Japan's CPTPP Agreement and Relationship with China

In big win for Japan, CPTPP to start at years' end after Australia ratifies Pacific trade pact

When Donald Trump entered the White House he delivered on a campaign promise to tear apart the TPP, which was a trade deal spearheaded by the Obama Administration. It would have been the largest multilateral trade deal ever and was meant as a counterbalance to expanding Chinese influence in the Asia-Pacific region. After the US abandoned the agreement, Japan took the lead to reform the agreement and hold the remaining countries together to form the CPTPP. The article discusses how the CPTPP has been ratified by the required 6 nations to go into effect at the end of the year.

This agreement isn't just a big win for multilateral free trade and the member nations, but it is also a big win for Japanese leadership on the global stage. As the United States continues its isolationist policies and focusing on unilateral free trade agreements that produce less global clout, this opens the door for another nation to fill in this leadership gap. The two "nations" that have been going around signing free trade agreements everywhere have been Japan and the European Union. Japan and the EU have always played second fiddle to American global leadership, but they are now the vanguards for liberal free-market democracies. I think the CPTPP has a major symbolic impact in that it shows that other countries can help play the role of the US while it is a little distracted. The rise of China and its strategy of creating tributary states with predatory loans should not be allowed to replace the incumbent global power balance. It is excited to see Japan play a role in helping promote the trade ideology that is being dropped by the US.


China and Japan Reset Strained Relationship

While, the CPTPP is a blow to China it doesn't mean that Japan cannot also make moves to ease tensions between the second and third largest economies in the world. With China under pressure from the American trade war, they are looking for ways to stabilize the Renminbi and build better economic relationships. Ever since the controversy over the Senkaku Islands/Diaoyutai in 2012, the relationship between China and Japan has been frozen. The protests from Chinese citizens shocked Japanese companies and dampened their desire to invest in the country.

The agreements today aren't massive, but do show that the two countries are moving in the right way. They are a three year, $30 billion credit swap between the two central banks and cooperation on overseas development projects. Additionally they are promoting a forum between business leaders in China and Japan to find areas where the two groups can cooperate instead of compete. This shift shows how Abe is making more pushes around the world to promote Japanese leadership in the era of Trump. It also shows how China is increasingly looking for more friends in the world as Trump's trade war against the country continues. It will be very interesting to see whether Japan and China can abandon historical animosity in favor of international cooperation and economic growth.