Shinzo Abe’s clear victory in Japan’s upper house election last weekend is a turning point for world trade. The Japanese prime minister has made commitments at home and abroad that, if allowed, his country would enter the Trans-Pacific Partnership trade negotiations and make the structural reforms needed for it to be a fair and full participant.
Pledges to open up Japanese agriculture and insurance, among other sectors, bravely ran ahead of what cynics thought the Japanese electorate would support. Mr Abe has gone way beyond the gaiatsu, the publicly reluctant utilisation of outside pressure to reform, of past Japanese leaders. He is following the examples of China’s Zhu Rongji and Mexico’s Ernesto Zedillo; Mr Abe has embraced international economic integration to drive significant domestic reform.
This matters, and not just for Japan itself. Its participation in the TPP strongly increases the prospects for an agreement of high-quality fit for the 21st century – one that emphasises trade in services as much as in goods; one that has high standards for intellectual property protections as well as for the environment; and one that looks beyond old-fashioned tariffs to focus on investment flows and non-tariff barriers (such as government procurement).