The Trade Deal That Isn't



The trade deal that really is not a trade deal was trumpeted as a success last week. Not so much as break through as a failed tweak on Trump's and the UK's noses. The deal is this: The EU and Japan have made a deal to meet again and try to get a deal worked out. All that was agreed to concretely is what was agreed to last year. Tariffs on EU produced non automotive industrial products sold in Japan would be cut by 30% in 2019 and phased out completely by 2025. On the Japan side, Japanese electronics would have tariffs in the EU cut by 30% in 2018 and phased out completely by 2023. This has already been agreed to in December last year and waited to be signed during the G20 meetings this month as a symbolic symbol to the USA and UK.

Maybe the shelves in local Japanese won't be bulging under the weight of European quality cheeses, cold meat, or clinking with fine wine just yet. But the deal, or accord rather, is the correct terminology politically for the agreement, declaration is a means to and end. That is to scold President Trump policy of protectionism and isolation.

As for the Jean-Claude Juncker and European Council President Tusk to trumpet their Global Europe policy in the face of GB Prime Minster Theresa May. Not particularly subtle or objective, however the message is that Japan and the EU are going to give Kabuki Show appearance to the fact try as hard as they will Japan will not lower or remove tariffs on EU automobiles and agricultural products. The EU will not allow Japanese robotics in the EU without strong limits. So what was worked out is that they will try hard and accomplish nothing in the future.
 

Shinzo Abe as protector of free trade? Not likely – ever. For Japan free trade means we're free to sell our stuff anywhere we like at any price we like and keep your stuff out.

The Chinese will take note! And the USA, the UK, Australia, New Zealand, African nations that feel the EU and Japan are too stringent and unequitable on “free trade” deals will negotiate their own among each other. The EU and Japan will simply be shut out from a majority of nations that see national sovereignty as far more important than meaningless labels as “free trade” that is not free trade and “globalization” that is nothing but national sovereignty sacrificed to unelected bureaucrats in the UN and EU.

The cry of 'The let them eat sushi' is not quite so fresh as the fish need to be. Japan also faces fights with EU on wanting to expand fishing rights into EU waters in the North Sea and Atlantic. And instead of buying Japanese cars (which are set to go up in price) Australians and New Zealanders are buying Chinese and Amrican cars and are now undercutting Japanese sales. In Australia alone Japanese auto sales have plummeted 60% over the last decade. In China the goal is to own a Cadillac or Lincoln and Japanese auto makers have all but closed out of the more lucrative midclass and luxury car markets. Toyota pulled its Lexus brand out of China in 2012 and has no plans to return. Is this what they call 'negotiating'? Junker was recently complaining about an empty chamber the other day which was evidenced by footage showing it to be so. And the Abe government is on the slide after the worst vote ever for the LDP in the Tokyo elections outsmarted by Tokyo's first successful female politician. Four years a-coming but not signed yet? Abe full of ideas except none of them work out. A true analysis is that this will yet be another dead on arrival accomplishment. A further and another example of Abenomics.

A true account of something I was told years ago comes to mind. A product being made for a Japanese buyer in the USA. Everything was questioned and changed from the original, even the color. It was a leather product. Come the presentation and the Japanese buyer still hovered. Frustrated the seller asked what now was wrong. "We have done everrything you requested". The Japanese buyer replied “Ah, yeah, but I don't like the smell! It is too leathery smelling.” Imagine leather smelling like leather and not lilacs or sakura.

But for the LDP showing off is just letting the dog and pony show of working hard and accomplishing nothing go on further. I would not say that choice is too limited for European products in Japan, rather some type of censorship about what is best as quality and their price of products is limiting their sale. Abe needs to keep his rural farmer voters happy for a few more years.

It has been decided in Tokyo, when Prime Minister Abe returned from Europe Tuesday, that a shift has been made. The Abe administration now has decided there will be no deal at all if the old system of investment structure is changed in any way. This is a deal breaker for Brussels and as of that announcement EU nations all but declared the talks over if Tokyo keeps that tone. Japan's reply is “We shall keep this tone, the system will not change.”

Japanese time is slow and even slower in today's world where one consumer now knows with smart phone effort what is available all over the Earth through the Internet. Globalism has been replaced by Amazon, Ebay, and Alibaba. Just as Fed-Ex, Yamato Kuro Neko, and Sagawa replaced the post office for express delivery. National sovereignty is easily kept when the buying and selling is done on screens and keyboards. Seems Abe and Junkers have yet to realize this. The future is not free trade agreements and globalization but rather shoring up technology infrastructure and managing the virtual currency markets. The net marketplace has already steadily replaced the brick and mortar markets.

Dallas Brincrest, Editor

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