Comment on “Abenomics and Japan's Trade Policy in a New Era”

• DOI: http://doi.org/10.1111/aepr.12207
• Author: Fukunari Kimura
• Date: 01 January 2018
• Published date: 01 January 2018

Comment on “Abenomics and Japan’s Trade

Policy in a New Era”

Fukunari KIMURA†

Keio University and Economic Research Institute for ASEAN and East Asia (ERIA)

JEL codes: F13, F15, F53

Accepted: 24 August 2017

Solis and Urata (2018) will surely become a must-see reference on Abenomics, the

Trans-Pacific Partnership Agreement (TPP), and current Japanese trade policy. In par-

ticular, their concise review of the negotiation process over the TPP as well as the con-

tent of the agreement is handy and useful. I share their understanding on most points.

It is important at this moment to assess the process of the TPP negotiations from the

viewpoint of the political economy and foresee international commercial policies in the

near future, possibly with the Trump trade doctrine.

The following is a list of discussion points that I felt a bit uneasy about or issues that

Solis and Urata may have wanted to emphasize more. The first is about the expected

effects of the TPP on the Japanese economy. It is true that the TPP was placed as one of

the possible tangible outcomes of the third arrow of Abenomics, which is microeco-

nomic reform. However, we must note that the link with domestic reform was consis-

tently weak from the beginning. Agriculture was probably an exception in which

substantial adjustments were expected to be unavoidable. Although at the end of negoti-

ations some protection was maintained for five major agricultural items, domestic

reforms, particularly relating to agricultural cooperatives, were initiated in parallel with

TPP negotiations. However, for sectors and policy modes other than agriculture, the

Japanese Government tried to minimize the domestic adjustments in order to save on

political costs and calm down the opposition to the TPP. Indeed, new laws to make the

necessary adjustments to TPP commitments would barely change the Japanese econ-

omy. Economic gains for Japan would certainly come as a kickback from the improve-

ments in the investment climate in developing Asia, but not from Japan’s own reforms.

Second, the negative campaign against the TPP appealed to people’s fears rather than

logic. The agricultural lobby provided outrageously generous financial support for the

campaign so that all sorts of possible, even though improbable,negative effects were listed

and advocated for not only agriculture, but also sectors such as medical serviceand insur-

ance service sectors. After the TPP text became available, people realized that most of the

†Correspondence: Fukunari Kimura, Faculty of Economics, Keio University and Economic

Research Institute for ASEAN and East Asia (ERIA), 2-15-45 Mita, Minato-ku, Tokyo 108-8345,

Japan. Email: fkimura@econ.keio.ac.jp

126 © 2018 Japan Center for Economic Research

doi: 10.1111/aepr.12207 Asian Economic Policy Review (2018) 13, 126–127