Trouble for Tokyo: Japan's Foreign Policy Challenges

Trouble for Tokyo: Japan's Foreign Policy Challenges

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Officials in Tokyo have known for some time that Japan’s regional foreign policy needs to be revamped. The economic crisis has brought Japan’s export giants to their knees and forced the country’s economy to look at different ways of conducting business. Moreover, the nuclear crisis in Fukushima last spring further intensified Japan’s already acute energy security dilemmas. The dynamic security environment in Northeast Asia has not helped Japan’s footing either. Tokyo sees itself virtually surrounded by geopolitical challenges on all sides, including territorial disputes with China, South Korea and Russia and the consistent challenges it faces from an unpredictable regime in Pyongyang.

But all is not doom and gloom. Japan surely faces tough choices in how it conducts its foreign policy, but so do other states in the region. China needs to balance its regional ambitions with the strategic reality that primacy will not be voluntarily relinquished by Washington, Tokyo, Moscow or Seoul. South Korea also charts an uncertain course. Despite weathering the economic crisis better than Japan, South Korea is still vulnerable to the financial risks brought on by high household debt and the enhanced competition it faces since signing a series of free trade agreements. On the security front, Seoul continues to stare down a volatile cadre of military leaders in Pyongyang that have arguably accumulated even more power since Kim Jong-il’s death. Similarly, Russia, despite its “Pacific moment” this year at the Vladivostok APEC Summit, will need to considerably recalibrate its approach to the region if it wants to sufficiently benefit from its claims as an Asian superpower.

It is not too late for a proactive Japanese foreign policy in Asia. Tokyo needs to leverage the capital that it has already accrued amongst states in the region to regain some of its lost prestige.

One of the most obvious ways Japan can do this is through making the tough decisions that earmark its entry into the Trans Pacific Partnership (TPP). This is a move championed by industrial heavyweights such as Toyota, Toshiba and Mitsubishi, but fiercely opposed by lobbyists representing Japanese farmers who fear – with good reason – that the TPP will effectively eliminate their competitive advantage at home by ending exorbitant tariffs on agricultural imports. It may be political suicide for Prime Minister Yoshihiko Noda to completely abandon the farmers – especially considering it was their area that was most affected by the tsunami and earthquake last year. This caveat notwithstanding, it is imperative that Noda impress upon the agricultural block – which makes up merely 1.4% of Japan’s GDP  – that the country’s economic survival is at stake.

The TPP is not an economic vaccine though. Japan’s economic engagement with Asia needs to complement this with a focus on expanding its footprint with bilateral trade agreements. Tokyo has taken a proactive approach in this area in recent years, inking Economic Partnership Agreements with India, Singapore, Malaysia, Thailand, Indonesia, Vietnam, Brunei and the Philippines. Japan must now speed-up the pace of current EPA negotiations with regional heavyweights South Korea and Australia. It remains imperative that Tokyo not lose sight of the strategic importance of the former in light of recent sparring over the disputed Dokdo/Takeshima islets.

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