WASHINGTON, Sept. 6 (UPI) -- Time is running out for what would be the world's biggest trade deal to be clinched on time.
While rumblings of the possibility of the Trans-Pacific Partnership agreement not meeting its October deadline grow stronger, politics must not pre-empt the United States or Japan from stalling the momentum forward. The price to pay for the two biggest countries in the 12-country talks to walk away from TPP would be too great for both.
Cautious optimism about the global economic outlook prevails, not least at the latest Group of 20 summit in St. Petersburg, Russia. With the worst of Europe's financial crisis seemingly behind, economic concerns now focus on U.S. monetary policy and international tax codes but most attention will be focused on Syria.
Yet this is hardly the time to lose sight of the momentum that could further open markets worldwide. With the United States looking into signing a landmark trade pact with Europe under the auspices of the Transatlantic Trade and Investment Partnership, it is in Asia's best interest to ensure that TPP is successful.
In concluding the latest round of TPP negotiations in Brunei Aug. 30, the U.S. Trade Representative's office stated that officials from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam as well as the United States still look "to conclude this landmark agreement this year," even as a slew of highly sensitive issues including opening dairy and auto markets, not to mention the sparring of pharmaceutical companies and tackling environmental regulations, being part of the mix.
But while the urgency to conclude what would be the world's most ambitious trade deal yet should be felt by Japan, it is in the United States' interest too for the October deadline to be met.
Japanese Prime Minister Shinzo Abe certainly has staked his political future into the success of TPP and, to date, the gamble has paid off.
Declaring that "if Japan alone should become inward-looking, we would have no chance of growth," Abe stated that TPP would also "significantly contribute to the security of our country and also to the stability of the Asia-Pacific region."
Joining the pact is a key part of his economic policy now known as "Abenomics," that looks to press ahead with structural reform that would include lowering tariffs on politically sensitive sectors including rice, which could obliterate some of Japan's most powerful farming groups.
The cost of TPP failing or even being watered down, however, would be far more damaging than the wrath of any single interest group, even the most powerful ones.
Massive debt, aging population, lackluster entrepreneurial incentives and energy challenges are but a few of the fundamental problems facing Japan that require the country to be an integral part of the global economy.
With China's ever-growing economic might on the one hand and Japan's seemingly continued slide on the economic ladder on the other, becoming a key player in the world's biggest trade deal to date would certainly enhance its standing in the global arena as it sits at the table to decide trade rules that will impact international markets over the next decades.
Equally important too would be an enhancement of Japan's relations with the United States. While South Korea concluded a bilateral free trade agreement with the United States in 2011, Tokyo has yet to sign an FTA with Washington. As such, the TPP agreement would effectively take place instead of a bilateral agreement between Japan and the United States.
Still, it is not only Japan that needs TPP. The United States too would be losing a tremendous opportunity to engage more actively with the Asia-Pacific region.
Granted, the treaty has caused outrage in certain sectors, most notably in the automobile industry. U.S. carmakers have clamored for tariffs on Japanese cars to be phased out only gradually, with the American Automotive Policy Council estimating that it would cost U.S. automakers $1 billion and about 100,000 U.S. jobs should tariffs be dropped immediately.
It goes without saying that certain industries in all TPP member countries will be particularly vulnerable to the competition and higher regulatory standards imposed by the trade pact. Yet the sheer size and ambition of the agreement also means that the United States would have a unique foothold in the Asia-Pacific region should it go through as planned.
With China's absence in the agreement, the United States will undoubtedly be the single most influential economy that will have a tremendous voice in shaping trade rules some of the world's most robust countries. Failure to play an active role in developing and implementing the framework would ultimately hurt the economic future of the United States.
Much rides on the success of the next round of talks in Bali, Indonesia, next month during the Asia Pacific Economic Cooperation meeting. Losing that momentum would have far greater consequences to the global economy as well as political stability worldwide than simply opening up markets on both sides of the Pacific.
(Shihoko Goto is the Northeast Asia associate of the Woodrow Wilson International Center for Scholars' Asia Program in Washington. She was formerly senior business correspondent at United Press International.)
(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)