Tokyo. China’s drive to create a Beijing-led Asian development bank seen as a threat to U.S. and Japanese regional clout is adding to a sense of urgency among Japanese officials keen to get a 12-nation pan-Pacific trade pact off the ground.

Japan hopes the Trans-Pacific Partnership (TPP) will help anchor ally Washington in Asia and create a rule-based regime that would eventually draw in China. Beijing, for its part, is seeking to reshape Asia’s economic architecture with institutions such as the new Asia Infrastructure Investment Bank (AIIB).

“The strategic value is what we see in TPP – to be part of the team,” said a Japanese government source familiar with the talks, noting Prime Minister Shinzo Abe took a political risk by putting the sensitive farm sector on the table to join.

“If AIIB goes ahead and TPP fails …. perception-wise it will hurt in the leadership contest for the Asia-Pacific,” the source told Reuters. “It will be a missed opportunity and countries that went along with the United States will pay the bill.”

The TPP, central to U.S. President Barack Obama’s strategic “rebalance” to Asia, took a step forward on Friday when the U.S. Senate approved a Trade Promotion Authority (TPA) bill to speed up Washington’s approval of trade deals.

But opposition is deeper in the House of Representatives, which won’t take up the matter until after Congress resumes on June 1. America’s TPP partners want to see the TPA approved before concluding a deal.

A push to get the AIIB – which Washington and Tokyo are shunning for now – operational by year-end is upping the ante for the TPP, which would create rules not only for market access but a range of issues including intellectual property.

The AIIB, with 57 founding members, is seen as a threat to the U.S.-dominated World Bank and Japan-led Asian Development Bank.

“If TPP negotiations are delayed because the outlook for the TPA is uncertain and the moves toward a China-led economic zone centred on AIIB move ahead, this will inevitably have an impact on our strategy to first ensure fair rules,” lawmaker Masahiko Shibayama, a member of a ruling Liberal Democratic Party panel discussing Japan’s stance toward the AIIB, told Reuters.

TPP would cut Japan’s agriculture output by 3 trillion yen ($24.6 billion) while the economy would get a boost of under one percent, the government estimates, although Prime Minister Shinzo Abe has touted it as an engine of reforms needed to drive growth.

Policy makers, though, are betting strategic benefits would outweigh any economic downside by helping anchor the United States to the region, where worries persist Washington will retrench. Abe’s pledge to play a bigger military role in the alliance is one way to glue America to Japan’s side.

TPP is another, given expected gains for U.S. business.

If TPP fails, “we would lose one very important symbol of anchoring the United States in the region”, said Narushige Michishita, professor at the National Graduate Institute for Policy Studies and a former security official.

Reuters

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Tokyo. Japan’s cabinet approved on Thursday bills to implement a drastic shift in security policy allowing the military to fight abroad for the first time since World War II, although the public is divided and wary over the changes.

The planned changes, reflected in new US-Japan defense guidelines unveiled last month, set the stage for Japan to play a bigger role in the bilateral alliance as Tokyo and Washington face challenges such as China’s growing military assertiveness.

Prime Minister Shinzo Abe’s cabinet adopted a resolution last July reinterpreting the pacifist constitution to drop a self-imposed ban on exercising the right of collective self-defense, or militarily aiding a friendly country under attack.

China called on Tokyo to learn the lessons of history, while South Korea urged Japan to stick to the constitution’s spirit.

Tokyo’s ties with both are strained by feuds over the wartime past, disputed territory and regional rivalry, although Sino-Japanese relations have improved somewhat recently.

“We hope that Japan can earnestly learn the lessons of history, uphold the path of peaceful development … and play a constructive role in this Asian region,” Chinese Foreign Ministry spokeswoman Hua Chunying told reporters in Beijing.

Debate in parliament will likely be fiery, but the bills are expected to pass given the ruling bloc’s majority in parliament.

Opinion polls show that Japanese voters are both confused by and divided over the changes, which even supporters say have stretched the constitution’s pacifist Article 9 to the limit.

Abe has made clear he wants to formally revise Article 9, a more politically difficult goal to achieve.

A survey by public broadcaster NHK aired this week showed that 49 percent didn’t understand the proposed changes very well or at all. Fifty percent did not approve of Japan’s expanded military role in the new US-Japan defense guidelines.

“The Japanese people should be proud of Article 9,” said labor union official Yuri Nagao, 59, one of hundreds of women marching through an upscale Tokyo shopping area to protest. “We cannot accept the ‘war legislation.’ ”

The new legislation would allow Japan to exercise the minimum force necessary if a country with close ties to Tokyo was attacked and certain conditions were met.

It would also allow Japan’s military to provide logistics support to foreign forces operating in line with the UN Charter, without a special law for each mission.

Another change would drop geographical limits on Japanese defense support for the US military and other foreign armed forces, which had previously been envisioned as restricted to situations involving contingencies on the Korean peninsula.

Reuters

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