Will American populism damage Japan?
5 Mar 2020|

After the gains made by former US vice president Joe Biden in the Democratic primaries on Super Tuesday, Senator Bernie Sanders is slightly behind but still a frontrunner for the party’s nomination to face President Donald Trump in November. If Sanders does end up as the Democrats’ standard-bearer, this year’s presidential election will be a choice between his left-wing brand of populism and the right-wing variety espoused by Trump.

For Japan, the potential implications of such a contest could be huge. Since taking office, Trump has consistently shunned multilateralism and pursued a divisive domestic agenda that is contributing to a further hardening of partisan attitudes in the United States. Sanders, meanwhile, seems to share Trump’s protectionist instincts regarding trade.

Japanese political and business leaders are especially concerned by the decoupling of economic ties between America and China, the country’s two biggest trading partners. A breakdown in US–China trade relations, or a proliferation of protectionist measures around the world, would disrupt global supply chains and could have a devastating impact on Japan’s economy, the world’s third largest. On China, Democrats don’t appear overwhelmingly different from Trump and the Republicans.

Sanders has blamed trade agreements for eliminating millions of US jobs, and has voted to pull the US out of the World Trade Organization. And Biden, a moderate and Sanders’s main rival for the Democratic nomination, has criticised the manner in which the Trans-Pacific Partnership was drafted, despite having previously promoted the deal.

Nonetheless, Japan maintains some significant strengths. After Trump withdrew from the TPP in early 2017, Japanese Prime Minister Shinzo Abe led the pact’s remaining signatories to conclude the Comprehensive and Progressive Agreement for Trans-Pacific Partnership instead. And a free-trade deal between Japan and the European Union entered into force last year.

Furthermore, Japan’s relatively high standing with ASEAN states boosts its chances of playing a greater global leadership role. In fact, one recent regional survey measuring perceptions of trust in major global powers found that Japan ranked well ahead of the EU, the US, China and India. And among respondents who said they distrusted Japan, the most common reason given was that the country lacked the capacity or political will to act as a global leader.

Japan therefore should build on the trust it enjoys in Southeast Asia, because closer ties with ASEAN are intrinsically valuable and will also better position Japan to engage with the EU. But if Japan is to become a more established vanguard of the rules-based multilateral order, it must act as a rule-shaper and proactive stabiliser. For example, Japan should seek to use its recent large trade deals as leverage to bring the post-Brexit UK into the CPTPP. At the same time, it should perhaps aim to extend its new relationship with the EU to the other CPTPP countries through another pact. This would require aligning CPTPP countries’ policies on critical issues such as data and climate change with those of the EU.

In addition, Japan must help to conclude the Regional Comprehensive Economic Partnership, a long-envisaged free-trade agreement between 10 ASEAN member countries and six Indo-Pacific states (Australia, China, India, Japan, South Korea and New Zealand). Such an effort will face headwinds, in particular India’s apparent reluctance to participate in negotiations. India’s withdrawal from the RCEP talks would be a major setback to the Abe government’s free and open Indo-Pacific strategy. For now, Japan must strive to ensure that India can eventually be included in the RCEP if conditions allow.

Finally, Japan and China have agreed on the importance of principles such as transparency and debt sustainability with regard to infrastructure investment, which could provide a window for greater bilateral cooperation based on mutually accepted rules. Although the coronavirus will likely force a postponement of Chinese President Xi Jinping’s visit to Japan, the outbreak has heightened a sense of mutual vulnerability. Japanese authorities and companies have provided China with more than two million masks, and Japan is expected to receive at least a million in return from its neighbour. This ‘mask diplomacy’ has had a stabilising effect on bilateral ties.

But although Japan has a wealth of opportunities to help strengthen the liberal international order as a rule-shaper, its ability to do so is still based on its cooperation with the US. And the future strength of that alliance will hinge heavily on how Americans vote come November.

American populism’s gains, on both the left and the right, will further complicate the US–Japan alliance, thus restricting Japan’s role as a rule-shaper. In addition, Japanese policymakers currently must contend with Trump’s obstinacy on the issue of Japan’s host-nation support for US forces stationed in the country, with the administration appearing to press Japan for a massive increase. Democrats will most likely do the same.

In fact, a victory for either Trump or Sanders will raise anxieties in Japan. The US, it is feared, may treat Japan as a strategic bargaining chip should Trump prevail, or grow even more inward-looking if Sanders does. The sort of polarising populism exemplified by Trump, Sanders and several other current world leaders may present Japan and the international order with their biggest challenge of the post-war era.