As the Asia-Pacific Economic Cooperation (APEC) summit rages on, it has been confirmed that Japanese Prime Minister Yoshihiko Noda will not express his interest in joining the first round of TPP negotiations this fall in Russia. Noda’s recent decision is likely an attempt to appease agricultural organizations, which make up a significant portion of his party’s voting base. These votes will be vital if the Democratic Party of Japan (DPJ) has any lingering hope of winning the snap-election expected early November. A number of DPJ members argue that since the TPP is a “living” trade agreement, Japan can join later down the road and do not need to be present at the first few rounds of negotiations.
But Japan’s stagnant economy requires free trade in order to be revitalized. If the government waits too long to act, major Japanese companies may decide to move production bases abroad, further accelerating the “hollowing-out” of their domestic industry and thrashing their economy. If Japan wishes to join the first round of TPP negotiations later this year, the Japanese government must show that they are making a concerted effort in reforming trade and government finance policies. But they must act by the end of the month in order to gain US sponsorship and receive a seat at the negotiation table. The first round of negotiations will revolve around such issues as eliminating or shrinking tariffs and formulating rules on trade and investment.
If Japanese officials aren't present at tariff and investment negotiations, then the Diet will be required to agree to potentially unfavorable rules when joining the TPP later down the road. Noda must come to terms with losing support from agricultural organizations and even popularity inside of his own party, and stop at nothing to pass the necessary trade reforms for Japan’s entrance into the TPP.
Let’s face it, the DPJ is already projected to have a tough time in the upcoming November snap-election. The LDP will likely win and the new Hashomoto-infused JRA is projected to steal a sizeable chunk of the DPJ’s seats. Instead of worrying about losing an election (poor Noda is being attacked by those from the opposition party, inside his own party, and grassroots political movements), Noda should focus on pushing policies that will actually help Japan. Winning this election is a lost cause -- he used up all of his political capital with the passage of the sales tax increase.
Now is time for Noda to go big and go bold. He supported the TPP in the past, but he should be supporting it now more than ever. While the US and China face economic uncertainty, the euro teeters on collapse; the Japanese government must do all it can to prepare for the worst. Joining a free trade organization with 11 of some of the most powerful economies in the Asia-Pacific will help.
Naturally, simply joining the TPP will not solve all of Japan’s woes, but it is a step in the right direction. Hashimoto is bringing with him a storm that may revolutionize the stagnant Japanese political system. Mr. Noda, why not eternalize yourself in history by revolutionizing Japanese trade before passing on the torch?