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2011 Vol.3
The Trans-Pacific Partnership and the Future of Japan: From the Perspective of Japan’s Reconstruction

2011/07/01

Heated discussions are taking place on the relationship between the Great East Japan Earthquake and the Trans-Pacific Strategic Economic Partnership Agreement (also known as the Trans-Pacific Partnership, or TPP). In the Cabinet Council decision issued on May 17 entitled “Policy Guidelines for Japan’s Revival”, the government formally announced that it would postpone a decision on Japan’s participation in the TPP negotiations, which was initially planned for June, stating that the government would comprehensively consider the timing for the decision. As the Cabinet Council decision of the postponement implies, heated discussions are continuing after the earthquake disaster regarding the pros and cons of participating in the TPP negotiations.
It is important to examine whether Japan should participate in these negotiations from the perspective of comprehensive reconstruction of the country rather than reconstruction for farmers in eastern Japan, which many have been discussing. This paper examines the pros and cons of participating in the TPP from the perspective of Japan’s reconstruction as follows. Section 2 is based on the concept of autopoiesis as discussed by sociologist N. Luhmann and identifies the current state of the world economy as a premise for further analysis. Since 2000, the world economy has been becoming an autopoietic system due to rapid technological innovation and globalization, and Japan’s economy, as well as the country itself, is integrated into the system as a constituent part. As the world economy functions as an autopoietic system, protectionist arguments, e. g. by E. Todd (author of After the Empire) and T. Nakano (a well-known opponent of the TPP), could be mere vents of frustration about the system.
Section 3 examines vitalization of the Japanese economy, which is a main topic of discussions on the pros and cons of participating in the TPP. The deflation that led to the “lost two decades” is not attributed to a simple lack of demand (an explanation supported by opponents of the TPP), but to structural changes observed in both the demand and supply sides. As long as the deflation is caused by structural changes, the Japanese economy cannot be vitalized with the creation of demand through public investment, contrary to what opponents of the TPP argue.
Lastly, from the perspective of Japan’s reconstruction, Section 4 summarizes reasons why the country should participate in the TPP negotiations. Today, environmental regulations have begun to increase the market value of certain technologies. At the same time, it is also expected that various nonenvironmental domestic and international regulations will be utilized to create market value and gain profits. The U.S. is trying to set up regulations in the TPP as factors that create new value. Based on structural changes in the world economy and the strategic response of the U.S. to these changes, it is clear that Japan should participate in the TPP and become involved in competition associated with regulations, which are factors of value creation in the 21st century.

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