Prime Minister Noda accomplished important steps including the selection of the F-35 as Japan’s next-generation fighter, relaxing the three arms export principles, and announcing a decision to join negotiations for the Trans-Pacific Partnership (TPP) – all of which demonstrated the current Japanese government’s readiness to revive the economy and strengthen security ties and capabilities.  At the same time, the government’s support rate began to collapse in a pattern eerily similar to Noda’s five predecessors, raising questions about the ability of the government to follow through on the more challenging political commitments related to TPP.  President Obama met Noda at the United Nations in New York and at the Asia-Pacific Economic Cooperation (APEC) forum in Hawaii in an active season of bilateral diplomacy.  Public opinion surveys revealed generally positive views of the US-Japan relationship in both countries but the impasse over relocating Marine Corps Air Station Futenma fueled negative perceptions in Japan.

Take three: enter Noda

Noda Yoshihiko formally introduced his Cabinet on Sept. 2 and revealed in his personnel choices a desire to represent the various power centers within his ruling Democratic Party of Japan (DPJ).  Unlike his predecessor Kan Naoto, who distanced himself from party kingmaker Ozawa Ichiro and did not install any of his loyalists in the government, Noda appointed two lawmakers with close ties to the former party president and engineer of the 2009 election victory: Ichikawa Yasuo as minister of defense and Yamaoka Kenji as minister of consumer affairs.  (Ichikawa made a clumsy debut by declaring himself an amateur and claiming this was a hallmark of civilian rule over the military.)  The new trade minister, former socialist Hachiro Yoshio, resigned after eight days for reportedly joking with the media about radiation and referring to the area around the Fukushima Daiichi nuclear plant as a “city of death”; he was replaced by Edano Yukio, a rising leader who had served as chief Cabinet secretary under Kan and was the chief government spokesman after the March 11 disasters.  Noda also gave prominent posts to other members of the younger generation such as Hosono Goshi, who was retained as the minister in charge of handling the Fukushima nuclear accident and was appointed environment minister; Gemba Koichiro, the new foreign minister who like Noda hails from the Matsushita Institute of Government and Management; and Furukawa Motohisa, who became minister for national policy.  Noda’s “balance of power” approach also manifested itself in party posts.  In another nod to Ozawa, Noda installed Koshiishi Azuma as DPJ secretary general but appointed Maehara Seiji, former foreign minister and also a Matsushita Institute graduate, as chairman of the Policy Research Council.  This was a bold attempt at forging unity in a party devoid of consensus on several policy challenges and facing an opposition likely to complicate the legislative process.

Noda also distinguished himself with two decisions regarding policy coordination.  First, in defiance of the DPJ focus on “politician-led government” (seiji shudo) meant to weaken bureaucrats, he reinstated regular meetings among administrative vice ministers (jimujikan kaigi) that up to 2009 had been a core mechanism for coordination across the government.  Noda also established a Council on National Strategy and Policy composed of Cabinet members and private citizens (including the governor of the Bank of Japan and the leaders of Japan’s two largest business associations) to develop a comprehensive revitalization strategy for the nation.  The Council is somewhat reminiscent of the Council for Economic and Fiscal Policy established in 2001 during the Koizumi administration to champion reform, but unlike that body was not established by law and the extent of its influence is unclear.  Nonetheless, both developments suggested an effort to strengthen competence and coherence largely absent under DPJ rule.

Much of the policy debate focused predictably on economic policy and the balance between stimulus and fiscal discipline.  After painstaking negotiations with opposition parties, the Noda government managed to pass a $158 billion supplemental budget, the third of the fiscal year, to support reconstruction efforts in the Tohoku region affected by the March 11 disasters.  The Diet also passed legislation establishing special economic zones in Tohoku to spur investment and also called for a reconstruction agency to guide the recovery beginning next spring.  The appreciation of the yen served as a drag on exports and led the government to intervene in foreign exchange markets on Oct. 31, but the issue persisted and estimates for growth were subsequently downgraded due to the strong yen and global economic downturn.  Despite these sobering developments Noda proposed a set of tax increases to shore up government finances, which proved controversial within his party and mystified the public.  (Opinion polls showed majority support for tax increases to support reconstruction, but much less enthusiasm for an increase in the consumption tax, which Noda earmarked for social security obligations.)  On Dec. 29 Noda reached a compromise with the DPJ leadership on a proposal that would increase the consumption tax gradually from 5 to 10 percent by October 2015 and include language that the increase could be delayed based on a review of economic conditions.  The compromise did little to stem the controversy over tax policy and Noda set himself up for a fierce legislative battle in the next Diet session.

Equally controversial on the economic front was Noda’s announcement on Nov. 11 that Japan would enter into discussions about joining the Trans-Pacific Partnership (TPP) trade negotiations.  The DPJ failed to reach consensus on this issue and agricultural interests led a spirited campaign against TPP under the rationale that their livelihoods were threatened, but Noda concluded that trade liberalization and enhanced competition would ultimately strengthen the Japanese economy, including the agricultural sector.  The announcement added fuel to a heated domestic debate about trade but also had potential implications for the US-Japan relationship as the US is already a party to the negotiations and would have to consult Congress before deciding whether to welcome Japan into the trade talks.  The leaders of the House Ways and Means Committee and the Senate Finance Committee submitted a letter to US Trade Representative Ron Kirk in early November expressing concerns about Japan’s interest in TPP, suggesting that the politics of trade would prove complicated in both capitals.

Two developments in the realm of security also had important ramifications for US-Japan relations.  On Dec. 19 the government announced that it had selected Lockheed Martin’s F-35 as its next generation fighter aircraft and would allocate funding for the purchase of four aircraft in fiscal year 2012.  One week later Chief Cabinet Secretary Fujimura Osamu issued a statement announcing a relaxation of Japan’s three arms-export principles to allow the transfer of equipment overseas for peacekeeping operations and joint development and production of defense equipment, which would enable Japan to acquire advanced technology for much less than it would cost to develop indigenously and expand opportunities for defense industrial collaboration with the US.

The Noda government dispatched several officials to Okinawa in an effort to make progress on the realignment plan for Marine Corps Air Station Futenma, but was embarrassed by a scandal that further weakened the prospects for a breakthrough.  Japanese media reports alleged that on Nov. 28 Tanaka Satoshi, director general of the Okinawa Defense Bureau in the Ministry of Defense, likened the relocation of Futenma to a rape in a private session with reporters during a visit to Okinawa.  Defense Minister Ichikawa apologized for Tanaka’s remarks the next day and dismissed him from his post, but then made matters worse by confessing during an appearance in the Upper House of the Diet on Dec. 1 that he was not familiar with the details surrounding the 1995 rape of a 12-year old school girl by US servicemen stationed in Okinawa.  Opposition parties passed a nonbinding censure motion against Ichikawa in the Upper House on Dec. 9 and demanded his resignation. Prime Minister Noda refused to sack him, prompting the opposition Liberal Democratic Party (LDP) to vow not to cooperate with Noda during the next legislative session when the budget for the next fiscal year will be debated.

Noda’s proposal for tax increases, the heated debate over TPP, and the Tanaka scandal appeared to adversely affect views of the new government.  By mid-December, Noda’s approval rating had fallen to around 40 percent in some polls and one survey found that 86 percent of the public felt he was not explaining his policies adequately.  Many analysts observed that his leadership skills would be put to the test in the next Diet session, which could make or break his tenure as prime minister.  The decline in his popularity at home contrasted sharply with his image in Washington, burnished by his decisiveness on TPP, the relaxation of the three arms-export principles, and productive meetings with his US counterpart.

Bilateral diplomacy

Prime Minister Noda met President Obama on the sidelines of the UN General Assembly on Sept. 21 and the two discussed the bilateral alliance, trade, continued US support for Japan’s recovery from the March 11 disasters, and their respective plans to boost economic growth.  This was preceded two days earlier by a meeting between Secretary of State Hillary Clinton and Foreign Minister Gemba which focused on bilateral issues including Futenma.  The two governments then engaged in working-level consultations on regional and global issues and coordinated closely on the agendas for the Asia-Pacific Economic Cooperation (APEC) forum and East Asia Summit scheduled for November.
The debate over government spending in Washington attracted a great deal of attention in Japan as the prospect for substantial cuts in the US defense budget raised concerns about the sustainability of the US forward presence in the Asia-Pacific region.  Defense Secretary Leon Panetta visited in late October to reiterate the US commitment to the peace and prosperity of the region and the importance of alliances figured prominently in that message.  Panetta visited Tokyo on Oct. 25 and met with Prime Minister Noda, Foreign Minister Gemba, and Defense Minister Ichikawa.  Panetta and Ichikawa conducted a defense ministerial and addressed a range of issues including regional security, space, missile defense, information security, and the relocation of MCAS Futenma.  Deputy Secretary of State William Burns visited immediately after Panetta for consultations on a wide range of issues and delivered an address at the University of Tokyo on the enduring value of the US-Japan alliance in a bilateral, regional, and global context.

President Obama hosted APEC in Hawaii and met Prime Minister Noda on Nov. 12.  The two leaders discussed the Futenma relocation, Japan’s beef import restrictions, the upcoming East Asia Summit in Indonesia, and TPP.  Noda had announced his decision to enter into discussions over joining TPP a day prior and President Obama welcomed the decision, noting that eliminating trade barriers between the US and Japan presented an opportunity to strengthen the economic partnership between the two countries.  A read-out of the meeting issued by the White House caused a kerfuffle by indicating that Noda told Obama he would put all goods and services on the negotiating table for trade liberalization.  The Japanese government denied the statement and the dispute was covered widely in the Japanese press.  Noda then faced intense questioning back home about the meeting and how he characterized Japan’s interest in TPP.  This diplomatic row notwithstanding, the APEC meeting generated some momentum for the economic pillar of the relationship.

Rounding out a fall of steadfast diplomacy, Secretary of State Clinton hosted Foreign Minister Gemba at the State Department in Washington on Dec. 19, the day North Korean media reported the death of Kim Jong Il.  They discussed the evolving situation on the Korean Peninsula and President Obama discussed the matter with Prime Minister Noda in a telephone call later that day.  Clinton and Gemba also addressed bilateral cooperation to support the recovery from the March 11 earthquake, Japan’s interest in TPP, Japan’s progress in considering accession to the Hague Convention on International Parental Child Abduction, Burma, Afghanistan, Iran, and dialogue with India.  Assistant Secretary of State Kurt Campbell and Assistant Secretary of State Robert Blake co-chaired the first-ever trilateral dialogue between the United States, Japan, and India at the State Department that day.

Futenma relocation

The Japanese central government submitted an environmental impact statement on the Futenma relocation to the Okinawa prefectural government on Dec. 28, welcomed by the Pentagon as a sign of progress on the realignment plan agreed to by both governments.  But members of Congress remained skeptical about the prospects for success. Congressional appropriators cut $150 million in projects for the relocation of US Marines from Okinawa to Guam out of the National Defense Authorization Act (NDAA) for 2012 that was signed by President Obama on Dec. 31.  The Japanese government then decided to decrease funding for the relocation of US Marines from Okinawa to Guam by 85 percent in the draft budget for fiscal year 2012.  The NDAA called for an independent study of US force posture in the Asia-Pacific and the fate of the current Futenma relocation plan could depend on the outcome.

Perceptions of US-Japan relations

According to an annual survey of attitudes toward foreign countries released by Japan’s Cabinet Office on Dec. 4, a record 82 percent of Japanese have a favorable view of the US and 73 percent consider the US-Japan relationship in good condition.  But another annual survey published Dec. 18 by Yomiuri Shimbun and Gallup found much less sanguine views of the bilateral relationship in Japan.  Ninety-four percent of Japanese respondents appreciated US military relief efforts after the March 11 earthquake, but only 35 percent said US-Japan relations were good or very good; 52 percent of US respondents felt that way.  When asked whether they trust the US, 47 percent of Japanese said somewhat or very much; 67 percent of US respondents shared those sentiments about Japan.  Indicating the degree to which the Futenma issue is covered and impacts perceptions in Japan, 82 percent of Japanese felt the impasse over relocating MCAS Futenma has had an adverse impact on the relationship while 59 percent of US respondents said they were not familiar with the topic.  Seventy-two percent of US respondents thought Japan should join TPP negotiations but only 50 percent of Japanese were positive.  When Japanese were asked which institutions they trust (with multiple answers allowed), the Japan Self-Defense Forces topped the list for the first time at 75 percent and the National Diet fared worst with 17 percent.

Coming up

Prime Minister Noda faces a bruising battle over the budget in the Diet and could struggle to advance his tax proposals amid concerns about economic growth.  The Obama administration is expected to unveil a new defense strategy and outline cuts in defense spending but sustain its emphasis on Asia.  Bilateral diplomacy will proceed apace and the two governments may plan a series of events to commemorate the 100^th anniversary of Japan’s gift of cherry blossoms in appreciation for the US role in helping negotiate the end of the Russo-Japanese War.  Should Noda emerge from his legislative session unscathed, he could visit Washington in the spring to take stock of the bilateral relationship.