Japanese Prime Minister Shinzo Abe will visit Washington on Friday to meet with President Trump and his top officials. This occasion could provide the new administration, which has thus far been hostile toward free trade, with an excellent opportunity to chart a new course on this critically important issue.
On the campaign trail and now in the White House, Trump has repeatedly made headlines by excoriating NAFTA, threatening to impose tariffs on Mexican and Chinese goods and withdrawing from the Trans-Pacific Partnership.
But free-traders shouldn't abandon all hope. He has expressed some willingness to liberalize trade through bilateral agreements. In particular, deals with the United Kingdom and Japan seem like realistic possibilities, especially given the relative wealth parity and strong diplomatic ties the United States shares with both of these countries.
Abe's visit could serve as a launching point for negotiations on a trade pact. And the initial framework for this deal could be none other than the oft-excoriated TPP. After all, the U.S. and Japan were the largest economies that were party to the deal. Although it involved a total of 12 countries, certain portions of the pact were written specifically for the U.S. and Japan.
That's not to say the U.S. and Japan should merely photocopy TPP after scrubbing the other 10 nations. Though he provided few specifics, Trump was right in pointing out that the multilateral trade pact was far from perfect. There is much room for improvement and a bilateral approach could present opportunities for positive change.
For example, negotiators could seek to broaden the tariff reductions set forth in TPP by insisting Japan eliminate more than just duties on 74 percent of its beef products agreed to under TPP.
By the same token, the U.S. could agree to pro-consumer changes, such as accelerating some of the ridiculously long phase-out periods set forth in TPP. The phase-out period for U.S. tariffs on Japanese pickup trucks (currently set at 25 percent) would last 30 years under TPP. Phase-outs for tariffs on autos and auto parts were scheduled to occur at a slightly faster, but still pedestrian, pace.
In terms of agriculture products, TPP would have phased out U.S. tariffs on rice and beef over a 15-year period, while tariffs on dairy products would have remained on the books for 20 years before being eliminated. Accelerating these timelines would be beneficial to consumers, businesses and the economy at large.
Beyond tariffs, U.S. and Japanese negotiators could fix some of TPP's problems that created serious issues for key members of Congress. These include unwise data localization provisions for financial services companies, uneven treatment of certain industries with regard to dispute-resolution procedures and arbitrary lifetimes for patent protections for some pharmaceutical products. Removing these sticking points would make a U.S.-Japan pact better from a policy perspective and ease the congressional approval process.
Additionally, the deal could present opportunities to expand policy changes beyond what TPP sought to do. TPP failed to address the protectionist "Jones Act," which effectively prohibits foreign-made and foreign-flagged ships from traveling between U.S. ports. Ideally, the Jones Act should be repealed in its entirety, but a bilateral deal could at least pave the way for easing its harmful effects.
Most modern presidents, even those who campaigned against free trade, have pursued trade liberalization once in office. With Abe paying a visit, Trump might have his first opportunity to continue this pro-growth trend.
Free-traders should hope he does so by initiating a bilateral deal with Japan that meets his lofty standards for greatness.
Brandon Arnold (@BrandonNTU) is executive vice president of the National Taxpayers Union. Clark Packard (@clarkpNTU) is a contributor to the Washington Examiner's Beltway Confidential blog. He is counsel and government affairs manager for the National Taxpayers Union.
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