Japan's Prime Minister Shinzo Abe was in Brussels yesterday for the Japan-EU summit and trade was at the top of their agenda.  The EU and Japan, two giants of the global economy, began negotiating a free trade agreement just over a year ago, in April 2014. 

There is one big caveat to those negotiations, namely the concern of some EU member states that, in the end, Japan would not do enough to justify the talks, especially on non-tariff barriers.  An EU Commission note on the negotiations explains the situation this way:

Well, it is decision time on that score, and in the near future we should begin seeing formal expressions of the EU's willingness to continue the talks.  That they will do so was signaled at the all-smiles press conference in Brussels yesterday with Prime Minister Abe of Japan, European Council President Herman Van Rompuy, and EU Commission President José Manuel Barroso.   Indeed, they agreed to accelerate the negotiations.

We suspect that Japan and the EU will meet their 2015 target for a completed agreement.  One might well ask, "If you are skeptical about the U.S. meeting its target of completing the TPP negotiations this year - (and we are) - why would you put any more faith in an EU-Japan target date of 2015?"

History is part of the answer to that question.  At the Senate Finance Committee's trade hearing last week, Senator Maria Cantwell, a Democrat from Washington, lamented that "While everyone else is doing deals, we're sitting here."  The last grant of trade promotion authority expired in July 2007.  Senator Cantwell noted that since then China has entered into 9 new trade agreements, the European Union 11, Japan 8, and Korea 6.   Thus the recent history of both the EU and Japan suggests that when they say they are going to get a deal done, they mean it. 
 
We pointed out in an earlier entry that price differentials matter a lot in international trade.  We are talking particularly about the kind of differentials that work against U.S. firms when their competitors have the benefits of trade agreements that don't apply to U.S. products.   Often the result of those differentials is that American firms lose market share.  That was something else Senator Cantwell talked about last Thursday, she said:

She put it well, but it is an understatement. 

Our impression in listening to members of Congress - both House and Senate - is that some start from the premise that trading with the United States is a great privilege and countries need to meet a very high standard before getting any further benefits.  Others see the United States as competing for its commercial life in a tough global environment, but one where good trade agreements can help.  Senator Cantwell would seem to be in that second group.

Unfortunately, her team doesn't seem to be winning the argument, at least not yet.  Moreover, the likelihood is that the competitive environment for American firms will deteriorate still further before the U.S. is forced back into the business of concluding solid trade agreements.  All of this, sadly, makes us think of that famous frog.  We mean the one who hops into a kettle of cold water, doesn't notice the change in temperature after the heat is turned on, and is boiled alive.

As we often do, we looked to see what Wikipedia had to say about that frog and found this:

So, in a perverse way, we are rather hoping the EU-Japan agreement and all of the major non-U.S. trade deals get done quickly.  America needs to jump out of the kettle of inactivity, pass TPA, and move forward with all of the pending agreements, starting with TPP.