Japan Pushes Ahead for Global Trade Deals, Leaving U.S. in Cold

Automotive manufacturing, beef, cheese and wine production -- some of the United States' most lucrative exports -- are the negotiating points for two new mega-deals in the works between Japan, the European Union and other Pacific Rim nations.

Last week Japan and the EU announced tentative plans for a new trade deal with a well-publicized hand shake. Its message to the U.S. and President Donald Trump was unmistakably clear: global trade deals can succeed and flourish without U.S. participation.

The new Japan-EU Economic Partnership Agreement  (JEEPA) is so far destined to be the largest of its kind, (second to the former TPP). It will eliminate 85 percent of agricultural tariffs for Japan, helping to slash the $1.1 billion it pays to the EU as tariffs. The deal will also increase the EU's exports of textiles and clothing to Japan by 34 percent and Japan's exports of cars and food products to the EU by 29 percent.

To get around tricky negotiations with some cheese producers in the EU, the agreement will include a quota of the EU's signature dairy products. But both sides win handily in this deal, which paves the way for a fairly amicable boost in trade for countries that lobbied hard for years to establish trade deals with the U.S. and other Pacific Rim nations.

Earlier this year Trump announced that the U.S. would be pulling out of the Trans-Pacific Partnership Agreement (TPP), a deal that took years to cement. Had it gone through, the agreement would have also wrapped in negotiations with Canada and Mexico, effectively updating the North American Free Trade Agreement (NAFTA), another trade deal that Trump later decided he would renegotiate.

The remaining 11 nations of the TPP have said they will continue on with the agreement despite some reluctance by smaller nations that were counting on U.S. participation. For Japan, wrapping up the agreement is crucial to offsetting China's ability to forge an even larger partnership, one that could "rob" the TPP of the lion's share of its productive members.

All of this is bad news for the U.S., which, under the Trump administration's leadership, figured it would have the leverage to negotiate with countries on a one-to-one basis and still maintain a leading role in the global economy. With a new world order that is pushing hard against protectionism and unilateral deals, the Trump administration may find that Making America Great Again is a slogan that is best enhanced with global partnerships.

Flickr image: David Beach