Japan's lower house of parliament on Thursday passed the contentious Trans-Pacific Partnership (TPP) free trade deal, a move largely viewed as an empty gesture due to opposition by US president-elect Donald Trump. President Barack Obama championed the 12-nation deal saying it would enable the United States to set the global trade agenda in the face of China's increasing economic clout.
But Trump has strongly opposed the deal, casting a huge shadow over its future. Besides Japan and the US, the TPP includes 10 other countries: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. If it came into full force it would account for an enormous 40 percent of the global economy.
The TPP is seen as a counterweight to China, as Beijing expands its sphere of influence and promotes its own way of doing business - seen as often running counter to largely Western-set global standards that emphasise transparency and respect for human rights and the environment. Japanese Prime Minister Shinzo Abe has made the TPP a pillar of his economic platform to revive the nation's key exports sector. But experts say that with Trump's election the deal is a non-starter.
"Japan's hopes for the TPP (are) dead and buried," Marcel Thieliant, economist at Capital Economics, said in a note. "The upshot is that the long-term losses for Japan from the TPP not coming into force are substantial." Trump says he is in favour of free trade but that existing deals, such as the North American Free Trade Agreement between the US, Canada and Mexico, have not been fairly negotiated and don't serve US interests. The White House has warned that failure to approve TPP would put billions of dollars in US exports at risk to competition from China.
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