Up Against The Wall On The TPP

Prime Minsiter Noda Yoshihiko has an insane schedule this week, and all over a project that he inherited, not initiated.

Noda will meet with Kamei Shizuka (I will admit it, I include the live link solely for the singing) the leader of the People's New Party, the Democratic Party of Japan's coalition partner. Noda and Kamei will confer on whether or not Noda should notify the leaders of other Asia-Pacific nations this weekend that Japan will enter negotiations to join the Trans-Pacific Partnership. Given that Kamei spoke out against such an announcement at a multi-party meeting yesterday (en) one can be fairly sure of the tenor of today's conversation.

The DPJ's TPP project team will wrap up their search for a common ground within the party on Japan's participation in TPP negotiations on Wednesday. They will then report their findings to the prime minister and the leadership of the DPJ. That they will report the party hopelessly divided on the subject of the TPP with no common ground to stand upon is a foregone conclusion.

On Thursday, the prime minister will consult with the Cabinet, coming to his final decision, yes or no, on announcing Japan's participation to the leaders assembling on Saturday. He will then give a nationally televised press conference explaining his decision.

On Friday, the PM will face the hostile questioning of the opposition in Diet Budget Committee session. Despite the session's being ex post facto it promises to be an absolute doozy, given that every opposition party except the Liberal Democratic Party has already declared itself against Japan's participation in TPP discussions.

On Saturday morning the PM flies to Hawaii for the APEC meeting, and his fateful meeting with President Barack Obama, who is expecting a "Yes" from the PM on TPP.

The PM's mad week is testament to the difficulties of the decision facing Prime Minister Noda.

1) This a binary decision, yes or no, thumbs up, thumbs down. Noda, however, is Mr. Compromise, always trying to finesse a middle position, as was demonstrated in the offer made yesterday to the LDP and New Komeito to have the Tohoku reconstruction bonds have a 25 year maturity. The DPJ had been insisting on a 10 year maturity; the LDP had insisted on a 60 year maturity.

For the TPP, there is no gray area in between.

2) Unlike in the Republic of Korea, where the political classes made sure to reform the electoral system, diminishing the political influence of agriculture before embarking on full-scale, multi-directional free trade agreement initiative, Noda is stuck with a Diet elected through an unreformed electoral system, giving farmers and the domestic food production industry -- an extremely inefficient industry that by definition provides a lot of folks with jobs -- an inordinate influence over lawmakers and the government (How many bureaucrats are there in the Ministry of Agriculture, Forestry and Fisheries? Uncountable multitudes...).

Even though electoral reforms stripping the rural prefectures of their representatives is mandated by decisions of the Supreme Court, the Diet has not quite found the time to pass these reforms yet. The cart, therefore, is before the horse.

3) Yamada Masayuki is not kidding when he is saying that there will defections from the DPJ should the prime minister decide to press forward with formal TPP negotiations. This will be a body blow to the prime minister, who made unity of the DPJ one of his core promises at the party leadership election in September.

4) As stated above, participation in TPP is not Noda's cup of tea, but something he had passed on to him. The situation is completely different from the one that brough Koizumi Jun'ichiro into conflict with the membership of his own party over the LDP's addiction to the votes garnered by the postmasters and the pork barrel projects funded by the fiscal investment and loan program (FILP). Koizumi had been railing against Japan Post for two decades prior to the final confrontation with the party in July-August 2005. He was willing to accept party defections because he was fighting for his own hobby horse.

5) The effects of participation in large multilateral economic structures does not necessarily guarantee the passage of the internal reforms necessary to put a country on a sturdy politico-economic footing. Just ask the Greeks about this.

6) One can be a paranoid anti-Chinese nutter and pro-military alliance with the U.S. enthusiast...and still see the TPP as the stake through Japan's heart. Just read Inada Tomomi's piece in the Sankei Shimbun (ja). Yes, it is that Inada Tomomi, the one who tried to lead a delegation of LDP Diet members to Ulleung Island, only to be denied entry to the ROK.

All of the above must be swirling around inside the prime minister's head, probably without the necessary ironclad belief in the law of comparative advantage.

Lots of folks are predicting that in the end, the prime minister has no choice but to go forward with an announcement that Japan will be an active participant in TPP negotiations. Then again, as Michael Sutton has pointed out in The Japan Times (Link) a lot of folks in the "inevitable" business enjoying getting their salaries, plane tickets, hotel rooms and meals paid for by the kinds of companies that benefit most from trade liberalization.

What will the prime minister decide? Hell if I know...and that is the only intellectually honest answer anyone can give.