The TPP and Japan’s Geopolitical Environment

Previously I have lamented that the discussion over the TPP in Japan was focused on slightly bizarre and narrow conceptions of the debate revolving around what the TPP will or will not do for the Japanese economy. In short, it seems unlikely to me that failing to join the TPP will either destroy Japanese agriculture, or save the Japanese economy and kick it magically into action, depending on which view you take. Simply put, the health of the Japanese agricultural sector, and Japan’s food security/self-sufficiency is already stagnant under the current system (and some argue that the current system has created such a mess). On the other hand joining the TPP is not going to make or break the ‘internationalization’ of Japan’s economy. This point deserves more attention.

Western companies may well lament the lack of access, as any self-interested actor would do, but in all cases things are not what they seem about the ‘closed’ Japanese economy. In addition to the US farm lobby coming out against the ‘closed’ Japanese agricultural sector (it’s true but it is more a case of the pot being introduced to the kettle), the US automobile industry also feigned an interest in the principles of free trade when it opposed Japanese entry into the TPP on the basis of the Japanese automobile sector being anti-competitive. Of course, the problem with that, as the Japanese car manufacturers indignantly pointed out, is that Japan does not have any tariffs on vehicle imports. And if you are worried about those nefarious non-tariff barriers to trade that one just knows the deceptive Japanese must be upholding, you would need to explain the strong and rising popularity of European cars in Japan, especially relative to the fate of the “Toyota” Cavalier.

On the broader level, natural disasters have actually demonstrated that the Japanese economy is not all that insular. The 3/11 disaster, which snuffed out a producer and intermediate-goods led comeback (where Japan is still the most crucial player, cf. consumer goods) created problems in global supply chains. The Thai floods also brought into sharp relief the fact that Japan has been very gradually to be sure, and some may argue very deliberately, been broadening its economy. The Japanese-led expansion of production networks in Asia, and now the mini-shopping spree Japanese companies are going on in the West due to the almost irrationally strong yen, is a much more consequential dynamic in the short to medium term than what are most likely to be efficiency adjustments that the TPP would likely bring.

That said, I believe it is hard to make any more specific judgement upon the TPP than what I have outlined without the Japanese government actually getting involved in the negotiations.

However since I wrote my original post over a month ago on the broader meaning of the TPP within Japan’s diplomatic world view (a more polished version appeared at the East Asia Forum here), there has been a gradual move of the discourse in Japan towards discussing these broader, more strategic issues. And in the last month the geopolitical environment has started to see some interesting developments as well, which will put Japan’s ultimate choice about joining the TPP in a longer-term context.

First there was the accusations from LDP President Tanigaki and Ishihara Nobuteru that a foreign policy that seeks to exclude China in some way from was inappropriate, or literally (ja) “tone-deaf.” This may sound somewhat opportunistic coming from the LDP, but on the other hand Tanigaki in particular is on reasonable ground here as he has always been less antagonistic toward China within the LDP. Koizumi Shinjiro then took a shot at his own party for putting their heads in the sand on the issue, which in itself is not unreasonable as a criticism, but then went on and suggested that the US should be the axis of both Japan’s economic and security policies. He accused (ja) the leadership of the LDP of pursuing a “Hatoyama-like” policy of East Asia regional integration. These kinds of discussions have been echoing throughout Nagata-cho and Kasumigaseki for the last month or so, and the discussions are certainly not confined to the LDP. Which is good.

While Koizumi the younger often has many insightful, sharp and witty things to say, I think he has misunderstood why the name “Hatoyama” has become a foreign policy epithet in Japan at least. And it demonstrates that the US remains the Koizumis’ Achilles’ heal in terms of foreign policy thinking.

The problem with Hatoyama’s thinking was that he suggested that in the short to medium term a clear choice needed to be made about aligning Japan comprehensively with one or the other sphere of influence in its broader foreign policy. While others quickly exaggerated his intensions, Hatoyama did come close to pushing the idea that Japan should align itself with East Asia more, both in economic and security and diplomatic terms, and away from the US.

If Koizumi’s statement was describing the overall debate about the TPP then I would have to agree – some of the “either/or thinking” is a bit reminiscent of Hatoyama’s binary rhetoric, imagined or otherwise.

But Hatoyama didn’t advocate a Japanese foreign policy that made Asia the major economic diplomatic focus, and the US/West as the security focus, which is probably where Tanigaki, and a fair amount of others in Japan, sit right now. As mentioned above, the Hatoyama policy supposedly looked to Asia as the comprehensive focus Japan (economically, culturally, diplomatically, militarily etc)- which is actually very close in logic to Koizumi’s own statement that the US should be the axis for Japan’s economic and diplomatic/security policy!

Another pervasive mistake, implicitly contained within Koizumi’s statement, is assuming that economically Japan can’t have its cake and eat it too. A problem with some of the more passive, multilateral conceptions of Japan’s security policy is that it can be difficult to play various sides of the coin coherently. And security policy requires coherence for it to be effective and for partnerships and responsibilities in times of conflict to be expressly understood. But in the economic, intercultural and diplomatic fields, a Janus-like foreign policy seems seems perfectly reasonable if you can get away with it- and often actually preferable.

In reality an economically integrated East Asia probably complements Japan’s security, including its security relationship with the US, better than an economically narrow ‘littoral-Pacific’ orientation, as suggested by the TPP. A number of reasonable people see stronger East Asian integration as something that would empower the US-Japan alliance in its accepted role of keeping stability in East Asia, and not undermine it. There is another school of thought that suggests, coming from the other direction, that Japan can only pursue a strong relationship with Asia on the back of a comprehensive partnership with the West and the US in particular. This is probably what Koizumi Jr. was really aiming for in his statement. However, this conception ignores the diplomatic sensibilities, and frankly the post-colonial antagonisms that still remain in East Asia, and also diminishes Japan’s own diplomatic capabilities, strengths and distinct advantages it has in Asia compared to Western countries (notwithstanding the obvious weaknesses as well). Despite protestations to the contrary there is no pressing reason for Japan, and other nations in East Asia, to align themselves strongly with the US on all dimensions of foreign policy, including the security and economic dimensions. If the price of having the US in the region while being able to pursue closer economic relations in East Asia, is more burden-sharing in the military dimension to offset US demands, then I am sure Japan and other East Asian nations would take that choice if it came to that.

The good news is that while the Noda administration has made a somewhat untidy political entry into discussions about negotiations on joining the TPP, Japan is moving ahead reasonably quickly with the “plus 3” negotiations (China, Japan, Korea) within the context of discussions on the TPP. At a trilateral summit in Bali the three countries agreed to push (ja) on to starting negotiations next year after a collaborative study group finishes its investigation on the key issues for getting agreement. Overall Japan-China relations seem to be going well and there is talk of strengthening the relationship by going deeper than just looking at a ‘mutually reassuring strategic relationship’ (戦略的互恵関係). Discussion on resource sharing in the East China Sea between the two countries has also restarted. Caution and skepticism is always the appropriate default for understanding Japan-China diplomatic relations, as so strongly emphasised by 2010’s events, however China-Japan relations did get off on the right foot after Noda’s inauguration (en), with both sides deserving credit. It may well be that the TPP, Japan’s interest in it, and Obama’s recent strategic victories in East Asia, may force the Chinese to play softer ball with Japan in the mean time. Developments working in Japan’s strategic favour in the short-term are Myanmar’s rather unexpected about-turn, the Darwin Marines announcement, the TPP and Japan’s interest in this, Japan’s overtures to ASEAN, and the Philippines, Vietnam, and Indonesia in particular, India working closer with everyone but China, potential US military cooperation with Indonesia, and the boost all of this has given to intra-ASEAN relations. Possibly equally important is that on their own any one of these might have made the security environment quite tense, but the sudden and cascading nature of all of these developments seem to have created considerable diplomatic space for Japan to pursue its varied interests. It almost seems of late that Japan has had some diplomatic ‘presence’ which has not been a pervasive description of Japan’s foreign policy for some time. It is not often that a Japanese PM can talk all at the same time of ‘restraining’ China, involving Japan in multilateral negotiations over the South China Sea, while pushing forward on deepening relations between with China with little noise emanating from that direction (ja).

It is in this context the TPP becomes meaningful if talked about and pursued in the right way in the diplomatic context (that is to say, avoid conceptions like Nagashima’s or Koizumi’s). It may well be a way of allowing Japan to participate in what could be a valuable economic development, but it may also give Japan, when pursued in tandem with the potentially more lucrative “plus 3” deal, a bit more leverage in managing its security environment without fear of retribution from one party or another. Specifically, the TPP seems to have allowed Japan to avoid incurring US wrath on Futenma and/or on pursuing East Asia-centric economic regionalism. Irrespective of how the TPP turns out it provides whatever government is in power in Japan some short-term security – after all, one of the number one priorities for any Japanese Prime Minister in the current domestic political environment is to avoid the US, willfully or otherwise, bringing down a government due to said government’s foreign policy credentials being undermined by superficial appearances of strategic discord between the allies (see Hatoyama, Yukio). And while it seems that China might in the short-term be cowed by the strategic blunder that was 2010 and what now appears to have transpired from that, Japan not putting the boot in in the short-term may well be a significant diplomatic enabler later on down the track. Obviously global financial tensions and concerns about China’s own economic stability right now need to be given due consideration.

The Japanese interest in TPP has also seemingly given a bit of a spur to ASEAN plus 6 EPA negotiations, particularly as ASEAN, accustomed to being in the driving seat of regionalism, now faces a renewed “plus 3 threat” as well as the TPP challenge to its prized “multilateral” leadership.

Japan in the various arrangements - Asahi Shimbun 18 November 2011

However, the existing TPP group of 9’s “defensive” decision at APEC to forge ahead without Japan, Canada and Mexico, has made Japan’s accension much less attractive for Noda or the Japanese government in terms of what can be concretely gained from the TPP. The main attraction, perhaps more than the economic benefits, for Japan, was the ability to influence the making of norms and trade rules in what some see to be a pathfinder trade agreement to a broader Asia-Pacific one. The idea here seems to be that now with Japan potentially on board the TPP becomes worth its while, especially for the US. However by excluding Japan from the initial stages they can push the Japanese to accept whatever type of agreement is forged between the group of 9, without giving Japan the chance to raise objections or gain for itself exceptions, except in the drawing up of schedules phase. This is too clever by a long way however. The TPP is not necessarily that valuable to Japan economically, or that crucial to its ‘internationalization,’ that they would necessarily play along with any seriousness. Excluding Japan in this way just makes it all the more easier for Japan to play along for the next year or so and then say no when something not particularly tasty for the Japanese palate is put on the table.

This all assumes of course that things will go as smoothly as the plus 9 countries expect in terms of even negotiations with those countries, which, as belaboured previously, is an assumption one should not bet on. Nevertheless, Japan should enjoy, and perhaps just maybe even aggressively seek to take advantage of, the diplomatic opportunities on offer right now.

The latter of course, requires some domestic stability and consensus, and Noda’s diminishing political prospects as he tackles the thankless job of trying to unite the DPJ around a fiscal plan (including tax rises) for the near future, will be of concern.

Edit: Micheal T. Cucek has an uncanny habit of providing very useful and succinct summaries of my posts. This latest one  is so helpful it is worth providing it here as the effective conclusion to this post:

The key takeaway is that the TPP does not detract from Japan’s options as to strategic alignment but adds to them, forcing other actors within the East Asian drama to be cognizant of Japan’s more varied ecosystem of strategic choice.