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What can we expect from Japan’s Prime Minister Abe on the TPP?

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In Brief

Making a decision to join the Trans-Pacific Partnership (TPP) negotiations will not be any easier for Prime Minister Shinzo Abe than it was for his predecessors, Noda and Kan, and it may potentially be harder.

In post-election Japan, the domestic politics of TPP policy making has changed in some ways, but not in others.

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Unlike his predecessors, Prime Minister Abe is not openly a TPP advocate, although he is reported to be personally in favour of the partnership. He has acknowledged the importance of the TPP as one dimension of the US–Japan alliance, and was also the one who decided to start Economic Partnership Agreement (EPA) negotiations with Australia in 2006, in spite of opposition from his own party.

More recently, Abe instructed the new minister of agriculture, forestry and fisheries, Yoshimasa Hayashi, to ‘work closely with related ministers and exercise comprehensive negotiating power to engage actively in strategically promoting economic partnerships whilst avoiding tariff abolition and protecting the national interest that needs to be protected’. Hayashi will work with the minister of economy, trade and industry, Toshimitsu Motegi, on a unified government cost–benefit calculation of the impact of TPP participation. Under the previous administration the ministries provided separate calculations, which were regarded as reflecting their pro- and anti-TPP positions. Motegi revealed that the two ministers had decided to work together, saying ‘Minister Hayashi is not a spokesperson for the interests of the Ministry of Agriculture, Forestry and Fisheries. We have similar opinions’. This is a highly significant development given that in the past, intra-governmental debate on the TPP has been consistently stymied by clashes between ministries.

Abe appears to have deliberately appointed Hayashi not only because of his economic policy expertise but also because he is not an agriculture-affiliated Diet member (norin giin). This means Hayashi comes to the job without the usual baggage of personal ties and obligations to vested interests. One LDP norin giin said the appointment of a non-norin giin to the job was ‘part of a line-up for promoting the TPP’.

Some have speculated that Haysahi was chosen because the United States would see Japan as being too unwilling to join the TPP if one of the leading group of norin giin executives — the so-called agricultural tribe (norin zoku) — were appointed to the job. On the other hand, in an election-day television program, Hayashi was quoted as saying: ‘If we cannot join the TPP, then that is fine. We should not join the negotiations just because we feel indebted to the United States’.

The agricultural cooperative organisation (JA) moved quickly to get Hayashi on side after the election. In a reference to its relationship with the LDP on the TPP issue, JA’s peak organisation, JA-Zenchu, emphasised: ‘We will engage in agricultural policy campaigns as one. We have great expectations’. A group of JA leaders, including the chairman of JA-Zenchu, Akira Banzai, paid a courtesy call on Hayashi the day after he took office. Banzai told the minister that he would like the LDP to deal with the TPP issue based on the six judgement criteria that Hayashi laid down as chairman of the LDP’s Sub-Committee to Examine the TPP. The criteria encompass the LDP’s promise to oppose participation in the negotiations as long as they are premised on ‘tariff abolition without sanctuary’ as well as other conditions, including the rejection of numerical targets for cars and the investor–state dispute settlement clause, and the protection of food safety standards and Japan’s universal healthcare system.

Hayashi assured Banzai that the criteria were part of the LDP’s promise to the electorate, and that he would do his utmost to keep the manifesto’s promises. Prefectural JA political organisations are also busy reminding their agricultural representatives of the anti-TPP pledges they signed in order to secure support in the election. However, the LDP’s policy agreement with the New Komeito, which forms the basis of the coalition government, states that the government will ‘pursue the best path that is in the national interest’ with respect to the TPP. Any reference to ‘opposing participation’, which was so visible in the LDP’s manifesto, has been removed. As the prime minister commented: ‘If the premise changes, naturally we may consider participating’.

Another positive development is the appointment of trade liberalisation advocate Akira Amari as the minister in charge of economic and fiscal policy. The farm lobby sees his and Hayashi’s appointments as the Abe government’s preparing a ‘line-up for promoting the TPP’. Already pro-agriculture LDP Diet members are suspicious of the Council on Economic and Fiscal Policy (CEFP), in which Amari will play an important role. The CEFP may be put in charge of trade policy settings without any input from the party. Its expert members include free-trade and pro-TPP advocates.

Despite these developments, there are still many obstacles preventing the Abe government from moving quickly to join the TPP talks. Large numbers of LDP farm politicians have returned to the Diet, winning back most of the seats they lost to the Democratic Party of Japan in 2009. This large group includes other powerful norin zoku, including one, Koya Nishikawa, who has made it his personal crusade to stop the government joining the TPP. He is the LDP’s equivalent of the former government’s leading TPP opponent, Masahiko Yamada. Nishikawa was previously involved in WTO agricultural trade talks as the LDP’s representative, and said immediately after he was elected: ‘I am firmly against the TPP. Even in the face of tens of millions of enemies, I will stand my ground. I will tell the TPP advocates [in the party] this, too’.

As for the LDP’s intra-party Diet members’ ‘Group That Demands Immediate Withdrawal From TPP Participation’, its chairman, Hiroshi Moriyama, and many other members won their seats. The group was first established in November 2010, when former prime minister Kan showed eagerness to announce Japan’s participation in the TPP at the APEC meeting in Yokohama. Boosted by returnees and 66 new members after the December 2012 lower house election, the group now boasts 181 affiliates and, according to its secretariat, is expecting its membership to increase even further, approaching the majority of the 377 LDP Diet members in both houses.

The members of this informal group will make their voices heard in LDP agricultural trade policy-making committees of the Policy Affairs Research Council (PARC), where they will mobilise as an internal force to try to prevent the Abe administration from making any commitments to join the TPP talks. Moriyama has just been appointed chairman of a new Agriculture, Forestry and Fisheries Products Countermeasures Committee within the larger Agriculture, Forestry and Fisheries Strategy Investigation Committee of the PARC.

The stage is thus set for the same kind of internal debates and divisions that plagued the Noda and Kan administrations. Conflict is already apparent in the contradictory statements being made by various party and government spokespersons.

Another problem is the farm policy settings of the LDP, which are not conducive to opening Japan’s agricultural markets. The LDP has pledged more support and more money for small-scale inefficient farmers, with all talk of structural reform in the sector put on the backburner. As Kazuhito Yamashita, a former official at the Ministry of Agriculture, Forestry and Fisheries, points out, the LDP’s manifesto also gives the strong impression that the party will maintain the price of rice. The manifesto states that the LDP will revise the ‘individual farm household income compensation scheme that decreases the price of rice’, intervening in the market and buying up rice when the price falls — a move supported by the JA. If the LDP does not intend to lower the rice price, Japan will continue to need high tariff rates, making it difficult to participate in the TPP.

Furthermore, the ideological divide between the two main organisational support bases for the LDP — agriculture and big business — runs very deep. Keidanren and its member industrial associations and companies might have a renewed sense of optimism now that their natural partner in government has returned, but JA, which is implacably opposed to its interests being sacrificed for Japan’s industrial exporters, is enjoying the same sense of victory. Each has interpreted the LDP’s ambiguous electoral position on the TPP to its own advantage. Joining the TPP negotiations will require the government to bridge this gap in some way.

On almost all contentious issues, except for reviving the Japanese economy, Abe will bide his time until the upper house election is over in July. It appears the prime minister will now not officially announce Japan’s TPP participation during the Japan–US summit meeting to be held in February or later, and is considering postponing a final decision on the issue until after the election is over. In the meantime, Abe will ensure that trade policy matters are moved along through extensive intra-party and intra-government deliberations, although delaying a decision on the TPP will allow domestic opposition to build.

Aurelia George Mulgan is Professor at the University of New South Wales, Australian Defence Force Academy, Canberra.

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