Evolving a New Order for the Asia-Pacific

Confrontation over the TPP

On November 11, Prime Minister Noda Yoshihiko announced that Japan would seek to take part in the negotiations on the Trans-Pacific Partnership, a broad regional trade and investment liberalization pact. At a press conference that evening he declared, “I have decided to enter into consultations toward participating in the TPP negotiations with the countries concerned.” And he delivered this message to US President Barack Obama and leaders of other countries involved in the TPP process at the summit meeting of the Asia-Pacific Economic Cooperation forum that started in Hawaii the following day.

Two years and two months have passed since the Democratic Party of Japan came to power. The DPJ prime ministers who preceded Noda failed to understand that their job is to make decisions. Kan Naoto in particular gave top priority to his survival as prime minister and did not take responsibility for a single policy decision, whether with respect to hiking the consumption tax, participating in the TPP negotiations, paying for reconstruction following the March 11 earthquake, or revamping energy policy in the wake of the Fukushima nuclear power plant accident. It is a welcome contrast that Noda, in office for little more than two months, has already come up with decisions on tax hikes to pay for earthquake reconstruction and on participating in the TPP talks. The government faces a series of other issues on which public opinion is split, such as revision of the de facto ban on arms exports, hiking of the consumption tax, and reform of the social security system. The prime minister’s job is to make and execute decisions on these outstanding issues. So far Noda’s performance has been quite creditable. I hope he will continue to display this sort of leadership. By doing so, he can also help restore confidence in the government and National Diet, which fell to abysmally low levels under Kan after the earthquake.

Before Noda reached his decisions on reconstruction-funding tax hikes and the TPP, he had to deal with sharp divisions within his own party. In his policy speech to the Diet on October 28, Noda stated, “Japan will continue to engage in serious discussion on the participation in negotiations for the Trans-Pacific Partnership (TPP) agreement and will reach a conclusion at the earliest stage possible.” But at subsequent meetings of the project team that the DPJ set up to consider the issue, those opposing or calling for caution on Japanese participation outnumbered those in favor, and the team ended up submitting a document to the prime minister requesting him to be cautious in making his decision.

Within the DPJ, the most vocal opponents of participation in the TPP talks were the members of a group led by former agriculture minister Yamada Masahiko. Although former party president Ozawa Ichirō did not publicly express his views on the issue, it is widely known that many of Yamada’s group belong to Ozawa’s camp within the party. These were the same people who formed the core of the opposition to the Noda administration’s proposal for tax hikes to pay for earthquake reconstruction. They were also the ones who, in the voting for a new party president on August 29, supported Noda’s main opponent, Kaieda Banri, former minister of economy, trade, and industry.

In an insightful article titled ”Between Pork and Productivity: The Collapse of the Liberal Democratic Party” (Journal of Japanese Studies, vol. 36, no. 2 [summer 2010], pp. 227–54), Professor T. J. Pempel of the University of California, Berkeley suggested that the LDP’s defeat in the August 2009 election, which marked the end of its long hold on power, was due to its internal split between those pushing for improved productivity and those favoring traditional pork-barrel politics, as a result of which, except during the administration of Koizumi Jun’ichirō, it was unable to come up with effective policies to revive the Japanese economy.

Professor Pempel is quite right, but the problem he points to also exists in the DPJ. In other words, both the LDP and the DPJ contain opposing “productivity” and “pork” camps. And under the current electoral system for the lower house, consisting mainly of single-seat districts, candidates from these two parties vie with each other for the same seat even if both candidates belong to the same “productivity” or “pork” camp within their respective parties. For this reason, it is hard for a regrouping to occur that would result in two parties opposing each other along the productivity-pork axis. This is why even with a change of government Japan finds itself unable to break out of its political impasse.

The group led by Yamada in opposition to participation in the TPP process within the DPJ linked up with opponents in the LDP and the New Kōmeitō (the number three party in the Diet) to rock the DPJ leadership, and at the November 10 meeting between the government and the three senior officers of the DPJ, the party leaders reportedly warned that members of the anti-TPP camp might bolt the party if Noda came out with a declaration of intention to participate in the talks. But as of this writing (November 20), none have done so. If, however, Noda’s declaration were to serve as the trigger for a regrouping of political forces along the productivity-pork axis, it would be a welcome development to end the prolonged political impasse.

Drawing Up the Rules for a New Asia-Pacific Order

At the November 12–13 APEC summit in Hawaii, Canada and Mexico joined Japan in expressing their desire to join the TPP negotiations. China’s President Hu Jintao also referred to the TPP in a speech he delivered on this occasion, indicating that his country was prepared to accept the TPP as a framework to supplement other free trade agreement initiatives, notably the one that China is striving to create among the ASEAN+3 countries—the members of the Association of Southeast Asian Nations plus China, Japan, and South Korea. But within the Chinese government there is still great concern that the TPP is a ploy to contain China, as seen in the complaint by a senior official of the Chinese Foreign Ministry that Beijing had not received any notification about the adoption on November 12 of a broad outline of the proposed agreement. This concern on the Chinese side is likely to grow even bigger following the ASEAN+3 summit convened on November 18 and particularly after the East Asia Summit the following day. In the joint declaration issued after the Japan-ASEAN summit on November 18, Japan pledged to provide cooperation for major infrastructure projects (costing a total of ¥2 trillion), and the two sides affirmed their intention to seek to build a multilateral legal framework to deal with territorial disputes in the South China Sea. And at the East Asian Summit on November 19, the United States and China expressed opposite views on the latter topic.

It would be wrong, however, to judge that this recent set of developments is part of a drive to “contain” or “restrain” China. The main issue that the TPP process involves is the nature of the rules to serve as the basis for building the proposed Free Trade Area of the Asia-Pacific. And the goal to be pursued in the South China Sea is to put in place a legally binding code of conduct aimed at resolving the territorial disputes there fairly and peacefully. In both cases it is a matter of putting together a set of rules. The address that President Obama delivered to the Australian parliament on November 17 is noteworthy in this connection. In addition to declaring America’s intention of being engaged in the security and stability of the Asia-Pacific as a Pacific nation, Obama called for the building of a free and open international order for trade based on common rules.

With the rise of the emerging countries, particularly China and India, the distribution of wealth and power is shifting rapidly, both globally and regionally. What we require at this juncture is the evolution of a new regional order for East Asia and the Asia-Pacific. President Obama has expressed his intention of addressing this issue squarely. This is highly welcome.