Japan and the TPP

Given the grave state of Japanese agriculture, it is perhaps unsurprising that a scholarly consensus is developing around the idea of massive structural reform. For many reform-minded scholars, analysts, and politicians, the TPP represents the most promising catalyst for reform.[1] The TPP is a regional free trade agreement (FTA) in the Asia-Pacific which has its origins in the Trans-Pacific Strategic Economic Partnership Agreement (TPSEP) concluded between Singapore, Chile, Brunei, and New Zealand. In 2008, the USA opened negotiations, quickly followed by Australia, Vietnam, and Peru, with Malaysia joining in 2010 and Canada and Mexico in 2012. The agreement’s stated aim is to reduce barriers to trade among member states by completely eliminating protectionist measures such as tariffs and subsidies and harmonizing regulations across the member states.[2]

Prime Minister Koizumi (2000—2006), a neoliberal reformer, was the first Japanese prime minister to seriously push agricultural reform as part of his attempts to restructure Japan’s economy. Agricultural reform was one prong in his attempt to gain access to foreign markets through signing FTAs.[3] However, his main battle was the privatization of Japan Post, and although he publicly stated his desire to implement ‘drastic reform’, the eventual reforms were modest.[4] From 2009, the Democratic Party of Japan (DPJ), a more urban-focused party, took power. Prime Minister Kan Naoto was the first Japanese prime minister to publicly announce interest in joining the TPP negotiations in 2010, going as far as to call the TPP the ‘third opening of Japan’, after the Black Ships of 1853 and the defeat in 1945.[5] Prime Minister Noda Yoshihiko went one step further in 2011 when he announced that Japan would begin prenegotiations with a view to full participation.[6] [7] However, neither administration was strong enough to sideline the anti-TPP voices within the party, who cited not only damage to agriculture but also food safety and the healthcare system, among others.11

Meanwhile, the LDP seemed to oppose the DPJ’s moves to join the agreement, at least until Abe Shinzo took over leadership in the September 2012. Even then, the election manifesto was ambiguous, stating only that any agreement to participate would be based on the party’s own evaluation criteria and would not involve ‘throw-away compromises’.[8] This apparent resistance was unsurprising given the party’s long-standing links with the countryside. However, shortly after assuming office, the new Abe administration announced that Japan would formally join the TPP negotiations. Although this was seen as a major U-turn, and Abe had previously come out against the agreement, shortly before the election he had in fact floated the idea of joining.[9] During his previous stint as prime minister, Abe had shown little interest in economic reform, rolling back some of Koizumi’s policies and focusing instead on his own political agenda of patriotic education and constitutional revision. His tenure was unpopular and short-lived. Interestingly agriculture, in the form of scandals involving two consecutive agriculture ministers, was part of his downfall first time around. In his second iteration as prime minister, Abe has initially held back on his nationalist agenda, emphasizing the economy with a tripartite set of policies also known as Abenomics. Abenomics demonstrates a pragmatism absent from the first term, but also generates political capital that can be used to advance the less popular, nationalist agenda.[10] Thus, as outlined in the next section, it is likely that Abe’s change of heart had less to do with a burning desire to reform the agricultural sector and more to do with his security policy, China, and the Japan-US alliance.

The final agreement announced in October 2015, if implemented, will see the wholesale elimination of tariffs over a wide range of goods, and eventually remove almost all tariffs on all agricultural products. The ‘sacred five’, dairy products, pork and beef, rice, wheat, and sugar, which have historically enjoyed high levels of protection, were not exempted, but Japanese negotiators did win concessions: the effects on beef vary from product to product, but overall there will be a major reduction in tariffs, with some, such as those on offal and processed beef products, being eliminated.[11] On the other hand, these reductions will take up to 16 years, and even after this a 9% tariff will remain on fresh, chilled, and frozen beef. The story is similar for pork, which has been the subject of exemptions in previous FTAs: tariffs on many pork products will be completely eliminated, while others will see significant reductions, again over 16 years. Dairy, which has seen shortages due to the massive decline in domestic production, will see increased tariff rate quotas (TRQs, import quotas with lower tariffs) and reduced overall tariffs, with the elimination of some tariffs (e.g. cheese) entirely. This will take place over 21 years. All poultry tariffs will be eliminated over the next 13 years. As for sugar and wheat, the final two sacred products, some tariffs will be eliminated, but many will remain, albeit some in a reduced form. However, in both cases Japan will create expanded TRQs of 95,000 tonnes and 150,000 tonnes, respectively. Beyond tariffs, the agreement covers a wide area of issues including the protection of intellectual property rights, sanitary and phytosanitary measures, access for foreign investment, and opening state procurement, much of which is controversial among consumer groups, NGOs, and unions; however, these controversies are beyond the scope of this chapter. Overall, the tariff reductions are dramatic and will fundamentally alter the landscape of Japanese agriculture. They will be phased in slowly, however, and the Japanese government is already working on countermeasures in order to lessen the blow. How effective these measures will be, remains to be seen - previous subsidies following the Uruguay round of the General Agreement on Trade Tariffs in 1990 cost the Japanese state 600 million yen, without being tied to any increase in competitiveness for Japanese agriculture.[12] I will return to the implications of these tariff reductions later in the chapter: first, I turn to the development of the TPP as a US-led enterprise, a key plank in the containment of China and the ‘Asia pivot’.

  • [1] Naoi and Urata, ‘Free Trade Agreements’, 326—349; Solis and Katada, ‘Unlikely Pivotal States’;Harada, ‘Japan’s Agriculture and the TPP’.
  • [2] For an outline of the implications of the TPP for Japan, see Cooper and Manyin, ‘Japan Joins theTrans-Pacific Partnership’.
  • [3] George Mulgan, Japan ’s Agricultural Policy Regime.
  • [4] Ibid, 276.
  • [5] Kan, ‘A Message from the Prime Minister’.
  • [6] Solis and Katada, ‘Unlikely Pivotal States’.
  • [7] Solis, ‘Japan’s Big Bet’.
  • [8] Liberal Democratic Party of Japan, Election Manifesto, (2012).
  • [9] ‘Noda to tell Obama Japan Positive about TPP’.
  • [10] Pekkanen and Pekkanen, ‘All about Abe’; Hobson, ‘The Tragedy of Shinzo Abe’.
  • [11] United States Department of Agriculture, ‘Fact Sheet’.
  • [12] ‘TPP goi ikinai no hanei to antei no ishizue ni’.
 
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