Shinzo Abe, Barack Obama and the TPP: what you need to know

Shinzo Abe, the Japanese prime minister, is in Washington this week to meet US President Barack Obama and address a joint session of Congress. Near the top of the agenda is how to close the Trans-Pacific Partnership, a 12-country trade deal that would cover some 40 per cent of the global economy.

Unless something dramatic happens, officials say, the two sides are unlikely to announce the completion of a major deal while Mr Abe is in Washington. But both sides say they are close.

Here is what you need to know.

?After more than five years of negotiations, the consensus view is that a TPP deal is coming close to fruition. The US Congress has a lot to do with that.

Japan, which joined the talks in 2013, and the 10 other countries involved are all waiting for the US Congress to give Mr Obama the "fast-track" authority he needs to close the deal. Formally known as trade promotion authority, it would guarantee that Congress would take a direct vote to ratify the TPP and would not seek to undo or revisit any details of any carefully balanced agreement reached after thousands of hours of discussions.

Bipartisan legislation to give the president fast-track authority cleared committees in both houses of Congress last week. Final votes in both houses should take place by the end of May and, while many Democrats do not like it, the vast majority of Republicans - who hold the majority in both houses - are on board.

The goal after any vote is to gather all 12 TPP trade ministers for a final negotiating round. That could all happen within the next four to six weeks, officials say.

?For both the US and Japan the TPP is a strategic as well as an economic endeavour

Economic purists like their trade agreements simple and free of power politics. That is not the TPP.

The crudest assessment is that the TPP is an effort to contain China by building a ring of interlinked economies around it. Ashton Carter, the US defence secretary, has said the TPP is more important than adding another aircraft carrier in the Pacific.

But the reality is more nuanced and has more to do with global economic governance than outright power politics.

The TPP is really an effort by what is sometimes described as a US-led "coalition of the willing" to set the next generation of trade rules before China can. That means filling big holes in the current rules by setting standards for free data flows, intellectual property and the behaviour of state-owned enterprises.

It also means, in one of the most controversial provisions, establishing an arbitration mechanism for investors that would allow them to circumvent local courts in the event of disputes with TPP governments.

There are already other Pacific countries waiting to join the TPP once it is concluded. And even Beijing has said it might seek to join some day. But that would mean playing by the rules that Japan and the US and the 10 other countries involved are now negotiating.

?Both Barack Obama and Shinzo Abe are facing tough fights on trade with members of their own party . . .

The leaders are both making the case at home that the TPP will be good for their own economies. They are also both facing raucous opposition.

Mr Obama argues the TPP will create better paying, export-fuelled jobs and therefore do its part to help the ailing American middle class. But the "progressive" left of his Democratic party is not buying the argument and fighting back hard.

Mr Abe, meanwhile, sees the TPP as a way to force the issue on reforms and open up to competition some cossetted segments of the Japanese economy. And chief among those is the politically influential Japanese farm sector. As a result, pushing the TPP forward has meant Mr Abe taking on powerful factions within his ruling Liberal Democratic party.

? . . . So both sides are doing their best to fight for "sacred" products and industries.

Soon after Japan joined the negotiations in 2013 it nominated a list of five "sacred" product areas - beef, dairy products, pork, rice and wheat - that it would set out to protect in the TPP discussions.

For its part, the US has been doing everything it can to protect the car industry and try to defend a 2.5 per cent import tariff on auto parts and a 25 per cent duty on light trucks.

There is a good reason for that. The motor industry - and Ford in particular - has been leading a push to have provisions included in the TPP that would punish currency manipulation, something Detroit has long accused Japan of.

Such a provision is unlikely to feature in the TPP. Japan and other countries would rather walk away than sign on to anything containing such language. But the currency push means Mr Obama's negotiators have to be seen to be doing everything they can to defend the car industry.

?The clock is ticking

The consensus in Washington is that the TPP would struggle to make it through Congress in a presidential election year.

That means trying to get Congress to ratify a completed deal by the end of 2015. But it is not that simple.

US officials say even after negotiations are over it will take months to ready a text to be presented to Congress. To be in with a real chance they need negotiations to be completed by June or July at the latest.

That should be possible. Negotiators have been working almost around the clock since January. But things are getting tight.

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