With Prime Minister Yoshihiko Noda making the last-minute decision, Japan has finally entered into talks aimed at securing its participation in the Trans-Pacific Partnership (TPP) free trade initiative. Although the belated action matched his image of “the vacillating premier,” Noda still deserves credit for making this critical decision which could heavily influence the future of the country.

　　　Shortly after Japan made clear its posture, Canada and Mexico announced their decision to join the TPP, while the Philippines and Papua New Guinea were reported to have expressed an interest in their participation.

　　　The TPP is positioned as one step on the path leading to creation of the Free Trade Area for the Asia-Pacific (TFAAP), which the Asia Pacific Economic Conference (APEC) envisions materializing by 2020. The FTAAP should be managed under rules and regulations reflecting those of the APEC or the TPP. Therefore, Japan’s participation in the TPP during the initial rule-making stage is extremely significant.

　　　Nothing seems to match Japan’s vital national interests better than taking an active part in the development of the system, as well as the rules, of the TPP in order to reflect what Japan advocates. In fact, I believe most strongly that there is absolutely no reason why Japan should remain “a silent big power” interminably; it cannot hope to develop a bright future for itself or the rest of the region without participating in the rule-making process for this new free trade initiative in the Asia-Pacific. It was only natural that Yoshimi Watanabe, the leader of Your Party (“Minna no To”), described Noda’s November 11 announcement as “a decision that regrettably came almost too late.”

　　　As expected, China reacted sensitively when Japan announced its TPP decision in Honolulu, the site of the APEC ministerial talks November 12-13. During a news conference attended by the representatives of APEC member nations, China’s Assistant Commerce Minister Yu Jianhua bluntly stated that Beijing had not been invited to join talks on the agreement in any manner, noting:“If one day we receive such an invitation to participate, we will seriously study the invitation.”

　　　U.S. Trade Representative Ron Kirk shot back, reminding China that participation in the TPP talks is “not something which requires an invitation,” and that all the Asia-Pacific nations, who believe that this trade agreement will constitute the highest standard of trade liberalization in the 21^st century, are welcome.

Equilateral U.S.-Japan-China Relationship?

　　　For today’s China, politically speaking, opening up the country to the world could very well lead to the collapse of the Communist Party’s one-party rule. Within the framework pursued by the TPP, infringement on intellectual property will no longer be tolerated. It is said that 80 percent of such infringements around the world can be traced to the Chinese state or the Communist Party. The same principles will apply to the arbitrary and dogmatic interpretation of contracts and international laws, for which China is notorious. Therefore, it will be absolutely impossible for China to accept the fundamental values of the TPP.

　　　If Japan, Canada and other nations join hands with the nine nations which at present form the TPP membership, including the US, Australia, Singapore, Peru, and Chile, strengthening economic policy coordination and contributing to the maintenance of regional order under common rules, the proposed infrastructure may be very effective as a deterrence against China.

　　　That is why China has its guard up against the TPP discussions and has accelerated its maneuvering. Fully aware of Japan’s positive stand towards the TPP, China has indicated that it expects Japan to “want to conclude a free trade agreement (FTA) involving Japan, South Korea and China,” reiterating its position to pursue an FTA with ‘ASEAN+3’ ( i.e., the 10 ASEAN members plus Japan, South Korea, and China).

　　　However, a free trade agreement among the “ASEAN+plus 3” nations has yet to take shape, and China will necessarily be forced into a disadvantageous position if the TPP continues to expand in the future. Clearly, it will be in Japan’s interest to help create a stage where nations that honor democracy and international law, including Japan, will play a central role instead of allowing China to exercise excessive influence.

　　　And yet, opposition to the TPP in the leading opposition party, the Liberal Democratic Party (LDP), as well as in the ruling Democratic Party of Japan, (DPJ), is deep-rooted. Notes Professor Tadae Takubo, Deputy Director of the Japan Institute of National Fundamentals (JINF), a private Tokyo think tank which I head:

　　　“LDP President Sadaichi Tanigaki remarked on November 12 that he sees the TPP as an agreement which is in essence a US-Japan Free Trade Agreement. He further stated that it would not be good for Japan to become so closely teamed up with the US that it ended up alienating China and the rest of Asia. Tanigaki was harping on the same fairy tale about the need for an equilateral triangle relationship between Japan, the US, and China in the Asia-Pacific once spun by former Prime Minister Yukio Hatoyama and Ichiro Ozawa, former head of the DPJ. Was Tanigaki serious? Is the LDP by any chance leaning toward China? His remarks made me doubt my ears.”

　　　I certainly hope the LDP is not proposing a switch in the central pillar of Japan’s foreign policy from the US to China in an effort to emulate the policies promoted by Hatoyama and Ozawa. If the leading opposition party errs on this major policy issue, I am afraid its ultimate decline could quite possibly be final and decisive.

　　　Opposition to the TPP, or any other issue for that matter, is welcomed so long as it reflects rational thinking. Having agreed to participation in the TPP talks, Japan will now have to come to grips with the nitty gritty of a number of difficult matters. Each separate agenda item must thoroughly be discussed to determine what rules are required to safeguard Japan’s national interests, and for that purpose, how Japan should appeal to its counterparts in the coming negotiations.

　　　The domestic industry that is most often mentioned first as likely to be decimated by TPP agreement is agriculture. However, a poll jointly conducted by the conservative mass-circulation daily Sankei Shimbun and Fuji News Network (FNN) showed some interesting results.

　　　Asked whether Japan should join the TPP, exactly the same percentage of respondents engaged in agriculture and forestry -€ 45.7 percent -€ replied “yes” as replied “no,” according to a news report of November 15. The Japanese government has kept the domestic rice market closed to foreign rice growers under a policy that levies a 778% percent tax on imported rice. Despite such protection, it is commonly recognized in Japan that rice farmers have not been able to pull themselves up by their own bootstraps. This interesting coincidence -€ that the same numbers of respondents replied “yes” as “no” -€ appears to me to reflect a change of thinking among a cross section of the Japanese, including farmers, causing them to ponder how Japanese rice farming should be made internationally competitive while still being protected.

Pros and Cons of the TPP

　　　The responses of the poll’s respondents as broken down by profession are equally intriguing.

　　　The professions in which “yes” outnumbered “no” were: services (48.5%);free-lance (56.8%);management (58.6%);clerical & technical (42.2%);and, working housewives (44.2%). Meanwhile, the sectors in which “no” outnumbered “yes” were: non-clerical workers (44.8% to 43.3) and students (56.0% to 40% ).

　　　One hears the argument in Japan that participation in the TPP would fundamentally undermine its indigenous medical and universal health care systems. It is true that there is a possibility that these agenda items, which have yet to be tackled during previous consultations among the participating nations, could be taken up for future discussions. But I would consider the most critical thing for Japan at this juncture is to first venture into negotiations, where each nation will have the opportunity to exert itself to the utmost in an effort to safeguard national interests.

　　　In view of the sorry negotiating skills of the DPJ administration, including the prime minister, it is not difficult to understand why there is concern that Japan may be taken in by the US once negotiations start. But, is there a way left for Japan to revitalize its economy without entering into TPP negotiations? Can Japan be expected to grow by keeping its doors interminably closed? Or, does Japan want to cuddle up to China because it fears being outwitted by the US? My answer is a big no to all three questions, loud and clear. The only way for Japan to make its way through the tough geopolitical arena ahead is to decide on a grand national policy, and then boldly proceed step by step, making smart choices as each individual agenda item is negotiated.

　　　There is also an argument that the TPP will only create negative effects for Japan. In point of fact, however, the potential positive effects are many. For instance, Japan has missed more than enough opportunities to reap big profits from its intellectual property. That it will be securely protected under the framework of the TPP will be a big plus. Further, rules for product specification and customs formalities will be simplified and specified. The further abolition of customs duties will be good news for small and medium-sized businesses desperately needing manpower. And, foreign products will be allowed easier entry into Japan. Likewise, Japanese products will become exportable with greater ease.

　　　The TPP naturally has its pros and cons, like almost anything else on earth. A logical way to cope with it is to deepen discussions by rationally comparing the pros and cons of Japan’s participation. Despite the absolute necessity of such a dispassionate debate, an element of emotional anti-Americanism seems to be driving the discussion among certain quarters. As long as such persons get carried away by emotion in opposing the TPP, losing sight of what it has to offer, there will be no question the prospects for Japan’s future will not be very bright.

(Translated from “Renaissance Japan” column no. 486 in the November 24, 2011 issue of The Weekly Shincho.)