Commentary / Japan

Abe, post-election, faces a new Trump problem

The prime minister's economic bet on U.S. president is backfiring

by William Pesek

Turns out, playing the Japanese for fools isn’t as easy as Donald Trump thought.

Granted, Prime Minister Shinzo Abe’s headlong sprint to New York’s Trump Plaza wasn’t the prime minister’s finest moment. It smacked more of desperation and subservience than diplomatic savvy. It backfired as the U.S. president tore up the Trans-Pacific Partnership (TPP) and bashed the yen and Toyota via Twitter anyway.

Abe’s team is being wise not to let the dealer-maker-in-chief roll Tokyo. That’s precisely what would happen if Japan agreed to a bilateral trade deal with a transactional leader with long track records of puffery, double-dealing and alleged deceit. But the question following Sunday’s resounding victory is whether it will increase Abe’s willingness to put Japan first where his Trump bromance is concerned.

Trump is sure to test that bond in unpredictable ways ahead of, and during, next month’s Tokyo visit. He’s certain to put Abe on the spot, and publicly, to back his high-school-league tit-for-tat with North Korean leader Kim Jong Un. Trump will try to manipulate Abe into a Japan-U.S. trade deal, perhaps even using American military defense of Tokyo as a bargaining chip.

With his legislative prospects at home in tatters and scant few foreign allies to work with, Trump is sure to see Abe as a chance for a big win — perhaps an easy one. If Trump can succeed where U.S. Vice President Mike Pence failed with Finance Minister Taro Aso, he can go home gloating.

To the Democrats and moderate Republicans in Washington missing the TPP, Trump could say: “See, I went to Japan and got us a great, great deal that’s even better than Barack Obama’s! It will create millions and millions of jobs and make America great again!” Yes, I tossed in a bit of Trumpian hyperbole there, but this wouldn’t be far from how he’d hype an Abe trade deal.

Abe must be cautious in discussions on North Korean leader Kim Jong Un’s missiles, too. With his new election mandate and “super-majority,” Abe will surely feel more comfortable hitting up Trump for greater access to weapon systems to deal with Pyongyang’s arsenal. Trump, though, will amp up the “fire and fury” rhetoric toward a leader he calls “little rocket man.” It will require deft facial-expression diplomacy to avoid seeming to side with Trump’s verbal bromides without offending him.

But “the economic relationship will remain more problematic,” says Scott Seaman of Eurasia Group. “Most notably, Abe is unlikely to commit to negotiating a bilateral trade pact anytime soon even if Trump presses him. Abe’s government believes that agreeing to bilateral deal would undermine its efforts to persuade the U.S. to return to the TPP if not during Trump’s tenure, then perhaps under a new president.”

That’s a difficult balancing act for Abe — effectively running out the clock. Abe’s resounding election win means he’ll probably be in office months after Trump vacates the White House in 2021, perhaps sooner the way his presidency is going. It will lead to some testy exchanges as Trump argues “let’s make a deal” and Abe says “maybe later.”

The odds of Japan getting advantageous terms in direct talks with a president who’s torn up myriad deals since January (the North American Free-Trade Agreement could be next) are tiny. Trump, it’s safe to assume, would use America’s security umbrella to blackmail Tokyo into major concessions.

Trump may not be playing Abe for a fool, but the prime minister also needs to accept his economic bet on Trump is backfiring. Abe can rectify that call by using the fresh mandate voters handed him Sunday to get serious about retooling Japan’s uncompetitive and aging economy.

Abenomics is having a good few months as a combination of strong global growth, Bank of Japan liquidity and increased tourism boost business confidence. But these are ephemeral phenomena. Japan may be growing 2.5 percent, unemployment at 23-year lows and the Nikkei soaring to 20-year highs, but wages remain stagnant. You’d think workers would do better as Japan enjoys its longest run of growth since 2006. You’d expect the Japanese Trade Union Confederation (Rengo) to be demanding that executives share the wealth. But no, the biggest labor group stayed with the same timid 2 percent ask for a third straight year (which it won’t get anyway).

Trump only understands strength. Abe could win greater negotiating parity by making Abenomics a huge success — by making the Japanese, in Trump-speak, tired of winning. Nothing would catch Trump’s attention — and esteem — quicker than global headlines heralding Japan’s economy the best anywhere. That, in a New York minute, would turn Abe’s Japan into an asset in Trumpworld rather than a subordinate. It also would strengthen Abe’s negotiating hand with a Trump White House that still expects to run circles around Tokyo.

Tokyo-based journalist William Pesek is the author of “Japanization: What the World Can Learn from Japan’s Lost Decades.”