Japan from the inside out

Is the truth a lie?

Posted by ampontan on Sunday, November 20, 2011

DURING the past week, a debate has been underway in Japan about whether the government promised the Americans they would join negotiations for the Trans-Pacific Partnership, or whether they promised only to hold discussions about joining negotiations. Wait, don’t fall asleep — I know that’s abstruse, but the Japanese national conversation, in which everyone is participating except the Noda Cabinet, involves more than just buying and selling. It also includes the questions of whether the TPP is an American attempt at economic hegemony in the Pacific to counteract the move of China to establish its own hegemony, and whether the Noda Cabinet is being honest with the Japanese public and the Diet on a matter of critical importance.

Prime Minister Noda and the foreign ministry swear that he never committed to joining TPP negotiations during the APEC summit last weekend. Perhaps they are telling the truth — and perhaps that truth is concealing a lie.

During that summit, Economy, Trade, and Industry Minister Edano Yukio met with United States Trade Representative Ron Kirk. NTV (Nippon Television Network) this week ran a video that it claims shows a binder with talking points prepared by the METI bureaucrats for Mr. Edano to use in the discussion.

Here’s a screenshot of the document:

Here are the talking points:

● Immediately before departing Japan, and following a national debate, a decision was made by the Noda administration to participate in TPP negotiations.

● There was discussion about why a decision (should) be made now, when recovery and reconstruction (from the Tohoku disaster) is our greatest priority, but it was resolved that Japan’s participation in TPP would be in Japan’s own interest.

● First, using the TPP to foster a regional order that can comply with sophisticated rules in the Asia-Pacific region, and our participation in that process, is in the Japanese national interest.

● Second, overcoming the trials of extensive liberalization will result in greater growth capacity for Japan.

● Japan is prepared to submit all categories and sectors to negotiation, including non-tariff measures. We intend to conduct a strong debate during those negotiations.

● We understand that the approval of all the nations concerned is required for our formal participation in the negotiations. We want to proceed with lively discussions with your country in particular and participate in negotiations as soon as possible. We would like to ask about specific ways for moving those discussions forward in the future.

In re: WTO – ITA

● Expanded negotiations for ITA (information technology agreements) are, with the TPP, one way to break through to trade liberalization in the future, and will be a good stimulus for the Doha Round. We want to continue to be closely linked to this in Japan.

No one other than those directly involved knows the specifics of the Edano-Kirk discussions, or whether Mr. Edano actually said what is written here. (Here’s what he said they said.)

But if this document is on the legit, it would explain the reason the Americans are sticking with their story (and not changing the report on the government website) that the Japanese promised to hold negotiations and to put all goods and services on the table. It would also demonstrate that the Noda government is, as is widely suspected, lying about it all.

One’s position on the TPP pro or con is irrelevant here. What is relevant is whether the government is lying to the people about a matter that will significantly change Japan. Also relevant is whether this decision is being made by the elected government or is in fact yet another decision made and executed by the unelected government of the Kasumigaseki bureaucracy, using politicians as their tools.

It should be remembered that many people, some of who are in the DPJ government, were upset for years because they thought the old LDP governments lied about allowing American naval vessels to bring nuclear weapons into Japan. One of the first things they did was to retrieve and make public documents showing that the LDP governments did, in fact, let the Americans bring nuclear weapons into the country. (The U.S. stopped in the early 90s. The public responded with a collective yawn at the revelations, however. It was an issue for people of an older generation.)

The LDP thought their actions were justified to maintain the alliance with the United States. How then does the current DPJ behavior differ in substance from what the LDP did?

Mr. Edano was in the studio during the NTV presentation (that’s him in the screenshot insert), and he kept insisting that Japan only committed to discussions leading to negotiations.

It should also be remembered that Mr. Edano was the Chief Cabinet Secretary in the Kan Cabinet and began lying to the Japanese public with his boss from the first day of the Tohoku disaster. He’s had plenty of practice before this.

During the recent Question Time in the Diet, upper house MP Sato Yukari made the point that the government’s own research shows the ASEAN + 6 free trade scheme would be more economically advantageous to Japan than the TPP.

In a similar vein, the Seetell website has translated into English excerpts from a Japanese-language article by Waseda Prof. Noguchi Yukio that appeared in the Nikkei Veritas (which requires paid registration to view). Prof. Noguchi is known for writing a book arguing that the reliance on/dominance by Japan’s bureaucracy in policy matters and affairs of state did not start during the LDP era, but dates back to 1940. He’s also pessimistic about a resolution of the government’s fiscal problems without a great deal of economic unpleasantness. Here are the excerpts from his article:

The Cabinet Office released estimates on Oct. 25 of the economic boost from the TPP. Real gross domestic product would go up 0.54%, or by 2.7 trillion yen, according to the projections. But that is the expected increase over the next decade or so, which means a yearly average of just 0.05%, or 269.5 billion yen. In other words, the TPP’s potential for growing Japan’s exports and expanding its economy is so small as to be negligible.

He also brings the Chinese into the discussions:

Japan’s biggest export market is China, which makes that nation’s response to the TPP an important element in Japan’s economic fate. Some say that if Japan joins the TPP, China will seek membership as well. That is not going to happen for two reasons.

First, China itself can expect little export growth from joining the TPP, putting it in the same boat as Japan. In China’s case, however, there is also the fact that its U.S.-bound exports will continue to grow even if it does not enter the trade pact.

The second reason China would not join is the investor-state dispute settlement provision. This is an agreement that lets companies sue member countries for damages caused as a result of national polices.

To understand why the ISD clause is such a big problem for China, just think about Beijing’s clash with Google Inc. If China loses in a dispute involving its censorship, for example, it would have a devastating impact that could threaten the very foundation of the country.

So, should Japan take part in the TPP while aiming for an FTA with China? That would be impossible. The TPP is an element of the U.S. strategy in Asia, which seeks to hold back China’s expansion. America is unlikely to tolerate Japan signing both the TPP and an FTA with China.

There is no way to know for sure how China would respond to the TPP. But Beijing clearly is not going to welcome a policy that seeks to exclude the country.

China could very well react by moving toward economic partnerships that do not include Japan, such as pursuing an FTA with the European Union. Because the EU maintains higher import tariffs than the U.S., China has an incentive to sign such an agreement. For the EU, particularly Germany, China is a major market, making a China-EU FTA perfectly plausible. Should that happen, there is a danger that Germany could sweep the Chinese market, bringing ruin to Japanese manufacturing.

Further, he recognizes some real benefits:

Of course, some aspects of the TPP would have desirable effects for Japan. Lower tariffs on farm imports would be good news for Japanese consumers. Domestic food prices are strikingly high from a global perspective. And among industrialized countries, Japanese have a considerably high Engel’s coefficient, meaning that they spend a high proportion of their income on food. Lowering food prices is an urgent matter. That being said, Japan can lower agricultural tariffs on its own, and there is no need to sign on to the TPP for that purpose.

Note that last sentence. There has been a shift in the arguments made by some pro-TPP supporters away from the economic benefits and toward the benefits accruing from a larger economic alliance with the United States. See, for example, the quote from Prof. Ikeda Nobuo in the last Ichigen Koji, which you can access from the top of this post.

When I first arrived in Japan, politics were still dominated by the LDP (and Tanaka Kakuei, for that matter). The DPJ, the current ruling party, did not exist. The primary opposition was the Socialist Party, which survives today as the greatly diminished Social Democrats.

Those Japanese interested in reform and uninterested in the Socialists (which had close ties with North Korea and kind words for Karl Marx in the party charter) viewed the United States government as Japan’s most effective opposition party. That didn’t mean they liked it; that was just how things were.

Is not the argument in favor of the TPP as a means to form an economic alliance with the U.S. in the Pacific, with the unstated but obvious premise of countering the rise of China, a remodeling of the old Cold War alliance model? Also, the argument that the TPP is necessary for domestic reform seems to be an updating of the logic of the Japanese reformers 30 years ago.

Prof. Noguchi and others argue that the Japanese can (or at least should) handle that on their own, and I agree. It’s time to slough off the old and ill-fitting garments handed down to the American stepchild.

Polls show that people in their 20s and 30s are those most opposed to Japan’s participation in the TPP scheme. Some say this is because they’re concerned about their employment prospects in a freer market, but I disagree. That age group never wore those hand-me-down garments to begin with. That too was an issue for an older generation.

It’s possible that China’s exports to the U.S. may not grow significantly in the future, in contradiction to Prof. Noguchi. There are studies suggesting that rising wages in China mean such regions as the American South (Alabama, specifically) will become competitive for manufacturing and allow companies to shift procurement there before the end of the decade.

So, which will happen by 2016: Japan officially joins the TPP, or this?

One Response to “Is the truth a lie?”

  1. toadold said

    “Hello,” he lied.”

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