Shinzo Abe’s success in signing a free-trade deal with Australia proves Japan’s prime minister can bend the once-powerful farm sector to his will, experts say, offering leverage against US claims of intransigence in a wider pan-Pacific deal.
Tokyo looks set to make the most of its triumph, which came just weeks before US President Barack Obama arrives in Japan on a state visit that had at one point been expected to crown the Trans-Pacific Partnership (TPP).
The Japan-Australia deal was signed Monday after Abe’s summit with Prime Minister Tony Abbott, and followed seven years of sometimes torturous negotiations.
The agreement will see Australia drop its five per cent duty on small and mid-sized Japanese cars — something of a symbolic move for a country that is soon to lose the last of its auto plants.
In exchange, Canberra has partially prised open Japan’s tightly-controlled agricultural markets, winning an up-to-50 per cent cut in steep tariffs on imported Australian beef.
The deal “puts pressure on the United States over deadlocked talks with Japan” that form a key plank of the TPP project, said Takaaki Asano, research fellow at the Tokyo Foundation.
At issue is what Washington and many of the other parties to the talks — which also involve Chile, Mexico, Canada and several Asian countries — see as Japan’s unwillingness to open its lucrative agricultural market.
Putative suitors have long complained that sky-high tariffs — on rice it is nearly 800 per cent — and non-tariff barriers, like overly-strict safety requirements, are naked protectionism pandering to a powerful farming sector.
Japan’s farmers — largely elderly, conservative and with smallholdings that would barely be worth tilling in many countries — have traditionally been a formidable political force.
Through large and well-organised cooperatives they have backstopped Abe’s Liberal Democratic Party, helping it to maintain a virtual stranglehold on Japanese politics since the mid-1950s.
The narrative these cooperatives spin intimately links Japanese national identity with the shape of the countryside, idealising the small rice paddies that make up the rural landscape and warning this essence of Japanese-ness is under threat from an onslaught of poor-quality, unsafe farm imports.
Abe’s triumph in the Australian deal has been to prove that he is prepared to take on this entrenched ideology and offer up his beef farmers, pitting them against the vast ranches of the Outback, whose economies of scale dwarf their Japanese competitors.
The mass circulation Yomiuri Shimbun reported Abe had told his ministers that he definitely wanted a trade deal struck during Abbott’s visit, regardless of protests from the farming lobby.
But the trick, says Waseda University professor Shujiro Urata, is that Tokyo has not given away very much.
“The compromise Japan made this time is not huge,” he told AFP. Commentators have noted that the full roll-back of beef tariffs to the headline level will take almost two decades.
But nevertheless, it was a compromise, and it undermines US complaints that Tokyo is not prepared to budge.
“The ball is now in Washington’s court. They must be thinking hard now,” said Urata.
As the ink on Abe’s signature dried, US Trade Representative Michael Froman arrived in Japan for three days of TPP horse-trading with his Japanese counterpart Akira Amari.
Asked by reporters about the impact of the Tokyo-Canberra deal on the TPP talks, Froman told reporters: “I don’t think it has much effect in one way or the other. We are looking for a level of ambition in the TPP that is significantly higher than that.”
The pact, which if realised could cover 40 per cent of global GDP, is a key plank in Obama’s foreign policy, an effort to anchor the US firmly to a region that is increasingly feeling the pull of Beijing’s mighty economy.
Negotiators missed the end-of-2013 deadline they had set themselves — a target that always looked ambitious but became much more so when Tokyo came onboard during the year, and no new end-date has been set.
However, Obama’s Asia trip is expected to provide some momentum and may focus minds on both sides of the Pacific, where each government would like to be able to claim some sort of victory from the visit.
Most commentators agree a settlement is not likely anytime soon given remaining gaps over trade barriers and US midterm elections later this year, which will make US political concessions more difficult.
But that has not dampened the spring in the step of Japanese leaders after their triumph with Canberra.
“In negotiations both sides need to show flexibility. Like the Japan-Australia (trade deal), it’s important that we share feelings that it’s a win-win situation” in the TPP talks, Abe told a TV news program on Wednesday.
His negotiator, Amari, acknowledged a lot of hard graft remained, but added: “I expect the (TPP) talks will accelerate (after the deal with Australia)”.