Japans Participation in the Trans-Pacific Partnership (TPP) A Political Economy Explanation, Comparative Analysis with Japan-Korea FTA

Abstract

Japan successfully entered the Trans-Pacific Partnership (TPP) negotiation and also ratified it. This is surprising because Japans selection of Free Trade Agreements (FTA) has been focused on those countries with small agricultural sector. Japan has been less active in doing FTAs with countries that needed Japan to open up its agricultural sectors. Korea-Japan FTA (KJFTA) highlights this trend.

The TPP encompasses a variety of countries of different development levels and includes those with which Japan imports large quantities of agricultural products. Ratifying the TPP means Japan needs to open up its agricultural markets to the extent it has never done. This brings to the question of how Japan was able to successfully negotiate with other countries and also able to construct a domestic political environment that allowed for the ratification, when in the case of KJFTA, it could not.

This paper focuses on the changes in the executive leadership as well as the wax and wane of political influence of the agricultural sector. The analysis draws on the framework provided by Mireya Solis on the two dilemmas faced by any trading nations, and also Robert Putnams Two-Level Game. By comparing the two factors between TPP and KJFTA, this paper argues the following points: 1) In the case of the TPP, Prime Minister Shinzo Abe established a top-down executive leadership, which allowed for Japan to hold wider win-set in the international negotiation. On the other hand, in the case of KJFTA, without the presence of one ministry designated for trade negotiation, it created confusion from its counterpart and eroded Japans credibility, thereby reducing the win-set. 2) Given the fortunate political circumstances (landslide victory in 2012, reducing number of farmers, growing pro-US sentiment etc) at the time of Abe coming back to power, he could carry out reform of the Japan Agricultural Cooperatives (JA) to further reduce its clout. Agricultural lobby was still very strong when KJFTA was being negotiated. For political and economic reasons, it was unviable for Korea to carry on with the negotiation if it did not gain concessions from Japanese agricultural sector. This was a type of concession that Koizumi could not give.