The government of Prime Minister Shinzo Abe has secured a seat at the Trans-Pacific Partnership negotiating table and could join in the talks as early as this July. In mid-April Tokyo and Washington reached an agreement on Japan’s participation, and approval from the other participants was quick to follow. After a mandatory 90-day consultation period between the White House and Congress, Japan will face a major test of its negotiating skills as it vies with 11 other nations to gain maximum advantage from an ambitious free-trade initiative.
The TPP’s Sweeping Significance
Any time Japan is involved in talks aimed at trade liberalization—whether in a bilateral or multilateral framework—domestic debate tends to focus like a laser on the issue of farm protection, particularly tariffs on Japanese rice. Farm groups like the Central Union of Agricultural Cooperatives have done everything in their power to prevent Japan from joining in the TPP talks, and a number of analysts and commentators have echoed their concerns that the negotiations will lead to the elimination of farm tariffs, an influx of cheap imports, and the collapse of Japanese agriculture.
But the TPP is about much more than farm trade. It is a comprehensive agreement covering not only trade in goods but the entire spectrum of policies and rules affecting economic relations, including those governing investment, intellectual property rights, government procurement, competition, and immigration. In short, the TPP negotiations have the potential to create a whole new economic order for the Asia-Pacific region. Choosing not to participate would not only mean relinquishing our opportunity to play a part in the creation of this regional order; it would be tantamount to embracing isolation and decline.
This is why the leaders of major political parties, as well as the domestic mainstream media, are virtually unanimous in supporting the decision by Prime Minister Abe and his cabinet to join the TPP process. Only the farm lobby and one or two other interest groups continue their shrill opposition, most likely in hopes of extorting maximum compensation in the form of subsidies and other government assistance.
But there is another important reason for Japan to take part, and that is the TPP’s potential contribution to the creation of a stable security environment in the Asia-Pacific region. Underlying the need for such a grouping is the regional US-China rivalry. Having two such powers active in the area is fine as long as they are not in conflict and their political, economic, and military behavior is governed by rules that everyone is comfortable with. But these are two countries with vastly differing political systems, ideologies, and values, and their current tendency is to apply the rules that suit them as they maneuver to maintain and expand their regional influence. For Japan, as an alliance partner of the United States, the TPP has a profound strategic importance as a broad-based regional economic framework capable of counterbalancing China’s power and persuading it to play by the same rules.
This is not a new strategy devised by the Abe administration; the same considerations naturally entered into Tokyo’s policy vis-à-vis the TPP when the Democratic Party of Japan was in power. The cabinet of Yoshihiko Noda was particularly aware of the TPP’s potential role in regional security and launched an all-out push to get Japan involved, with Washington’s support. Unfortunately, domestic politics prevented Noda from getting the job done.
A Position of Strength
A key point that tends to be lost in debates over the TPP and similar trade initiatives is the extent of Japan’s economic clout. The focus on farm tariffs and what might happen if they are eliminated betrays a curiously passive and fatalistic attitude toward international trade agreements. Japan is the world’s third-largest economic power, and what it says and does in such negotiations carries great weight with other participants. Japan should approach the TPP process as a leader actively involved in shaping the agreement, not as a passive observer.
Japan’s importance to the process was apparent back in November 2011, when Prime Minister Noda first announced that his government would enter into bilateral consultations aimed at securing a seat at the TPP table. Within days Canada and Mexico announced that they, too, were applying for admission, and both ended up joining the talks ahead of Japan.
More recently, Abe’s February announcement of his government’s determination to take part in the TPP spurred a variety of non-TPP countries and organizations to accelerate negotiations for separate agreements with Japan, including an FTA involving China and South Korea, the Regional Comprehensive Economic Partnership (comprising the Association of Southeast Asian Nations and six other countries), and an economic partnership between Japan and the European Union. Especially encouraging in this context were signs that Beijing was prepared to isolate economics from politics when managing relations with Japan and work for stronger trade ties despite ongoing tensions over such controversial issues as the Senkaku Islands and Yasukuni Shrine.
The truth is that ever since Japan indicated a serious interest in the TPP, everyone has been vying for its favors. It’s been years since Japan has been this sought-after. From a negotiating standpoint, one could hardly hope for a more advantageous position.
Getting Serious About Diplomacy
By contrast, the political and security environment surrounding Japan remains harsh and uncertain. North Korea continues to defy international society with nuclear tests and missile launches under Kim Jong-un, and it remains to be seen whether the young leader can consolidate his power base and put his regime on a stable footing. China continues to invade Japanese airspace and territorial waters in conjunction with its claims to the Senkaku Islands and shows no sign of moderating its hardline stance. Relations with South Korea soured over the disputed Takeshima islets in 2011 and have not improved since.
Moreover, the Abe administration dashed any hope for a short-term thaw in relations when Deputy Prime Minister Taro Aso and other members of the cabinet visited Yasukuni Shrine this past April (a gesture Japan’s neighbors see as indicating a lack of repentance over past aggression). Abe’s Diet statements defending his ministers’ conduct resulted in the cancellation of several key regional meetings, including the trilateral summit between Japan, China, and South Korea scheduled for the end of May. Meanwhile, the all-important Japan-US relationship continues to suffer from the domestic stalemate over relocation of US Marine Corps Air Base Futenma, which has eroded trust between Washington and Tokyo.
In these circumstances, it is vitally important that Japan marshal all its diplomatic resources to secure a more stable political environment. Fortunately, its decision to participate in the TPP allows it to enter into diplomatic negotiations from a position of relative strength.
Japan is by no means known for its skill in international negotiations, but the Abe administration seems determined to change that, at least insofar as the TPP is concerned. The government has put together a crack negotiating team directly answerable to the Prime Minister’s Office, composed of experts from a number of ministries and led by veteran diplomat Koji Tsuruoka of the Ministry of Foreign Affairs, who seems the perfect choice for the job. An expert in international law and economic diplomacy, Tsuruoka has a reputation abroad as a tough negotiator, a rarity among Japanese diplomats. This choice, together with the highly unusual decision to recruit the team’s 70-odd members from multiple agencies, is a sign that the Abe cabinet means business this time.
The TPP talks are moving forward even now with the goal of reaching a comprehensive agreement by the end of 2013. As the process enters its final stages, we can expect the conflicts to sharpen. Negotiations will pick up in intensity as ministers and national leaders enter the fray, bargaining for the most advantageous terms possible for their respective countries. Japan has a strong hand, but it must play its cards boldly and skillfully to gain maximum benefit from the TPP process. In the months ahead, Japanese diplomacy will truly be facing its moment of truth.
