In his tenure as prime minister, Yoshihiko Noda has embraced two political causes: doubling the consumption task to repair Japan’s public finances and signing on to the Trans-Pacific Partnership (TPP) trade negotiations (which aim to deliver full market liberalization) to restore economic vitality. Success on the first front, with the passage of the consumption tax bill on August 10, 2012, almost wrecked Prime Minister Noda’s career: it resulted in a revolt in his Democratic Party of Japan (DPJ) with close to 50 members following rival party elder Ichiro Ozawa in leaving the party. Mr. Noda then had to reach out to the opposition parties―the Liberal Democratic Party (LDP) and Komeito―to secure passage of the legislation, but in exchange he agreed “soon” to hold a general election that his party is expected to lose by a wide margin. Since then, the continuous flow of defections from Mr. Noda’s DPJ means that the party holds a razor-thin majority in the Diet: the defection of only six more members would be sufficient for a no-confidence vote to pass and for Mr. Noda to be removed from office.
And now, in a surprising move, Prime Minister Noda seems to be leaning toward reviving the TPP campaign to shore up the electoral fortunes of his party. The media has reported that the Prime Minister is making preparations to announce Japan’s formal bid to join the TPP negotiations, and then to dissolve the Lower House by the end of the year. Key figures in his Cabinet have also hinted to an early resolution of the TPP question, with Economy Minister Yukio Edano stating that such a decision must be made before the end of Mr. Noda’s term, and National Policy Minister Seiji Maehara commenting that this trade initiative should be at the center of the electoral debate.
The timing of the TPP revival in Prime Minister Noda’s political strategy can be attributed to a number of factors: 1) with the re-election of President Barack Obama, the trade negotiations are expected to gain speed, putting a premium on Japan’s accession to the negotiation table, 2) as the Prime Minister has gained the support of the opposition parties to pass a crucially important debt financing bill, he now has more leeway to push for the TPP, and 3) the threat of further defections from party members does not loom as greatly on the eve of calling for general elections.
But this latest turn in the TPP saga presents us with a rather interesting political conundrum: the decision to make participation in an unprecedented trade agreement a cornerstone of the party’s electoral campaign. Most politicians around the world shy away from championing trade deals during elections for fear of the political backlash; in Prime Minister Noda’s calculation, campaigning for TPP membership could actually result in an electoral advantage. Why might this be the case?
For starters, it is about “policy distance.” The DPJ is seeking to differentiate itself from its competitors. This has become an important concern for party leaders as seen in recent intra-party debates on the benefits of adopting a more centrist foreign policy given the emergence of more hawkish candidates in rival parties. A pro-TPP stance will similarly create a clear choice between the DPJ and the LDP, and will put the latter party in an uncomfortable position since the Liberal Democrats do not want to alienate the agricultural lobby (which is strongly against the TPP) on the eve of an election. Second, the DPJ is seeking to rally those groups that have tirelessly supported the TPP―most notably the business community―with the aim again of outflanking the LDP in one of its core support groups. Third, the DPJ is fully aware that the political environment for discussing the TPP today is dramatically different from a year ago. The charges of American domination and alienation from China that critics leveled against the TPP have lost resonance in the aftermath of major frictions over the disputed islands this fall.
Putting the TPP in the center of the national debate is indeed a very welcome development. Japan stands to benefit substantially from TPP membership as it would push forward structural reforms, shore up the competitiveness of Japanese industry, and help avoid marginalization from trade negotiations. But the electoral dividend of the TPP is questionable given the steep loss of confidence in the DPJ (with approval rates for Prime Minister Noda below 20 percent) and the fact that public attention is focused elsewhere: on the future of nuclear energy. The move could also backfire if a second mass exodus from the party leaves the DPJ a much diminished electoral force.
A lot is at stake, therefore, on Noda’s decision to embrace the TPP cause as his last political act before calling for elections. Even if the TPP does not save Noda’s political career, it could still become his legacy, if the succeeding administration were to pragmatically argue that Noda’s pledge to the international community should stand. But certainly the TPP countries will wait for the dust of an electoral contest to settle before assessing whether Japan is committed to the Trans-Pacific project.
The market access negotiations [of the Trans-Pacific Partnership] have been conducted bilaterally, so there is a fair amount of bilateralism embedded in the [TPP] agreement, but then you had all the benefits of multilateralism added to that in terms of rules that apply across the board. The problem with the bilaterals is we actually have tried that approach and we found that it is extremely time-consuming. So, none of these new bilaterals being discussed in the Trump administration are going to materialize overnight. They take a lot of time to negotiate—years, probably—and they tend to generate rules that are idiosyncratic.
If we [the United States] have less access to these [international] markets, we're going to have fewer opportunities to create jobs in the export sector. Also, if we decide to tax imports, there are a lot of people in this country dependent on imports and we're also going to see people lose their jobs.
Will the American business community sit idly by and watch Trump undertake a trade war with China? They have a lot at stake in this. [Trump's stream of anti-Chinese Tweets poses risks of being misunderstood.] China would regard a potential challenge as more dangerous than it actually might be.