Abe reaffirms conviction that TPP benefits Asia-Pacific

Japanese Prime Minister Shinzo Abe’s conviction that a Trans-Pacific Partnership (TPP) pact will help bring prosperity to the Asia-Pacific region is unaltered, he said on Tuesday.
After US President Donald Trump pulled out of the 12-nation pact, Japan has been exploring options to revive the pact without the US, hoping it can eventually convince Trump to reconsider.
Negotiators from the remaining 11 members have sought ways to resuscitate talks and deepen economic ties without the US that appears increasingly suspicious of multilateral deals.
Abe urged global policymakers not to view trade as a “zero-sum” game but instead seek to remove barriers that hamper innovation from crossing borders.
“I do not think TPP is losing momentum,” Abe said at a seminar hosted by the Wall Street Journal newspaper in the Japanese capital.
“Japan wants to exert leadership so that we can steer the debate toward a clear direction at a ministerial meeting in Hanoi.”
However, Abe said he did not rule out the chance of signing a bilateral free-trade agreement (FTA) with the US, an option Washington favors.
“It is among the various options available for Japan,” he added. “But we need to discuss more what is best for Japan.”
In a sign of hope for Japan, new US Trade Representative Robert Lighthizer will attend a meeting of trade ministers from the 21 Asia-Pacific Economic Cooperation (APEC) countries on Thursday and Friday in the Vietnamese capital of Hanoi. Many TPP signatories are expected to attend.
Speaking at the same event, Bank of Japan (BoJ) Gov. Haruhiko Kuroda said he was “quite sure” the central bank could smoothly exit from its massive monetary stimulus when the appropriate time to do so came.
But he also said the BoJ “always” had room to expand monetary stimulus to achieve its 2 percent inflation target, indicating that wages and prices had been slow to respond to improvements in the economy.
The remarks suggest the BoJ is in no rush to swing monetary policy in either direction, particularly toward cutting back on stimulus with the economic recovery still fragile.
“There may be some challenging issues, but I am quite sure the BoJ has enough tools” to manage an exit from its stimulus program, Kuroda told a seminar hosted by the Wall Street Journal in Tokyo on Tuesday.
For whenever the BoJ decides to withdraw stimulus, Kuroda said there might be lessons to learn from how the US Federal Reserve normalizes its ultra-loose monetary policy.
“But the US is the US, Japan is Japan. At this stage, we are not exiting,” Kuroda added, stressing that the BoJ was nowhere near an exit from its massive stimulus program with inflation distant from its 2 percent target.
Under a new framework dubbed yield curve control (YCC) that was put in place last year, the BoJ caps long-term interest rates around zero percent via aggressive asset purchases.
With inflation stubbornly stuck around zero percent, BoJ officials have stressed that any exit from massive monetary support would be some time away.
But many market participants expect the BoJ’s next move to be a withdrawal, not an expansion, of stimulus as the economy shows signs of strength, thanks to a rebound in global demand.
Some analysts worry about the sustainability of the BoJ’s stimulus program, with the central bank having already gobbled up 40 percent of the Japanese government bond market.

Source: Arab News