Japan PM Abe's Pacific trade pact gambit pays off, for now

By Tetsushi Kajimoto and Kaori Kaneko

TOKYO (Reuters) - Japan Prime Minister Shinzo Abe's first politically risky step of declaring the country's intent to join talks on a U.S.-led Pacific Rim free trade pact appears to be paying off as his record high ratings edge even higher.

Public opinion surveys showed on Monday that Abe's support ratings had risen since last month to reach the highest levels since he took office in December and a majority backed Friday's announcement that Japan wanted to join Trans-Pacific Partnership (TPP) membership talks.

The decision launches the "third arrow" in Abe's policy triad following the fiscal pump priming and hyper-easy monetary measures he has pushed since returning to office in December after his Liberal Democratic Party's (LDP) big election win.

While "Abenomics" has been playing to rave reviews in the Tokyo stock market and with voters, business executives and economists say its lasting success hinges on whether and how Abe tackles thorny reforms such as deregulation.

Japan's TPP participation is one such thorny issue and serves as the first test of Abe's ability to navigate the political minefield to get there.

Proponents say the trade pact will help tap vibrant regional growth and act as a catalyst for reforms such as deregulation. However, it is staunchly opposed by the powerful farm lobby, which has long served as the LDP's power base.

Two of Abe's predecessors from the now-opposition Democratic Party of Japan promoted the idea of joining TPP when they were in government, but stumbled over divisions within their own party.

ABE'S SALESMANSHIP

"The public support for the TPP is high. This shows that Abe's explanation of Japan's needs to join the TPP talks probably brought a feeling of security among the public," said Takehiko Yamamoto, political science professor at Waseda University.

In its election campaign, the LDP said it would oppose joining the talks if that required a commitment to abolish all tariffs without any exceptions and Abe has said he had won Washington's assurances that no such commitment was needed.

A survey by Asahi newspaper showed 71 percent of voters backed Abe's approach to TPP talks, while similar surveys by the Yomiuri and Mainichi newspapers showed some 60 percent of voters were behind it.

Support for Abe - Japan's seventh premier since popular Junichiro Koizumi ended a rare five-year term in 2006 - edged up in all the media surveys to the highest levels since he took office in December.

The Asahi daily showed 65 percent of voters backed Abe's cabinet, while the Yomiuri and Mainichi put his rating at 72 percent and 70 percent respectively, up between 1 and 7 points compared with previous surveys taken in February.

The consistently high levels of support are rare for a Japanese leader, whose ratings often start high but then sink. That fate befell Abe during his troubled 2006-2007 first term.

Abe's LDP and its junior partner have a huge majority in parliament's lower house but need to win a majority in a July upper house election to cement their hold on power and winning over TPP opponents remains a challenge.

"The LDP and its small ally Komeito party are sweeping the board at the moment. But we still have to see how Abe's government can persuade people such as agriculture lobbies and how Japan can negotiate with TPP member nations," said Waseda's Yamamoto.

The United States and 10 other countries are pushing for a deal by the end of the year and possibly as soon as an Asia-Pacific leaders summit in Bali in October. But hurdles to Japan's joining the talks remain.

Tokyo must first hold bilateral talks with existing members and win their endorsement amid worries that three-year old talks could get bogged down if Tokyo proved slow to address U.S. concerns over barriers to its auto, insurance and agricultural markets.

Other countries in the trade talks include Canada, Mexico, Australia, New Zealand, Chile, Peru, Vietnam, Malaysia and Brunei. The addition of the world's third-largest economy would expand the pact to cover nearly 40 percent of the world's economic output.

(Writing by Tomasz Janowski; Editing by Neil Fullick)

Source: http://news.yahoo.com/japan-pm-abes-pacific-trade-pact-gambit-pays-050722406--business.html

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