Several LDP agricultural policy tribe (norin zoku) Diet members such as Yoshio Yatsu, Chairman of the LDP’s Comprehensive Agricultural Policy Investigation Committee and Koichi Kato, the LDP’s highest adviser, also weighed in, holding a press conference at LDP headquarters saying that an FTA with the United States would lead to the destruction of Japanese agricultural industry. This kind of scare-mongering is only to be expected from the LDP given its experience in the 2007 Upper House elections when the DPJ’s direct income compensation scheme for all commercial farm households proved to be such a vote winner in rural prefectural seats, and their fears that the same scenario might play out again in the forthcoming election. The irony is that single-member districts in Japan’s rural areas will prove a much bigger hurdle for the DPJ than Upper House prefectural constituencies, where the personal vote is much lower and policy appeals exert a much stronger pull on voters.

Having backtracked on its initial FTA commitment, the DPJ is now copping criticism from the other end of the economic spectrum. Japanese economist and Professor at Jobu University, Nobuo Ikeda in Newsweek Japan, weighed in, arguing that the impact of the DPJ’s policy switch is that the party is destroying the Japanese economy in order to protect Japanese agriculture. As we know, promoting FTAs is directly linked to the DPJ’s proposal for a direct income compensation scheme. If farm incomes decline, they could be compensated. Although the scheme was criticised as typical baramaki (indiscriminately throwing money at voters or simple old-fashioned pork-barrelling), the DPJ could defend it by arguing that it was a necessary step in the process of liberalising agricultural trade through FTAs. According to Ikeda, the change in DPJ policy removed the only ‘merit’ of DPJ agricultural policy and converted it into baramaki pure and simple.

The Secretary General of the New Komeito, Kazuo Kitagawa, appeared on NHK news, denouncing the DPJ for backtracking on its FTA plan with the United States. His criticism was mainly on grounds of principle: the DPJ is developing a habit of backing down from its pledges in the face of criticism from key lobby groups. Prime Minister Aso also made similar comments.

Japan is falling behind in the FTA stakes and as we know, agriculture is the big stumbling block. Ikeda reminds us that even South Korea has concluded an FTA with the United States, and the South Koreans are more protectionist on agriculture than the Japanese. In fact, as one US Uruguay Round trade negotiator once told me, it was always much harder dealing with the South Korean delegates than with the Japanese because the South Koreans had the unnerving habit of bursting into tears as soon as pressure for market opening was applied.

What is concerning for economists like Ikeda and others in Japan is that, after 41 years as the No. 2 economy in the world, Japan is about to be overtaken by China in terms of GDP size. This would further highlight the decline in Japan’s relative position as an economic powerhouse. Ikeda points out that the world economy (and some would argue, not only the world economy) is now entering an era of US-China hegemony. Some might call this an emergent ‘bigemony’, a position in the ‘new world order’ that Japan once aspired to achieve alongside the United States. Japan is now increasingly concerned about the G-2 (the United States and China) becoming the principal axis of strategic and economic cooperation in the Asia Pacific. Ikeda predicts that it won’t be long before even a US-China FTA is concluded. When the only survival strategy for Japan is to reinforce its export industries, which are the engines of the Japanese economy, the DPJ’s policy switch is now promising to sacrifice the whole economy in order to save agriculture.