These changes promise a brighter economic future for Japan. But they will be painful to implement, imposing not just economic but social costs. For this reason, TPP entry is being resisted by many in the DPJ and by vested interests, particularly the agricultural lobby. But none of these opponents has laid out an alternative plan for securing Japan's hard-won economic prosperity in the face of an aging and declining population and intense global competition-competition that has only become stronger since Mexico and Canada were recently approved for TPP membership.
Noda has a narrow window over the next few months to earn a better place in history than most of his feckless predecessors by persuading his countrymen that TPP is the only realistic plan to force Japan's needed structural change. Assuming he survives the mutiny in his party and is able to push the consumption tax legislation through the Upper House by the end of the summer, Noda should turn back to the task of developing a plan for comprehensive agriculture reform, a de facto precondition for Japan's TPP entry. He should then tell the world-ideally by the time of the UN General Assembly meetings in late September-that he has made a clear decision to join TPP.
To persuade the existing TPP members-notably the United States-that Japan is ready, Noda will need to put a few confidence-building measures on the table. In addition to a credible agriculture plan, Washington wants to see a standstill on recent postal "reforms" that threaten to upset the competitive playing field for U.S. insurance companies; and some token concessions on further opening Japan's automobile market to counter the fierce opposition to Japan's entry from the U.S. auto industry.
Assuming Noda comes through and provides the necessary ammunition, the White House should seize the opportunity to make the case to Congress for Japanese TPP entry. To be sure, there are political risks in an election year to advocating more trade with Japan, and it may not be realistic to start the clock on the required 90-day congressional notification until immediately after the presidential election. But win or lose in November, President Obama has a chance to secure his legacy as the United States' first Asia-Pacific president by bringing the world's third-largest economy into TPP. Japanese entry will be a game-changer in both economic and strategic terms, by substantially increasing the economic heft of the group; by putting another champion of high-standard trade and investment rules on Washington's side of the negotiating table; and by making it more difficult for other Asian countries-ultimately including China-to resist joining TPP.
President Obama could be forgiven for struggling to remember the names of all four Japanese prime ministers who have served during his administration. Noda has a chance to be the first memorable one, if he continues to show the kind of resolve he has demonstrated over the past month on other key policy challenges. Noda-san, ganbare!
