainable, and is also free from the arbitrary intentions of any nation.”

Abe painted a picture of Japan as the rule-abiding, democratic partner for the U.S. in forging standards for trade in Asia. Abe’s description casts Japan as the Asian country with the same economic values as the U.S., as opposed to China, though Abe mentioned Asia’s biggest economy only in passing. Advocates of the trade deal argue that the U.S. and Japan need to write the rules for business in Asia, lest Beijing do it for them.

Both Abe and President Barack Obama have touted their progress on the Trans-Pacific Partnership (TPP) during the Japanese leader’s visit to Washington. But no breakthroughs have been announced on the significant sticking points that still exist in the negotiations, namely agriculture and automobiles. Obama didn’t dodge this obstacle, saying pointedly Tuesday that he’d like to see more U.S. cars on Japanese streets.

The trade agreement, along with another European trade pact, are both part of the Obama administration’s ambitious agenda to lower barriers for U.S. companies abroad and increase exports. That goal gained urgency Wednesday after new economic data showed the U.S. economy had grown much less than expected in the first quarter. The Commerce Department said Wednesday that U.S. gross domestic product grew by only .02 percent in the first quarter of 2015, down from 2.2 percent in the last quarter of 2014.

TPP still faces stiff opposition both in Japan and the U.S. Many Americans associate trade pacts with job losses that happened across the country as globalization spurred outsourcing by many U.S. companies in the 1980s and 1990s.

“I believe that Mr. Abe is going to have a tough sell on this one, frankly,” said Jean Ergas, who teaches international economics and finance at the NYU School of Professional Studies.

In addition to convincing the public in America and Japan, Obama and Abe must also persuade their local industries and legislators. Trade negotiators still need U.S. lawmakers to agree to “fast track” the trade agreement through Congress once it’s finished. The passage of Trade Promotion Authority (TPA), as the legislation is known, would assure the other 11 countries involved in negotiations that the Obama administration can bring a final agreement before Congress and get an up-or-down vote. But the passage of TPA is far from assured, even as negotiators aim to finalize a deal this summer so it can go before Congress before the end of the year.

In the last 24 hours, Abe’s pitch on the need to break down trade barriers within a group of nations that make up 40 percent of the world’s economy has fallen on deaf ears in the House Democratic caucus, which is seizing on the TPP’s lack of provisions addressing currency manipulation.

On the eve of his speech, a group of Democrats accused Tokyo of manipulating the yen to boost exports — a claim that is disputed by economists but has nevertheless galvanized Democrats skeptical of global trade. “No doubt in Prime Minister Abe’s speech we will hear a strong plea for Congress to fast-track the Trans-Pacific Partnership,” said Rep. Rosa DeLauro (Conn.). “What we will not hear is anything about Japan’s own history of anti-free trade policy.”

While avoiding the issue of currency manipulation entirely, Abe did seek to allay concerns that a TPP deal would spawn a race to the bottom among competing Pacific Rim countries.

“In the Pacific market, we cannot overlook sweat shops or burdens on the environment. Nor can we simply allow free riders on intellectual property,” he said. “No. Instead, we can spread our shared values around the world and have them take root: the rule of law, democracy, and freedom.”

DeLauro, and other Democrats such as Massachusetts Senator Elizabeth Warren, have tried to block the GOP-controlled Congress from passing TPA legislation, but they failed to stop bills in the House and Senate from being voted out of committee last week; the legislation is expected to receive a floor vote in both houses in the coming weeks.

The Republican 2016 presidential contenders have been broadly supportive of the trade deal, as have most Republicans, but the issue has been tricky for Democratic frontrunner Hillary Clinton, whose liberal base is more skeptical of free trade. As Secretary of State, Clinton called the TPP the “gold standard” in efforts to expand free and fair trade, but in recent days, she’s been increasingly noncommittal.

“Any trade deal has to produce jobs and raise wages and increase prosperity and protect our security,” Clinton told an audience at a community college last week.

Besides purely economic arguments, Abe also argued that TPP would strengthen ties among U.S. Asian allies in the face of a rising China. “Long-term, its strategic value is awesome. We should never forget that,” said Abe.

But first things first: Obama and Abe still need to solve lingering trade issues between the two countries, particularly respect to rice and automobiles. While the U.S. is urging Japan to raise the ceiling on the amount of U.S. rice sold in Japan without tariffs, Japan wants the U.S. to drop tariffs on auto parts.

In his speech, which comes on the 70th anniversary of World War II, Abe also expressed remorse for Japan’s imperialist transgressions to the U.S. and neighboring countries during the conflict.

“On behalf of Japan and the Japanese people, I offer with profound respect my eternal condolences to the souls of all American people that were lost during World War II,” he said.

In recent months, the U.S. has urged Tokyo to make acts of contrition for its war-time actions with the goal of strengthening ties with Washington’s other key ally in the region, South Korea. In particular, the Koreans want Abe to express regret over use of so-called Korean “comfort women” as sex slaves during the second world war.

Abe’s statement on Wednesday did reference atrocities to Japan’s neighbors during the war, but in a way that is not likely to satisfy Seoul.

“I’m sure that the Korean media will find little satisfaction in this speech, as it does not come close to providing the specific expressions or actions that Koreans desire to hear and see as a prerequisite to a full reconciliation,” Scott Snyder, a senior fellow at the Council on Foreign Relations, told Foreign Policy.

Koreans have been pushing for Abe to explicitly uphold the Kono Statement, a 1993 address by Japan’s chief cabinet secretary that acknowledged the Japanese Imperial Army’s use of Korean women for work in military-run brothels during World War II. Abe did not make an explicit reference to the Kono Statement or “comfort women,” but did make a reference to previous prime ministers’ expressions of remorse over WW II aggression — an effort aimed at refuting Korean claims that he’s an unapologetic revisionist.

“Our actions brought suffering to the peoples in Asian countries. We must not avert our eyes from that,” he said. “I will uphold the views expressed by the previous prime ministers in this regard.”

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