New Japanese Ag Minister Hayashi Brings New Life to the TPP Negotiations

March 4, 2015International Tradeby East Asia Forum

Political aspirations could dictate Hayashi's TPP negotiations role.

Japan’s new Minister of Agriculture, Forestry and Fisheries (MAFF) Yoshimasa Hayashi, who previously served in the position in 2012–14, was a logical choice to take over from his disgraced predecessor Koya Nishikawa. He arrived at the Prime Minister’s Office (Kantei) only five minutes after Nishikawa left, and was apparently selected because he was ‘the only one that could immediately do the job’.

Nishikawa was finally felled by revelations that the party branch in his electorate, which he heads, received 4 million yen (about US$33,650) in political funding from a timber processing company, for which he had previously served as an ‘advisor’, and from the Sugar Refining Industry Hall, a front company for the Sugar Refining Industry Association.

Together, the two companies had benefited from a total of 2 billion yen (about US$16.8 million) in subsidies from his ministry. Even more significant was the association’s opposition to the Trans-Pacific Partnership (TPP) on the grounds that ‘cheap sugar imports lead to the destruction of the domestic production of sweetening resources and unemployment in the industry’. Nishikawa had graduated from being chairman of the LDP’s TPP Affairs Committee to MAFF Minister and was, therefore, a key figure in determining the outcome of TPP negotiations for the government.

Suspicions that ministers are involved in this kind of money politics reflect badly on Abe’s choice of cabinet members. But Abe has got form in this regard when selecting members in both his current and former administrations.

Nishikawa’s chief advantage as MAFF minister was that he was a Liberal Democratic Party (LDP) agricultural tribe Diet member (norin zoku) who was not afraid of openly confronting fellow norin zoku and agricultural protectionists in his own party in order to serve his political ally, Abe, on both the TPP and Japan Agricultural Cooperatives (JA) reform.

In contrast, when Hayashi was first appointed as MAFF minister in December 2012, it was well known that he was an agricultural policy novice — he was not a norin zoku, not a spokesperson for MAFF’s interests and not well linked to JA. Perhaps because of this, it was hoped that he could take bold action on agricultural policy to prepare the ground for Japan to join the TPP talks.

But compared to Nishikawa, Hayashi turned out to be politically weak vis-à-vis both the norin zoku and bureaucrats in his own ministry. When the Prime Minister gave him instructions in May 2014 to implement regulatory reforms in agriculture, Abe added that he wanted Hayashi to ‘coordinate with Chief Cabinet Secretary Suga and work on putting these reforms into practice’. There were rumours that the Kantei did not consider Hayashi to be very reliable, so Abe probably judged that Hayashi could not fight MAFF bureaucrats and the norin zoku on his own.

But Hayashi has more expertise in trade policy than Nishikawa and is thought to be well connected in the United States. He is a former executive of trading company Mitsui & Co. and has seen how the US government works from the inside, having served as a Congressional staffer in the 1990s. The head of JA-Zenchu (the Central Union of Agricultural Co-operatives), Akira Banzai, praised Hayashi on his reappointment as MAFF Minister, saying that ‘Minister Hayashi has an excellent international mindset, and at the same time … is also well informed about the realities of agriculture and rural areas’.

In an article in the Japanese monthly literary magazine Chuo Koron in May 2013, Hayashi recalled how when he was a Congressional staffer, all members of Congress raced to form bills, most of which never passed. One of these bills aimed to ‘reduce imports of Japanese cars to zero in five years. Everyone in Washington knew that it was never going to pass …. [but] Japanese newspapers … reported the bill on their front pages …. As a result, the impression that the United States was “unreasonable” became imprinted on Japanese people’s minds’.

In the same article, Hayashi contrasted the US negotiators’ method of putting everything on the negotiating table, even when they knew it could not be achieved, with the Japanese style of carefully selecting what they negotiated on. Hayashi brings this understanding to US–Japan TPP negotiations. He, like others, believes that the US desire to have Japan on board the TPP should be used as a bargaining chip.

Hayashi also has crucial experience in TPP policy development in his own party. He was chairman of the TPP Examination Subcommittee of the LDP’s Diplomacy and Economic Partnership Investigation Committee, which was established as the official body for determining party policy on the TPP negotiations. He put together the six judgment criteria for participation, including opposing the TPP as long as the negotiations were premised on ‘tariff abolition without exceptions’.

As Deputy Chairman of the LDP’s Policy Research Council, Hayashi assisted in formulating the party’s policy on the TPP for the LDP’s 2012 Lower House election manifesto — in particular, the same key phrase that the party ‘will oppose participating in the TPP negotiations as long as they are premised on “tariff abolition without exceptions”’.

The initial draft stated, ‘We will support participating in the TPP negotiations as long as it is not premised on “tariff abolition without exceptions”’. But in order to win over the JA and other agricultural organisations, the sentence was intentionally rewritten so that it emphasised resistance to participating in the negotiations. It had the desired political effect: JA abandoned the Democratic Party of Japan administration and supported LDP candidates in various local electorates.

Hayashi later vowed to protect the five key sensitive agricultural products as being in the national interest. As he argued in his article in Chuo Koron, ‘these crops were those that “remained” after long years of discussions on free trade that led to the reduction of tariffs for all other agricultural products. There is no reason to break down the walls of these “sanctuaries” just because we are joining the TPP’. He offered the same reassurance in his inauguration speech on 23 February, promising to adhere to the Diet resolutions on securing exceptions for the five sensitive items.

Although Hayashi clearly plays second fiddle to TPP Minister Akira Amari in the TPP negotiations, he is still young enough to harbour ambitions to replace Abe as LDP leader, having already run against him in September 2012. As such there is a risk that Hayashi may be inclined to play it safe politically rather than be bold on agricultural trade reform.

How will Japan’s new agriculture minister influence the TPP negotiations? is republished with permission from East Asia Forum

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