Delaying the decision to take part in the Trans-Pacific Partnership negotiations by a day may have bought a little time, but experts said Friday there is no going back for Prime Minister Yoshihiko Noda now that he has announced Japan will participate in the free-trade talks.
Already there are signs of trouble within his ruling Democratic Party of Japan.
“DPJ members will remain divided” over Noda’s decision to join the TPP talks, political analyst Minoru Morita told The Japan Times.
“It’s likely that DPJ lawmakers who are opposed to the TPP will continue holding regular meetings to see how much influence they can exert” on party executives and the government, he said.
The TPP has created a deep divide in the DPJ, with lawmakers forming rival camps that either support or oppose the free-trade pact. The fissure was evident late Wednesday night, when tempers flared at a party meeting of the DPJ’s TPP panel that was intended to reach a unified conclusion on the issue.
Since the meeting broke up without a satisfactory conclusion and the party remained divided, DPJ lawmakers left it up to Noda to make a decision.
While TPP advocates say the free-trade framework will boost the economy, those opposed hinted they might even leave the party if Noda ignored their opinions.
A group of anti-TPP lawmakers headed by former farm minister Masahiko Yamada even submitted a petition to the government with the signatures of more than 200 of the DPJ’s Diet members.
As the pressure mounted, Noda postponed a Thursday news conference at which he was expected to announce his position on the TPP, to buy another day to consider the issue.
While noting that a mass departure of lawmakers from the DPJ is unlikely, analyst Morita said it will still be damaging to Noda’s administration even if only a few members bold, undermining its ability to pass legislation in the divided Diet.
“There is a possibility that former farm minister Yamada will leave the party at the end of the year along with five to 10 of his allies, but most opponents of the TPP will stay because they realize their best chance of winning a seat is if they remain in the DPJ,” he said.
Convincing his DPJ colleagues to stay in the fold is just the start for Noda, as his decision to join the negotiations has set him on a collision course with many of the opposition parties, who vehemently oppose the regional free-trade pact.
The Social Democratic Party and the Japanese Communist Party, as well as a number of Liberal Democratic Party lawmakers, have already declared their opposition to the TPP.
With only the tiny Your Party in favor of joining the talks, it is possible that every bill related to the issue will be rejected at the Diet regardless of how Japan negotiates with the nine other countries involved in the negotiations.
An even bigger threat to the prime minister could come from LDP lawmakers who have warned they may submit a no-confidence vote if Noda steamrolls Japan into the TPP talks. If the ruling DPJ, which holds a majority in the powerful Lower House, remains united, Noda’s position would not be in danger.
But as many DPJ members have openly and vehemently voiced their opposition to the TPP, experts say Noda can’t afford to take anything for granted.
Analyst Morita agreed, saying he expects the LDP and New Komeito, which has already submitted a nonbonding resolution against the TPP to the Lower House Committee on Rules and Administration, to start putting pressure on Noda to dissolve the House of Representative and call a snap election.
“They will cooperate on bills related to the third extra budget (which will finance Tohoku’s reconstruction), but after their passage they will push Noda to call a snap vote in the current Diet session,” he said.
Recent opinion polls meanwhile show that the public is also split over the elimination of all trade tariffs, which would result from Japan becoming a member of the TPP.
Agricultural cooperatives have already turned in a petition to the government with 11.6 million signatures, warning that the TPP would be a disaster for domestic farming. Farmers argue that reducing the nation’s food self-sufficiency rate, which is already low, would undermine Japan’s strength in the event of diplomatic disputes.
To back the claim, the agriculture ministry last year calculated that Japan’s food self-sufficiency rate — which dropped to 39 percent in fiscal 2010 — would plummet to 13 percent under the TPP.
In terms of the TPP’s effect on employment, the projections vary widely. Keidanren, the country’s top business lobby, claims removing tariffs would help stabilize employment, but the farm ministry forecasts that joining the free-trade initiative would eliminate 3.4 million jobs.
Even though Noda has pledged that the government will provide substantial aid to domestic farmers to help keep them in business, the agricultural industry is still deeply skeptical.
On Tuesday, more than 6,000 people from the farm sector rallied in Tokyo and demanded the government back away from the free-trade deal.
Keidanren, which has been at the forefront of the campaign to join the TPP, welcomed Noda’s decision Friday. But some analysts say it is too early for them to start patting themselves on the back.
According to an analysis Keidanren released in April, trade liberalization is a “minimum requirement for Japanese companies when conducting business through global supply chains.” Failure to join the pact would be a huge blow to the economy as Japan is both a “nation built on trade and investment, and one built on technology,” the analysis warned.
The Ministry of Economy, Trade and Industry forecast last year that if Japan remains outside the TPP, it would lose international market share, gross domestic product would have contracted 1.53 percent by 2020 and 812,000 people would lose their jobs as a direct result.
Tadahiko Abe, an executive research fellow at Fujitsu Research Institute, said joining the TPP talks is understandable given the shrinking domestic market.
“But joining the TPP on its own won’t make that much of an impact at this point. The yen is so strong now that it will strip exporters of any advantage even if all tariffs are lifted on their products,” Abe said.
Although Noda describes the TPP entry as the ultimate answer for the business sector, the government should view the negotiations as only the first step in rejuvenating the economy, Abe added.
And to complicate matters, the U.S. will probably be ambivalent about Japan joining the negotiations, even if domestic opposition eases.
Earlier in the week, lawmakers in Congress submitted a letter to U.S. Trade Representative Ron Kirk requesting that Washington be cautious during negotiations with Tokyo.
“The paramount considerations . . . must be whether Japan is willing and able to meet the high standard of commitments inherent in U.S. free-trade agreements, and whether inclusion would truly open up (Japan’s traditionally) closed market,” the lawmakers cautioned.
Fujitsu Research Institute’s Abe said the government should be ready to defend the interests of and fight for the benefit of Japanese industries and farmers alike.