Japanese Agriculture and Trans-Pacific Partnership (TPP) Negotiations under the Abe Administration: A Two-Level Game Analysis

Abstract

During his policy speech at the 76th Extraordinary Session of the Diet on 1 October 2010, Japanese Prime Minister Naoto Kan, for the first time, expressed his intention to participate in the Trans-Pacific Partnership (TPP) negotiations. In the aftermath of the 2011 Great East Japan Earthquake, however, the discussion on the TPP participation was put on the back burner until the end of his tenure. Subsequently, Prime Minister Yoshihiko Noda, the Kans successor, attempted to rekindle TPP momentum, pledging to U.S. President Barack Obama at the summit meeting held on 22 September 2011 that Japan would decide on the TPP engagement sooner or later. Nevertheless, in the face of his own partys tenacious opposition, his plans to make an official announcement on Japans participation in TPP negotiations were baffled in a row, and eventually the governments decision on the TPP was indefinitely put off as of August 2012. In contrast, no sooner had Prime Minister Shinzo Abe taken back the reins of power from the Democratic Party of Japan (DPJ) in December 2012 than he proclaimed that Japan would join TPP talks on 15 March 2013. In spite of the often-stalled domestic and international bargaining processes, the Abe administration finally came to an agreement two and a half years later, which stands in sharp contrast with fruitless endeavors of the two preceding DPJ governments. At this point, the following critical question will arise from our mind: How did Abe successfully initiate Japan's involvement in TPP negotiations only three months after his inauguration and conclude an agreement two and a half years thereafter in spite of Japans fragmented decision-making authority and sensitivity to pressure from domestic interest groups, particularly from the agricultural policy triangle? To answer this question, this paper sheds light on Japan's agricultural sector, which raised much controversy in the course of TPP negotiations, and focuses on bilateral relations between Japan and the U.S. Employing Robert D. Putnam's two-level game model and process-tracing methodology, in addition, this paper delves into changes and distinctions of preferences and coalitions of Japanese constituents, Japanese political institutions, and Abe's strategies as a chief negotiator with regard to TPP negotiations and Japanese agriculture. Based on Putnam's three factors affecting the win-set size or the size of the negotiating room, the following noteworthy findings are revealed. First, preferences for the TPP are divided into two domestic groups, that is, the free trade group and the status quo group, or the traditional agricultural policy triangle consisting of the Ministry of Agriculture, Forestry and Fisheries (MAFF), nōrin zoku (農林族), agricultural and forestry policy tribe in the Liberal Democratic Party (LDP), and the Japan Agricultural Cooperatives (JA). On the one hand, most constituents in the free trade group have a clear-cut preference or position on TPP negotiations. The Ministry of Economy, Trade, and Industry (METI), the Ministry of Foreign Affairs (MOFA), and the business community including Keidanren (経団連) and Keizai Doyukai (経済同友会) strongly backed Japans TPP participation all together, arguing that Japanese agriculture should open its market and sharpen its competitiveness. As the biggest opposition party, however, DPJ showed an ambiguous attitude due to its track record in pursuing economic partnership agreements (EPAs) in general and Japans TPP participation during the Kan and Noda administrations. Since Abe took office, DPJ tried to put the brakes on his TPP policy in terms of information disclosure and protection of the so-called five key sensitive agricultural products (重要5品目) in TPP talks but failed to do them in the aftermath of consecutive crushing defeats in elections. On the other hand, preferences of the agricultural policy triangle have been mixed, equivocal, and even shifted under the Abe administration. In spite of its track record in a stalwart support for agricultural protectionism, MAFF not only softened its attitude towards the TPP and even joined the government-led agricultural reforms, facilitated by both its own motive to redeem its tainted reputation as a major stumbling block to agricultural free trade and weakened links with JA in terms of electoral supports and agricultural subsidy system. As for LDP, its party members had been greatly split over the TPP issue until the participation in TPP talks and the conclusion of a final agreement because of its traditional strong voting base in rural areas. As Abe persuaded LDPs wavering senior members in person and his administration found public confidence in consecutive elections, the ruling party, in particular, anti-TPP party members, gradually toned down its adamant opposition and finally gave the de facto green light to the Abe administrations TPP policy through its intra-party decision-making apparatus on the TPP issue, i.e., the Research Commission on Regional Diplomatic and Economic Partnership (外交・経済連携調査会) and its subsidiary TPP Committee. Lastly, the most vehement opposition to the TPP came from JA, or the farm group through using its mouthpiece, mobilizing farmers and citizens for anti-TPP demonstrations, and lobbying activities, but it lost driving forces for its anti-TPP movement, directly hit by a bomb of "Abe-led JA reform". As the Abe administrations agricultural reform bill was enacted in April 2016, the agricultural interest group is scheduled to lose its auditing and guidance rights, or JAs main source of power, since September 2019. Taken altogether, declining leverage and further erosion of the agricultural policy triangle can be observed. When it comes to Japanese political institutions with related to the TPP, the executive-or prime minister-led policy-making structure is further strengthened during the Abe administration. Under Abe's leadership, major domestic fora for the TPP were formulated inside the government and relevant agenda were incorporated into the executive structure. For example, the Main Ministers Council for TPP Negotiations (MMC) and the TPP Government Headquarters, which were newly established in the Cabinet, relatively weakened and constrained MAFF Ministers influence while strengthening the authority of the Minister of Economic Revitalization and the Chief Negotiator. In addition, the Industrial Competitiveness Council (ICC) and the Council for Regulatory Reforms (CRR) significantly undermined the source of power of JA. For ICC's part, members of Keidanren and Keizai Doyukai, who are staunch supporters of the TPP participation in their interests, had opportunities to voice opinions of the business community and assisted in promoting Abe-led agricultural administration reforms. Also, the direction of agricultural reform policies suggested in ICCs meeting leaned against JA, which has a large number of small-scale part-time farmers as members and its vested interests in maintaining high domestic prices for agricultural products, conducting anti-competitive business practices, and hindering improvements in agricultural productivity. Once ICC attempted to indirectly debilitate JAs vested interests, CRR directly challenged the existence of JA with its drastic proposal. Chairman Yasufumi Kanemaru released a far-reaching report titled An Opinion on Agricultural Reformson 14 May 2014, proposing the abolition of the Central Union of Agricultural Cooperatives (JA-Zenchu). Although the subsequent revised proposal softened its tone on the JA reform due to pressure from LDP and JA, it provided a framework for the JA reform bill which was approved in August 2015. Last but not least, Abe, as the chief negotiator, first sought an understanding from the U.S. about the need of certain exceptions in TPP negotiations. After fulfilling an important precondition for Japans involvement in the TPP at the international level, Abe took prompt actions to win over wavering members in the Diet, especially co-opting marginal opponents in his party. Also, he came up with side-payments targeted to domestic agricultural producers, especially large-scale full-time farmers in anticipation of the conclusion of the TPP agreement. Through the Headquarters on Creating Dynamism through Agriculture, Forestry and Fishery Industries and Local Communities, his administration devised an organization for the mediation of farmland management and created a new system of direct payment in exchange for the complete abolition of the rice production adjustment. Abe's stable political standing at home and his party's major electoral victories also helped enlarge his win-set size and thereby facilitate the conclusion of the TPP agreement. What is noticeable is that to win more votes in the elections and thereafter pursue his policies without a significant backlash, Abe and his party implemented strategies of understatement, equivocal rhetoric, and issue linkage concerning the TPP issue on the campaign trail. To sum up, under the Abe administration, preferences and coalitions of domestic constituents, political institutions, and negotiating strategies including side-payments and generic good will combined contributed to Japans joining in TPP talks and finalization of the agreement. What is the most important here is that one common key component is discovered in all of these three aspects, that is, Abes strong leadership. First, Abe managed to change the landscape of preferences and coalitions of Japanese constituents in favor of his TPP policy, making his like-minded people hold key posts in his party, Cabinet, and main ministries and greatly diminishing JAs power through pushing his signature policy, the so-called historical major agricultural reform. Second, he incorporated all policy-making and discussions with reference to TPP negotiations and agricultural reforms into the executive-led structure. All TPP- and agricultural reform-related political institutions such as MMC, ICC, CRR are closely connected, pivoting on kantei (官邸), the prime minister's office. In this Abe-centered decision-making structure, MAFF Ministers veto power were relatively constrained and weakened than before. Lastly, Abe also exerted his strong leadership when implementing his strategies including side-payments and generic good will. As Sakuyama (2015) points out, Abe succeeded in suppressing resistance from nōrin zoku in his party, leading his party to make landslide electoral victories over DPJ and thereby improve LDPs party cohesion. In this regard, Abes modus operandi of TPP negotiations is analogous to a hub and spoke structure. Abe or kantei is located at the hub of the TPP-related policy-making network. And spokes from or to kantei are connected with shōkō zoku (商工族), commercial and industrial policy tribe and nōrin zoku in Abes ruling party and METI, MOFA, and MAFF in his administration. According to this research, shōkō zoku, METI, and MOFA are strong supporters of Japans TPP participation, closely working on promoting the TPP with kantei under the Abe administration. On the other hand, nōrin zoku, MAFF, and JA consist of the traditional agricultural triangle, but its clientelistic relationships have been sapped under the Abe administration. Even though Abe or kantei is not directly linked with JA in this network, he took advantage of MAFF and nōrin zoku as an intermediate point or a pathway to put pressure on the farm group to consent to Japans TPP participation and agricultural reforms. As of December 2016, both houses in Japan ratified the TPP agreement. However, the prospect of the TPP agreement itself remains uncertain and precarious since U.S. President-elect Trump announced on 22 November that he would withdraw from the TPP trade deal on 20 January 2017, his first day in office, regarding it as a potential disaster for our country. Against this backdrop, as the second-largest signatory following the U.S., Japan or Abes leadership, will hold a key to the survival of the TPP in the nearer future. In particular, Abes longer stint as the prime minister is expected for Japan to maintain and add momentum on pursuing agricultural reforms and EPAs including the TPP. As far as Abe holds an iron grip on power beyond September 2018, his modus operandi analyzed in this research will be still applicable in the future even if the TPP ends up in fading into history.