Monday in Asia November 8, 2021

Richard Katz former editor of the The Oriental Economist Report and APP member started a new blog called “Japan Economy Watch” on Substack. While it’s mostly about the Japanese economy and economic policy, it also covers Japanese politics and US economic conditions and policy, particularly in the areas of trade policy and finance. You can reach it and subscribe for free HERE.

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SYMPOSIUM ON GLOBAL MARITIME COOPERATION AND OCEAN GOVERNANCE 2021. 11/8, 8:00pm-8:40am (EST), 11/9, 9:00am-9:40pm (CST), ZOOM WEBINAR. Sponsors: China-Southeast Asia Research Center on the South China Sea (CSARC); National Institute for South China Sea Studies (NISCSS). Speakers Include: E. Wang Yi, State Councilor and Minister of Foreign Affairs, China; Mr. Wu Jianghao, Assistant Minister, Ministry of Foreign Affairs, China; Liu Zhenmin, Under Secretary-General of the United Nations; Wang Hong, Vice Minister of Natural Resources and Administrator of State Oceanic Administration, China; H.E. Gloria Macapagal Arroyo, Former Philippine President; Michael Lodge, Secretary-General, International Seabed Authority; Adnan Rashid Nasser Al-Azri, Chair of the Commission on the Limits of the Continental Shelf. 

JAPAN HELD ITS HALLOWEEN ELECTION—WHAT NOW? 11/8, 8:30-9:30am (EST), 10:30-11:30 pm (JST), ZOOM WEBINAR. Sponsors: Stimson; The Canon Institution of Global Studies (CIGS). Speakers: Kuni Miyake, Research Director for Foreign and National Security Affairs, CIGS; Hiroyuki Akita, Commentator, Nikkei; Moderator: Yuki Tatsumi, Director, Japan Program, Stimson.

TAKING STOCK OF NEW FED AND ECB MONETARY POLICY FRAMEWORKS. 11/8, 9:00-10:30am (EST), WEBINAR. Sponsor: Hutchins Center, Brookings. Speakers: Ben S. Bernanke, Distinguished Fellow in Residence, Economic Studies, Brookings; Richard Clarida, Vice Chair, Board of Governors of the Federal Reserve; Philip R. Lane, Member, Executive Board, European Central Bank; Julia Coronado, President & Founder, Macropolicy Perspectives; Bill Dudley, Former President & CEO, Federal Reserve Bank of New York; Aysegul Sahin, Richard J. Gonzalez Regents Chair in Economics, University of Texas at Austin; Tiffany Wilding, Executive Vice President and North American Economist, PIMCO; Moderators: Rachana Shanbhogue, Finance & Economics Editor, The Economist; David Wessel, Director, Hutchins Center, Brookings. 

MOBILIZING FOR ELECTIONS: PATRONAGE AND POLITICAL MACHINES IN SOUTHEAST ASIA. 11/8, 10:00-11:15am (EST), ZOOM WEBINAR. Sponsor: Asia Center, Harvard University. Speakers: Meredith Weiss, Professor of Political Science, University at Albany; Allen Hicken, Professor of Political Science, University of Michigan.

SUSTAINABILITY, EQUALITY, PEACE: INTEGRATING CLIMATE CHANGE & WPS AGENDAS. 11/8, 11:00am-12:15pm (EST), WEBINAR. Sponsors: Georgetown Institute for Women, Peace, and Security; United Arab Emirates Mission to the United States; Support for Women in Agriculture and Environment (SWAGEN); Rural Women Energy Security (RUWES). Speakers: HE Pekka Haavisto, Finland's Minister for Foreign and European Affairs; HE Lana Nusseibeh, Permanent Representative of the UAE to the UN; Dr. Jonathan Pershing, Deputy Special Envoy for Climate, U.S. Department of State; Ann Cairns, Vice Chairman, Mastercard; Gertrude Kenyangi, Executive Director, Support for Women in Agriculture and Environment (SWAGEN), Uganda; Nafisah Abubakar, Head of Secretariat, Rural Women Energy Security (RUWES), Nigeria; Zonibel Woods, Senior Social Development Specialist, Asian Development Bank; Moderator: Amb. Melanne Verveer, Executive Director, Georgetown Institute for Women, Peace and Security.

BENEFITS AND PROSPECTS OF FREE TRADE IN ENVIRONMENTAL GOODS. 11/8, Noon-1:00pm (EST), WEBINAR. Sponsor: Cato. Speakers: H.E. Rep. Suzan DelBene (D-WA); Former Rep. James Bacchus (D-FL), Adjunct Fellow, Cato; Maureen Hinman, Co‐​Founder and Chairman, Silverado Policy Accelerator; Inu Manak, Research Fellow, Cato. 

ELECTION WATCH 2022: ONE YEAR OUT. 11/8, Noon-1:15pm (EST), WEBINAR. Sponsor: American Enterprise Institute (AEI). Speakers: Michael Barone, Senior Fellow Emeritus, AEI; John C. Fortier, Senior Fellow, AEI; Henry Olsen, Senior Fellow, Ethics & Public Policy Center; Norman J. Ornstein, Senior Fellow Emeritus, AEI; Moderator: Karlyn Bowman, Distinguished Senior Fellow, AEI. 

US-CHINA TECH COMPETITION AND EUROPE'S DEMOCRACIES. 11/8, 2:00-3:00pm (CEST), WEBINAR. Sponsor: Danish Institute for International Studies (DIIS). Speakers: Nigel Inkster, Senior Advisor, Cyber Security and China, International Institute for Strategic Studies (IISS); Didi Kirsten Tatlow, Senior Fellow, Asia program, German Council on Foreign Relations (DGAP); Luke Patey, Senior Researcher, DIIS. 

2021 ELECTIONS: RESULTS AND IMPLICATIONS. 11/8, 2:00-3:00pm (EST), WEBINAR. Sponsor: Brookings. Speakers: Elaine Kamarck, Founding Director, Center for Effective Public Management; Amy Walter, Publisher and Editor-in-Chief, The Cook Political Report; Chris Stirewalt, Senior Fellow, AEI; John Hudak, Deputy Director, Center for Effective Public Management; Moderator: Juan Williams, Senior Political Analyst, Fox News Channel. 

JAPANESE LEGAL SYSTEM. 11/8, 8:00pm (EST), 11/9, 10:00am (JST), ZOOM WEBINAR. Sponsors: Yokosuka Council on Asia-Pacific Studies (YCAPS); Japan Foundation Center for Global Partnership. Speaker: Tim Webster, Law Professor, Western New England University. 

SHAPING THE PRAGMATIC AND EFFECTIVE STRATEGY TOWARD CHINA: DEFENSE AND ECONOMIC SECURITY. 11/8, 8:00-10:00pm (EST), 11/9, 10:00am-Noon (JST), WEBINAR. Sponsor: Sasakawa Peace Foundation (SPF). Speakers: Kazuko Kojima, Professor, Keio University; Heigo Sato, Professor, Takushoku University; Toshiya Tsugami, President, Tsugami Workshop Ltd.; Tsuneo Watanabe, Senior Fellow, SPF; Eric Heginbotham, Principal Research Scientist, Center for International Studies, MIT; James Schoff, Senior Director, SPF USA; Mireya Solis, Director and Senior Fellow, Center for East Asia Policy Studies, Brookings; Nicholas Szechenyi, Deputy Director and Senior Fellow, Japan Chair, CSIS. 

Japan's Decarbonization: Greenwashing or not?

New Business Lobby Pushes Japan Decarbonization

By Richard Katz, Senior Fellow, Carnegie Council For Ethics in International Affairs, APP member
Tokyo Business Today, February 26,2021

The start of real action on climate change or just nice-sounding goals? That was the first question raised when on October 29 Prime Minister Yoshihide Suga targeted net zero carbon emissions by 2050.

While there is no guarantee, the likelihood of real action has been raised by rise of new lobbies like the Japan Climate Initiative (JCI), which, so far, includes 394 of Japan’s largest corporations. JCI has forged links with powerful leaders in the ruling Liberal Democratic Party (LDP), including two who may one day become Prime Minister: Administrative Reform Minister Taro Kono and Environment Minister Shujiro Koizumi.

When CEOs from four JCI companies—SONY, Ricoh, Kao, and Nissay Asset Management—met with Kono in November, SONY chieftain Kenichiro Yoshida delivered a troubling alert, Kono told the Financial Times. Unless Japan upped its renewables-based electricity generation to 40% or more by 2030, SONY and other companies could be forced by its customers to shift much production offshore.

Apple, for example, will eliminate by 2030 suppliers who don’t use 100% renewable electricity. SONY’s facilities in Europe can meet this demand, but not those in Japan. Only 19% of Japan’s electricity now comes from renewables, and the government’s current goal for 2030 is just 24%.

The question is the degree to which companies urging rapid action can overcome resistance by a powerful axis of companies linked to fossil fuels and nuclear power, the Keidanren business federation, and the Ministry of Economy, Trade, and Industry (METI).

The JCI—which also includes environmentalists and local governments—was created in 2018 to make sure that Japan fulfilled the Paris Accord goals. This January, 92 JCI member companies—those at the meeting with Kono, as well as heavy-hitters like Nissan, Softbank, Aeon, Fujifilm, Mitsubishi Estate, NEC, Nippon Life, Seven and i, Sumitomo Mitsui Trust, and Toshiba—urged that Japan achieve 40-50% renewables by 2030.

Last summer Keizai Doyukai, a federation of executives from 1,000 leading corporations, targeted renewables at 40%. “We can reach that level of renewables by 2030 with today’s technology,” explained Mika Ohbayashi, a member of the JCI secretariat and a director of Japan’s Renewable Energy Institute (REI).

“What is needed through 2030 are policy actions, such as changing land use laws so that abandoned farmland and other areas can be used for renewables, upgrading the electrical grid, and making sure that renewables have access to it.”

Even without such policy changes, the REI calculates that current trends will cause renewables to grow from 17% of electricity generated in 2018 to 32% by 2030 if electricity demand remains the same. Policy changes could boost it further to at least 39%, and even higher with more conservation of demand. However, to hit zero emissions by 2050, policy changes alone are not enough, added Ohbayashi. “For that, we will need revolutionary technologies.”

Kono told the executives he’d push for regulatory reforms regarding both land use and grid access. Under current rules, Japan’s ten regional utilities can still give their own plants priority access to transmission lines.

This is not a new issue for Kono. In 2008, according to Wikileaks, Kono complained in private that the utilities were not letting new companies transport wind-generated electricity from Hokkaido to Honshu even on unused transmission lines.

In December, it was Koizumi’s turn to meet with JCI execs. He upped the ante, by calling on them to support carbon pricing, considered the most effective way of changing behavior by consumers and companies.

Currently, Japan has one of the lowest effective rates of carbon taxation, just $3 per ton of CO2 emissions, compared to $22 in the UK, $33 in France, and $126 in Sweden. While Ricoh is pushing for carbon pricing, few other companies are doing the same. Ohbayashi believes that, if the government introduced a carbon price mechanism, then companies would accept it.

The shift in business attitudes has shown up in the behavior of many firms. Japan’s three megabanks have been regularly providing a third of all global financing for power plants using coal, the deadliest fossil fuel. Last spring, they said they would stop financing any new coal projects, although they will continue financing existing plants, perhaps until 2050.

Trading companies like Marubeni, Itochu, Mitsubishi, and Sojitz have said they will stop investing in coal mines and new coal plants. Toshiba stopped taking orders to build new coal-fired plants. It is notable that stock prices of Japanese firms engaging in proactive emission reduction measures have outperformed those without credible plans.

Not surprisingly, JCI and others find themselves struggling with other powerful corporate forces who oppose what they call hasty moves. Within weeks of Suga’s announcement, Toyota chieftain Akio Toyoda railed against the notion that Tokyo might end sales of gasoline cars by the mid-2030s. He warned of electricity shortfalls in the summer as well as the “collapse” of the current automotive business model.

While Keidanren supports the 2050 net zero as a worthy goal, it opposes many of the measures that experts say are needed to reach that goal. For example, Suga wants to phase out coal, which now fuels 31% of electricity generation, but Keidanren insists that coal is necessary until new technologies like reliable battery storage and hydrogen fuel are ready.

“Energy security means Japan must have diverse sources of energy, including coal, at least in short term,” argued Masami Hasegawa, a director at Keidanren. Keidanren emphasizes the development of carbon capture and storage (CCS) for “clean coal.”

Replacing coal-fired plants with natural gas as a bridging technology, as done elsewhere, could halve each plant’s emissions, but Hasegawa contended that storage issues would expose Japan to periodic electricity shortages if it were too reliant on LNG, as occurred briefly in January.

Keidanren also opposes a carbon tax, saying this would deprive companies of the funds needed develop indispensable revolutionary technologies, like hydrogen fuel and CCS. Unfortunately, a 2020 report by the International Energy Agency (IEA) speaks of two or three decades before these technologies become commercially feasible on a mass scale. To wait for them is a recipe for failure.

There are lots of ways to reduce emissions using today’s technologies. Steel in Japan produces about 10% of Japan’s total carbon emissions. The reason is that 80% of Japan’s crude steel output is still made in coal-fired blast furnaces, compared to 33% in the US. A stunning 35% of Japan’s houses have no insulation.

While Nissan, under Carlos Ghosn in 2010, put out the Leaf, the world’s best-selling electric vehicle (EV) until 2020, Toyota remains focused hybrids and hydrogen fuel cell cars. The latter barely sell. Akio Toyoda even asserted that, “the more EVs we build, the worse carbon dioxide gets.”

While Keidanren claims to speak for business, its approach actually contradicts the interests of the majority of Japanese companies, according to a 2020 report by InfluenceMap. Among the top 100 companies on the stock market, says the report, 61% would prefer to buy renewable-based electricity if enough were available.

InfluenceMap report asserts that just a few sectors tied to fossil fuels and nuclear energy dominate Keidanren policymaking, and firms from those sectors are the ones chosen to serve on METI’s advisory councils on energy. Hasegawa called InfluenceMap’s report inaccurate, saying that Keidanren’s Chair and 17 Vice Chairs are “well-balanced” among different sectors.

When asked why so many of these men were from companies that made coal plants, invested in coal mines, or financed coal projects, he replied that these firms also invested in renewables.

As for METI, consider its “green growth” agenda released two months after Suga’s speech. Without naming a goal for 2030, it set a 2050 goal of 60% renewables and for the remaining 40% to be generated from nuclear power, coal with CCS, and hydrogen.

While many experts, including the IEA, see restarting the closed nuclear power plants as necessary to reach net zero, nuclear has become unacceptable to voters due to the 2011 Fukushima disaster, an avoidable calamity caused by mismanagement by the TEPCO utility and poor oversight by METI. When METI speaks of eliminating gasoline-fueled cars by the mid-2030s, it includes hybrids as non-gasoline vehicles.

It calls for reducing Japan’s carbon emissions from 1.2 billion tons in 2019 to 930 million tons by 2030, the same disappointing goal set in 2018. By contrast, says REI, Japan must reduce emissions to 650 million tons by 2030 if it wants to reach net zero by 2050.

Suga’s own skills are critical to pushing METI to do better. When Suga was Shinzo Abe’s Chief Cabinet Secretary, he engineered changes that gave the Prime Minister unprecedented leverage over elite bureaucrats, including the power to approve as well as fire the top 600 officials.

The notion of pledging net zero by 2050 was originally intended to be announced by Abe in response to the expected election of Joseph Biden, but Abe resigned for health reasons. Unfortunately, Abe often announced lofty goals with little strategy to achieve them.

Suga is more decisive on economic issues but he suffers a very poor approval rating. Can he impose his policies on resistant bureaucrats if the latter think he may have to step down by autumn? One signal will be whether the companies advising METI on the new Strategic Energy Plan due in June include more like those in the JCI.

There’s nothing new about corporate resistance to aggressive action on climate change. What is new is strong business lobbying on behalf of robust measures. The balance of power between the two factions will be pivotal in whether announced goals lead to effective actions.

Shinzo Abe's Economic Legacy

By Richard Katz,  Senior Fellow, Carnegie Council For Ethics in International Affairs, APP Member

Tokyo Business Today, September 1, 2020

No matter what one thinks of Shinzo Abe and his policies, it is sad to see him forced off the stage because of this illness. Hopefully, doctors can find a way to treat it.

Aside from his longevity as Prime Minister, Abe will be judged first and foremost on his Abenomics. It was the claims of Abenomics that led the public to support him and acquiesce to other things they didn’t like. Unfortunately, the reality never lived up to the advertising.

Let’s look at Abe’s own measure of his success. He vowed to bring Japan to 2% real annual growth on a steady basis. He never came close. At the beginning, it appeared as if the economy was taking off. But that was misleading.

The economy had just gone through six years of a slump brought on by the global financial crisis by the time the LDP triumphed in the election of December 2012. GDP was down 1.4% from where it had been in the first quarter of 2007 prior to the global meltdown.

It was operating so far below full capacity use of labor and capital stock, that it was due for a spurt of relatively high growth to get back to full capacity. This came in the first five quarters of Abe’s tenure, from 2012-IV to 2014-I. GDP rose a total of 3.8%.

Then, Abe hiked the consumption tax and did so again in October 2019. Both hikes triggered mild recessions. Had Japan been fundamentally healthy, those would have been minor interruptions. But Abenomics had done nothing to elevate Japan’s potential growth rate on any long-term.

Consequently, in the six years from 2014-I to 2020-I (before COVID effects hit), GDP grew a total of just 1.8%. So, in those six years, GDP grew less than the 2% Abe claimed he would achieve each year.

Then there is harm to people’s living standards. Price-adjusted personal consumption in 2020-I—again before COVID’s economic harm set in--was 0.5% lower than it had been when Abe took office.

Never before during the lost decades had Japan suffered a consumption downturn for as long a period. This came, not because people are unwilling to spend, but because tax hikes and real wage cuts reduced their income. During Abe’s eight years, real wages per worker fell 3.5%.

How about the famous three arrows?

The only arrow Abe took seriously was the first: monetary stimulus guided by Bank of Japan Governor Haruhiko Kuroda’s Peter Pan theory: “the moment you doubt whether you can fly, you cease forever to be able to do it.” Abe and Kuroda, however, acted as if the obverse were true: if you just believe you can fly, then you can.

They believed that the main obstacle to growth was lack of confidence and deflation and, consequently, conquering deflation would revive growth. In reality, despite Kuroda’s claim he could hit 2% inflation in a mere two years, he never came close. This has caused a rethink among those monetary economists who believed that a central bank could achieve whatever inflation rate it wanted if it just tried hard enough.

From April 2015 (Kuroda’s original target date for hitting 2%) through June 2020, so-called “core core” inflation (excluding food, energy and consumption taxes), averaged a negligible 0.2%. Rhetoric aside, the BOJ has more or less dropped that 2% goal. To be sure, 0.2% inflation is better than the -0.6% deflation rate seen during 1999-2012. But that has done little or nothing to stimulate growth. The fact is that deflation is not the cause of Japan’s problems, but a symptom.

As for fiscal policy: Abe applied both the gas pedal and brake, often at the same time. His tax hikes took spending money away from people. On the other hand, government spending accounted for a huge 42% of all GDP growth during his whole reign and a stunning 80% during 2014-I to 2020-I.

Despite Abe’s (unfulfilled) pledge to reach a balance in the primary budget (the whole budget except for interest payments) by 2020, Abe was forced to keep on running big deficits lest the economy suffer no growth whatsoever.

The third arrow—productivity-enhancing structural reforms—was mostly promises and boasts, with very little action. It was less a policy than a sales pitch to foreign investors.

A next big test of Abenomics will come when we see how resilient the economy will be in the face of the global economic impact COVID.

Trump Retreats on Korean Trade

KORUS Is Safe for Now

By Richard Katz, Editor Oriental Economist and APP Member,
Foreign Affairs, SNAPSHOT, September 15, 2017

The American political system faced a tough test in the first week of September when U.S. President Donald Trump proposed withdrawing from the Korea-U.S. Free Trade Agreement (KORUS). Thankfully, the system passed. Trump was forced to backpedal in the face of near-universal condemnation from trade and foreign policy experts, the Chamber of Commerce and other business lobbies, Republican and Democratic leaders in Congress, governors whose states would be hurt, and some senior administration members who quietly voiced their concerns. In the middle of all this, North Korean leader Kim Jong Un’s test of an enormous bomb made Trump’s plan look even more reckless.

Trump dropped the plan—at least for now. The good news, then, is that the American system is still able to constrain the president, even one who combines extreme willfulness with intense disdain for expertise. The bad news is that, as some experts fear, the KORUS withdrawal plan could come back into the spotlight at any time.

That fear is valid, given that Trump really did intend to withdraw from KORUS rather than just send a threatening signal, according to our sources in Washington. Axios reported it was “as close as it gets to a done deal.” Consider the sequence of events: On June 30, South Korean President Moon Jae-in visited Trump in Washington. The preset agenda focused on the threat from North Korea, the possible deployment of THAAD missile defense systems by South Korea, and trade issues. Renegotiating KORUS was not on the agenda.

Nonetheless, in an unusual step, Trump departed from the prepared agenda soon after the discussion began, telling Moon that the two countries would renegotiate KORUS immediately. Moon did not acquiesce, but that didn’t stop Trump from making a unilateral announcement at their joint press conference later in the day that KORUS renegotiation would soon begin. Moon kept a diplomatic silence then, but the next day, he told South Korean reporters that there was no such agreement. Two weeks later, on July 13, U.S. Trade Representative Robert Lighthizer sent a letter to Seoul asking for a special session of the KORUS Joint Committee to discuss “possible amendments and modifications.” At the August 22 meeting, according to Inside US Trade, the United States demanded that South Korea implement all of its planned reduction in farm tariffs immediately instead of on the dates set out in KORUS. At the same time, it insisted that the United States be allowed to postpone its own tariff reduction by five to ten years from the dates set in KORUS. Washington offered nothing in exchange. Seoul refused, as would any country.

In reaction, Trump decided to withdraw from KORUS. A week later, on August 28, just hours before North Korea shot a missile over Japanese air space, a Trump aide presented the withdrawal plan at a meeting of cabinet secretaries and other senior officials. An attendee told one of our sources that the matter was couched as an issue of personal loyalty to Trump. Dissent would have been extremely awkward for anyone who wanted to keep their job. Only one attendee dissented at the meeting, although others offered their objections to Trump in private. Among those were Trump’s chief of staff, his national security adviser, and his defense secretary. They were rightly concerned that a rupture in U.S.-Korean relations would encourage Kim in his belief that aggressive tactics could split the alliance between the United States and South Korea, as well as the United States and Japan. The secretary of agriculture also objected privately. American farmers, who are major beneficiaries of KORUS, were up in arms.

Nonetheless, Trump continued talking in public of withdrawal, despite the missile launch over Japan and even after North Korea’s test of a purported hydrogen bomb. It took three days and an extraordinary mobilization by American economic and security groups and individuals to set Trump back on his heels. The White House made no statements; the news came out via press leaks and private briefings of Congressional leaders. Thankfully, Trump cannot match his loud barks with much of a bite.

Why did Trump want to blow up KORUS? Administration insiders have told our sources two different stories. Some discounted it as just a hard bargaining tactic with Seoul. Others say that Trump was trying to send a tough message to Canada and Mexico that, if they did not succumb to U.S. terms in the NAFTA discussions, Trump might withdraw from NAFTA as well. But it is likely that a third explanation coexists with the second. Trump has not delivered much to his base. He couldn’t get Obamacare repealed. He couldn’t get Congress to fund his proposed border wall with Mexico. He is waffling on assorted immigration issues. A tough stance with South Korea would offer something to his base. In fact, Trump reportedly first spoke to his aides about withdrawing from NAFTA, which is loathed in the five traditionally “blue” states in the Midwest whose turn to Trump made him president. However, Peter Navarro, the extremely hawkish head of the National Trade Council, advised Trump that such a move would hurt U.S. firms and workers. As the alternative sacrificial lamb, said our source, Navarro put forward withdrawal from KORUS.

Although trashing KORUS might provide some emotional satisfaction to some of Trump’s blue-collar constituencies, it will do virtually nothing to help their living standards. Even if Trump could bring South Korea’s trade surplus with the United States back down to where it was before KORUS, that would give Americans just $35 each. The reality is that Trump has little control over the size of the deficit, with or without KORUS. White House illusions about this stem from believing its own misleading numbers. For example, Lighthizer wrote in his letter to Seoul that “Since KORUS went into effect [in 2012], our trade deficit in goods with Korea has doubled from $13.2 billion to $27.6 billion, while U.S. goods exports have actually gone down. This is quite different from what the previous Administration sold to the American people when it urged approval of this Agreement.”

Yes, South Korea’s goods imports from United States did fall three percent between 2011 and 2016, but that is not due to KORUS. It is mostly due to slower growth in Korea. In fact, during the same period, Korea’s imports from the rest of the world fell 24 percent—eight times as much. And yes, South Korea’s trade surplus with the United States has doubled since 2011, but, during the same period, its trade surplus with the rest of world tripled. Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, wrote, “Without KORUS, U.S. exports of agricultural and manufactured products, as well as services, would likely have fallen substantially over the past five years.”

The Office of the U.S. Trade Representative has stressed that, in 2016, 90 percent of the United States’ entire trade deficit with South Korea came from passenger cars and auto parts. This, it says, proves how “closed” the country is to American automotive goods. Let’s take a closer look. American imports of South Korean cars and parts doubled during 2011-16. The cause lay not in KORUS but in the explosion of U.S. auto sales from just 13 million units in 2011 to a record 18 million in 2016 and the fact that, as quality soared above even that of Japanese brands in J.D Powers’ surveys of customers, the Korean automakers were able to sell pricier models.

Meanwhile, since KORUS came into effect, American automotive exports to South Korea have also doubled. In fact, Korea’s global car imports have risen from just 0.4 percent of car sales in 2000 to eight percent in 2011 just before KORUS went into effect, to 15 percent in 2016. The problem is that the U.S. share of South Korean car imports is still just eight percent, the same share as in 2011. This compares to 15 percent for Japan and 76 percent for Europe (the EU also has a free trade agreement with South Korea).

Trump does have an alternative that could appeal to his base without blowing up the U.S.-South Korean relationship. Between January and July of this year, America’s trade deficit with Korea fell 30 percent from the same months of 2016 and the deficit for the whole year may show an even bigger drop. Trump could take credit—as he has on other matters—even though he has nothing to do with it. In the famous expression from the Vietnam era, he should just declare victory and go home.

Thankfully, Trump cannot match his loud barks with much of a bite. He threatened to veto the budget—thereby causing the government to shut down—if Congress refused to fund his border wall with Mexico. Congress refused and Trump backed down. He will undoubtedly back down on his bluster about “stopping all trade with any country doing business with North Korea” as well. Stopping trade with China would wreak havoc on the U.S. economy. Nonetheless, the more Trump’s approval ratings erode, the greater will be his temptation to give his base something to send their pulses racing. Without constant vigilance, a return to his attempt to withdraw from KORUS is very possible. The U.S. political system has passed the test so far, but more trials lie over the horizon

If Trump Launched a Trade War on Asia

U.S. stocks swooned during China’s mild summer slowdown.
Imagine what 45% tariffs would do.

By RICHARD KATZ, editor of the Oriental Economist Report and APP member
Wall Street Journal, March 29, 2016

If Donald Trump becomes U.S. president, will he wreak havoc on world trade? Or is he bluffing when he proposes a 45% across-the-board tariff on manufactured imports from China, and 35% on goods made in Mexico by U.S. firms such as Ford Motor?

No one knows, perhaps not even Mr. Trump himself. But here’s what we do know.

First, U.S. law enables Mr. Trump to carry out his threats. Second, while such steps would damage the U.S. economy, perhaps sending it into recession, that damage would be dwarfed by the havoc created among U.S. friends such as South Korea, Taiwan and Thailand.

Even if Mr. Trump loses in November, his candidacy could spark a dangerous sea change. Since World War II, neither major party in America has nominated an outright protectionist. Many Congressional Republicans will no doubt look at his triumph and shift their own stance on trade out of fear of losing their party’s primary elections.

Mr. Trump’s threats violate the rules of the World Trade Organization, but there’s nothing in U.S. law to block a president who cares nothing for WTO rules. According to several respected trade lawyers, including Warren Maruyama, the former general counsel of the Office of U.S. Trade Representative, Mr. Trump can find authorization in Section 301 of the US Trade Act of 1974. It authorizes the president to impose sanctions, including tariffs, on any country that, in his view, undertakes an “act, policy, or practice” that is “unjustifiable” and/or “unreasonable” and “burdens U.S. commerce.”

Mr. Trump could decide that any economic inducements given by Mexico to Ford and other firms constitute an “unjustifiable” act. He’d likely ignore that his rival, Gov. John Kasich, provided special tax cuts to Ford to get it to return some assembly jobs to Ohio. Mr. Trump could call China “unreasonable” for “manipulating” its currency, even though the International Monetary Fund says China’s currency is no longer undervalued.

Mr. Trump says he’s not afraid of U.S. exports being hit in a trade war because China and Mexico would have more to lose. But when China is hit, as it was back in 2009 with an antidumping duty on tires, it hits back and does so quickly. U.S. exports to China and Mexico add up to 2% of U.S. gross domestic product, and 5% of manufacturing sales.

But the U.S. would also be hurt by a cut in imports. Mr. Trump’s tariffs would amount to a tax on American companies and households equal to 1.5% of GDP—1.2 points from his 45% tariff on Chinese products and another 0.3 points from a 35% tariff on goods made in Mexico by American firms. A hit of that size could cause a recession, such as the 1.4% peak-to-trough decline in U.S. GDP seen in 1990. Two years later, “It’s the economy, stupid,” got President George H.W. Bush evicted from the White House.

Beyond that, more than one-half of U.S. imports from China and three-quarters of U.S. imports from Mexico are capital goods and intermediate goods that American firms need for their own production. It’s impossible to abruptly shrink imports from China and Mexico without damaging U.S. firms, reducing long-term growth and destroying jobs. American-based auto plants forced to pay more for steel, for example, would suddenly find themselves less able to compete with imports from Europe, Japan and Korea.

Mr. Trump claims any damage will be swamped by benefits as his tariffs force firms to “bring the jobs back” from China and Mexico. In the case of China, that’s impossible because the growth of imports from China didn’t “take” jobs from the U.S., but from elsewhere in Asia.

During the quarter century from 1990 to 2014, the share of U.S. manufactured imports that came from China soared to 26% from 3.6%. But during that same period, according to the Congressional Research Service, the share of U.S. factory imports coming from all of East Asia stayed the same (47% in 1990 and 46% in 2014).

Imports from China didn’t add to U.S. imports; they mostly replaced imports that previously came from other countries. Computer chips once imported directly from Japan now come inside products assembled in China and are labeled “Made in China.”

While the U.S. would suffer, America’s friends and allies in Asia would suffer far more. The ratio of total China-bound exports to domestic GDP ranges from 3.5% in Japan to 10% in Thailand, Singapore and Vietnam to 13%-15% in Korea and Taiwan. Considering that around 40% of the value of these exports consists of imported inputs from the U.S. and other countries, the global damage from the ripple effects would be enormous.

Mr. Trump may not think this matters. But consider how U.S. stocks swooned in 2015 in reaction to a relatively mild deceleration in China. How much more severe would the impact be on currency and stock markets from the economic and geopolitical maelstrom Mr. Trump proposes to let loose—not to mention the anxiety of having such a reckless character at the helm in Washington.

Will US Republicans Defeat the TPP?

By Richard Katz is editor of The Oriental Economist Report and and APP member. This commentary is adapted from Foreign Affairs, October 7, 2015.

In a surprising development, it is congressional Republicans and a few of their business allies that now pose the biggest threat to the TPP. When an agreement was finally announced on October 5, neither a single Republican leader in Congress, nor any broad business federation could be found to support it. Republican support for the TPP is indispensable since most congressional Democrats oppose it and former Secretary of State Hillary Clinton has just come out against it.

Optimists argue that much of the immediate GOP criticism of the deal is temporary, the result of a misperception by some business sectors, such as pharmaceuticals, that the Obama administration sold them out in order to get a quick deal. But the reality, as one Washington-based business source told me, is that, “Reaching agreement was a case of now or never.” Some of the deal’s discontents, meanwhile, have convinced themselves that they can force a renegotiation, but that is a fantasy. “This was absolutely the best deal the United States could get, given the bargaining situation,” said one business source.

Many people, including myself, have grave reservations about the TPP and, back in May, I had proposed taking more time to fix the flaws (https://www.foreignaffairs.com/articles/asia/2015-05-12/trade-trials). However, that option is now gone. It will either be this TPP or none at all. The question for legislators in all countries is whether the pact’s benefits outweigh its flaws, whether this TPP makes things better or worse, and finally, whether rejection would lead to a better pact down the road, or to no pact at all.

Looming large over the debate in Congress is the immense veto power of assorted well-connected, well-financed special interests. Too many of those who claim to support “free trade” no longer mean a two-way street in which the United States helps promote its own prosperity by promoting that of its partners. Rather, they seek a system in which others open their markets to favored American business sectors, but the United States does not sufficiently reciprocate.

Senator Orrin Hatch (R-Utah), the chair of the Senate Finance Committee, lamented that, “I am afraid this deal appears to fall woefully short.” Hatch is upset because the U.S. pharmaceutical industry did not win its demand for adherence to the U.S. standard of 12 years of data exclusivity (the protection of clinical test data) for biologics Data exclusivity goes far beyond normal patents. Instead, Froman was compelled to compromise. Hatch has warned for months that he might be willing to let the entire deal fail over this one issue. Even more disappointing to the pro-TPP crowd was what one Washington trade expert called “the surprising neutrality” of Representative Paul Ryan (R-Wis.), chair of the Ways and Means Committee and point man for the TPP in the House: “I am reserving judgment.” Perhaps Ryan, regarded as an ardent free-trader, did not want to get too far ahead of his GOP colleagues. But it is worth noting that he hails from the dairy state of Wisconsin… A couple weeks ago, the dairy lobby sent a letter to Congress in which they noted “grave concerns” about a deal that would give New Zealand more access to the U.S. market, but would not adequately open Canada’s market to the United States. Then there’s tobacco. Froman agreed that tobacco products would be exempted from a trade dispute-resolution mechanism, called ISDS. The poster child for abuse of this process is a series of suits by Philipp Morris and R.J. Reynolds against several countries that required plain packaging on cigarettes. For some countries, removing tobacco from ISDS protection was a vital public health issue. However, Senate Majority Leader Mitch McConnell, who hails from the tobacco state of Kentucky, has suggested several times that exempting tobacco could be a deal-killer for him.

Given the divisions among the business community, not a single one of the leading broad-based business federations could come up a positive statement of support for the TPP. Knowledgeable observers expect that these federations will eventually energetically lobby for the TPP.

What is most disconcerting is the one-way street attitude of too many of those who call themselves “free traders.” Some in business and Congress—on both sides of the aisle—contend that the United States is already so open that there is little left to do. This causes resentment among the other TPP countries, who point to a host of issues, some of which the US did not even allow to be discussed in the main TPP talks, “Buy America” provisions of many state procurement laws (a $1.4 trillion market); the protectionist “yarn forward” rule in textiles; the refusal to bring down high import barriers on sugar and dairy; and tariffs on Japanese trucks (25 percent), cars (2.5 percent), and parts (mostly 6-10 percent) that will not be lifted under the TPP for 30, 25, and up to 15 years, respectively.

U.S. leadership rests on others’ perception of it as a benign hegemon. By undermining such perceptions, one-way street notions of free trade pose a far greater threat to national security than any free trade agreement that China could create.

Year Three of Abenomics: Wither the Third Arrow

Richard Katz, Editor of the Oriental Economist and APP member spoke to the Foreign Correspondents Club of Japan on February 2, 2015 on the prospects for Abenomics. He speaks to the need for institutional renovation if Japan's economy to revive. This requires leadership and this is not what Abe can provide. Abe is an ideological representative encased in marketing, not an inspirational and activist leader. He is a place-holding obstructionist of an ancien régime .

Don't get MAD, get MAP

ties that bind

Mutual Assured Production: Why Trade Will Limit Conflict Between China and Japan

By Richard Katz, 
editor Oriental Economist

APP member
First appeared in the July/August 2013 edition of Foreign Affairs

Last fall, as the countries escalated their quarrel over an island chain that Japan has controlled for more than a century, many Chinese citizens boycotted Japanese products and took to the streets in anti-Japanese riots. This commotion, at times encouraged by the Chinese government, led the Japanese government to fear that Beijing might exploit Japan’s reliance on China as an export market to squeeze Tokyo into making territorial concessions. Throughout the crisis, Japan has doubted that China would ever try to forcibly seize the islands—barren rocks known in Chinese as the Diaoyu Islands and in Japanese as the Senkaku Islands -- if only because the United States has made it clear that it would come to Japan’s defense. Japanese security experts, however, have suggested that China might try other methods of intimidation, including a prolonged economic boycott.During the Cold War, the United States and the Soviet Union carefully avoided triggering a nuclear war because of the assumption of “mutual assured destruction”: each knew that any such conflict would mean the obliteration of both countries. Today, even though tensions between China and Japan are rising, an economic version of mutual deterrence is preserving the uneasy status quo between the two sides.

But these fears have not materialized, for one simple reason: China needs to buy Japanese products as much as Japan needs to sell them. Many of the high-tech products assembled in and exported from China, often on behalf of American and European firms, use advanced Japanese-made parts. China could not boycott Japan, let alone precipitate an actual conflict, without stymieing the export-fueled economic miracle that underpins Communist Party rule.

For the moment, the combination of economic interdependence and Washington’s commitment to Japan’s defense will likely keep the peace. Still, an accidental clash of armed ships around the islands could lead to an unintended conflict. That is why defense officials from both countries have met with an eye to reducing that particular risk. With no resolution in sight, those who fear an escalation can nonetheless take solace in the fact that China and Japan stand to gain far more from trading than from fighting.

THE TIES THAT BIND
Although China first claimed the Diaoyu/ Senkaku Islands in 1971, it never did much to pursue its claim until recently. On the contrary, in the interests of improving economic and political ties, Chinese Premier Zhou Enlai and Japanese Prime Minister Kakuei Tanaka agreed in 1972 to shelve the issue indefinitely. Beijing even stopped Chinese nationalist activists from trying to land on the islands and prevented articles that asserted China’s claim to them from appearing in the Chinese press. In the last few years, however, China has reversed course and started to back up its claims with actions. In 2010, for example, a Chinese fishing boat rammed a Japanese coast guard ship in the waters around the islands. When the coast guard personnel arrested the fishing boat’s captain, Beijing declared that Japan had no jurisdiction in “Chinese territory” and cut off supplies to Japan of vital rare-earth minerals until he was released.

It took until July 2012 for the issue to explode. That month, then Japanese Prime Minister Yoshihiko Noda announced that his government intended to buy some of the islets from their private Japanese owner. Noda’s aim was to prevent them from being sold to the right-wing governor of Tokyo, who had revealed plans for the islands that would certainly have provoked China. But Beijing told Noda that it would see even the government’s purchase as an unacceptable change in the status quo. The Noda administration ignored warnings from both Beijing and the U.S. State Department and deluded itself that China would acquiesce to the purchase.

Then came the riots and the boycotts. For several weeks in August and September, Chinese protesters caused a ruckus, damaging Japanese-made cars, vandalizing stores selling Japanese products, and setting a Panasonic factory on fire. The police vacillated between encouraging and suppressing the riots, and some Chinese state media outlets listed Japanese brands to boycott. By the time the dust settled, Japanese firms operating in China had suffered about $120 million in property damage, and for a few months thereafter, sales of Japanese cars fell by approximately 40–50 percent.

The riots have stopped, but the larger conflict shows no signs of fading. China regularly sends armed surveillance boats into the islands’ territorial waters, and the Chinese Foreign Ministry now calls the islands a “core interest,” a term limited to the most sensitive areas regarding China’s sovereignty, such as Taiwan and Tibet. China’s Commerce Ministry has hinted at the possibility of a prolonged boycott to get Tokyo to concede that China has legitimate claims to the islands. It warned last September that Noda’s purchase of the islands would “inevitably affect and damage . . . Sino-Japanese economic and trade relations.”

A boycott would indeed prove disastrous for Japan’s export-dependent economy. From 2002 to 2007, a third of Japan’s GDP growth came from an increase in its trade surplus, and another third came from capital investment, much of which was tied to exports. And China stands at the center of this picture. From 1995 to 2011, increased shipments to China accounted for 45 percent of the overall growth in Japanese exports. Since the crisis erupted last July, however, Japan’s price-adjusted exports to China have fallen by 20 percent, compared with an 11 percent drop in its global exports (as of March).

Japan’s dependence on China helps explain why the new Japanese prime minister, Shinzo Abe, has not followed through on the hawkish positions he touted during last December’s election campaign, such as his plan to place personnel and facilities on the Senkakus. Abe knows that his popularity hinges on Japan’s economic recovery, and lest he forget it, Japanese businesses have been urging him to refrain from any provocations while still seeking a resolution that maintains the country’s sovereignty over the islands.

But it is not only Tokyo’s behavior that has been tempered by economic interdependence. This year, Chinese censors have blocked the phrase “Boycott Japan” from Weibo, China’s equivalent of Twitter. During February’s New Year’s celebrations, Beijing banned sales of the popular “Tokyo Big Bang” fireworks, which simulate the burning of the Japanese capital. In late March, China even joined Japan and South Korea in long-anticipated talks aimed at forming a trilateral free-trade agreement.

Meanwhile, Chinese provincial governments, hungry for jobs and tax revenue, keep imploring Japanese companies to expand their operations in China. In February, the city of Chongqing hired the Mitsui Group, a Japanese conglomerate, to develop an industrial park aimed at attracting foreign investment. At a March conference of the Japan-China Economic Association in Beijing, China’s new vice president, Li Yuanchao, may have insisted that the media not photograph him shaking hands with Japan’s top business leaders, but he nevertheless asked those leaders to step up their investments. Even on the national level, China is far more pluralistic than it used to be. The Communist Party–owned Global Times published both pro- and anti-boycott op-eds last fall.

Nor do most Chinese consumers seem interested in a boycott. The Japanese products that have lost the most sales during these latest tensions have been the highly visible ones, which are vulnerable to social pressure. Last fall and winter, sales of the popular cosmetics and skin-care products made by the Japanese company Shiseido tumbled, partly because many customers refrained from sending them as holiday gifts. Some stores temporarily displayed Shiseido products less prominently, but very few stopped carrying them altogether.

The worst-hit Japanese products have been cars, since many were vandalized by hooligans during the riots. But sales are recovering. Last fall, Nissan, the Japanese automaker, offered its Chinese customers its new “Promise for Car Security” program, a guarantee of free repairs for vehicles damaged in anti-Japanese riots. That’s one reason why in March, sales at Nissan dealerships finally rose above the previous year’s levels. And as China’s infamous air pollution has worsened, February sales of air purifiers by Panasonic doubled from the year before, and sales of those made by Daikin quadrupled. Both are Japanese companies.

MADE IN CHINA, WITH HELP FROM JAPAN
Why does China, the world’s largest exporter, so badly need what Japan is selling? Put simply, China’s export-driven economic miracle depends on imports. Around 60-70 percent of the goods China imports from Japan are the machinery and parts needed to make China’s own products. China cannot cut off this flow, or risk disrupting it through conflict, without crippling its economy. That is why, during the height of the island crisis last fall, the same Chinese customs officials who sometimes delayed shipments of Japanese consumer goods let industrial parts pass through.

All quiet on Abe

Signatories of November 4, 2012 The Facts Ad

Shinzo Abe and the media: Self-censorship

Richard Katz, editor of the Oriental Economist and APP member, published the article below in OE's June 2013 issue (June 7, 2013)

The Japanese media is famous for finding fault with Prime Ministers within a couple months of their taking office. But Shinzo Abe “has been getting an incredible free pass for six months,” said one stunned American political scientist. The media had similarly acted as a cheering squad for Yukio Hatoyama in his first couple months—until his own fecklessness doomed him. In the initial honeymoon, the editor of one journal called the editor of another to complain about an article that, while accurate, made Hatoyama look bad. “Japan needs Hatoyama to succeed to reinforce ‘regime change,’ so we should support him.”

Today, editors and reporters are acting as if Abe’s success is somehow Japan’s last chance to revive. Meanwhile, Abe has carefully cultivated the media, reportedly having dinner with the President of almost every major media organization. Abe and Yomiuri publisher Tsuneo Watanabe reportedly meet frequently. (Click HERE and search for “Prime Minister of Japan’s Schedule” “PMJS” in tags)

The dog that didn’t bark
The media stance is sometimes seen in the news that they fail to report. The most egregious case has occurred around Abe’s comments on whether Japan’s actions during World War II and earlier deserve the label “aggression” used in the 1995 apology by Prime Minister Tomiichi Murayama. Proclaiming in the Diet that this was an issue for academic historians, it was, in fact, a refusal to reaffirm the Murayama statement.

Abe had promised himself not to let such issues arise before the July Upper House elections, but sometimes he just can’t help himself. The problem is that his beloved grandfather, Noboru Kishi, was directly involved as economic overlord of Manchukuo and a Minister in Hideki Tojo’s cabinet. Abe cannot admit to himself that his hero committed aggression. This is a problem that Abe shares with many other LDP leaders who are descendants of World War II-era leaders.

LDP Policy Affairs Council chair Sanae Takaichi went beyond Abe’s evasions, forthrightly claiming that, “It was understood at that time [before and during the war] that our nation had to fight resolutely in self-defense for its own survival.” Other ministers and party leaders have been forced to resign for far less damaging comments.

With the exception of a few outlets like Asahi, most of the media simply offered brief reports on Abe’s and Takaichi’s words. They provided little analysis and failed to explain the damage these comments did to Japan’s interests overseas, including cooperation with Seoul regarding North Korea. Abe’s views focus Asian attention on Japan’s past acts rather than China’s present ones. The US State Department summoned a senior official from the Japanese Embassy to express its distress.

Kyodo did a very good analysis, but few newspapers printed it. Jiji Press reported as if it were fact a statement from Chief Cabinet Secretary Yoshihide Suga that the Koreans had "misunderstood" Abe’s words. Think tanks whose leaders tend to be supportive of Abe, such as the Center for Strategic and International Studies (CSIS) in Washington, have tried to convey to Abe in private the impact he has had.

How many ordinary Japanese know that the man who campaigned on restoring US-Japan ties has been losing Washington’s confidence?

Suga tried to put an end to the whole issue by having Abe say that, “I never denied that Japan committed aggression.” Yet, Abe refuses to affirm it either. Nonetheless, the Yomiuri, which one journalist said is “acting like a government newspaper,” reported that Suga had successfully laid the issue to rest. Within Japan perhaps—especially since Toru Hashimoto has diverted attention via his notorious comments on “comfort women.” But not in the nations whose cooperation Japan needs.

Abe, Tamogami, and the “comfort women” ad
Nor has the daily press and TV investigated why so many of Abe’s aides and associates hold revisionist views. Consider Education Minister Hakubun Shimomura, the man in charge of Abe’s desire to make the education curriculum “more patriotic.”

In 2012, Shimomura said that Abe “should declare that the Nanking Massacre did not take place and the issue of comfort women does not exist. He should fully negate the Tokyo Trials historical viewpoint, and should also visit Yasukuni Shrine.” The interview was with Toshio Motoya, a real estate magnate and Abe associate whose magazine in 2008 awarded first prize to a notorious essay by Toshio Tamogami [Was Japan an Aggressor Nation? 2008], who was appointed [Japan] Air [Self Defense] Force Chief of Staff during Abe’s first term.

Tamogami claimed that, “Japan was ensnared in a trap that was very carefully laid by the United States in order to draw Japan into a war.” Though Tamogami was forced to resign, Mindy Kotler of the Washington-based Asia Policy Point, has discovered on Tamogami’s website that Abe appeared publicly at least six times at events sponsored by Tamogami’s Nippon Ganbare organization.*

Abe himself signed a November 4, 2012 advertisement in the New Jersey Star-Ledger denying the Japanese government and military’s role in forcing women into prostitution during World War II. So, did LDP Policy Chief Takaichi. Rather than justify the sex slavery, as Hashimoto did, Abe simply denies it. Abe heads the list of signers from the Liberal Democratic Party. According to Kotler, the signers include ten members of Abe’s current cabinet.** The ad was sponsored by the rightwing “Committee For Historical Facts” [Society for the Dissemination of Historical Fact].

Why the media protects Abe 
Why does so much of the media protect Abe? The reason seems to be that Abe gives the impression of being the strong leader that many Japanese feel is needed to get Japan out of its economic morass and to stand up to China and South Korea.

People admire Abe’s leadership capacity and personality far more than his individual policies. For example, in a May 28 poll in Sankei, 72% approved of Abe’s personal character and 67% approved of his leadership qualities. Both are significantly above the 54% who approved of Abe’s stimulus measures, the 47% who approved of his security policies, and the 32% who approved of amending Article 96 of the Constitution. Considering that 75% disapproved of Hashimoto’s comments on comfort women, what would happen to Abe’s approval rate if the press delved deeply into Abe’s views?

People yearn for a reason to hope and don’t want any news about Abe that could dampen their hopes. According to an important leader in Japanese journalism, editors and reporters are not merely unwilling to defy the feelings of their viewers and readers. Many of them share those feelings.

Asia Policy Point adds:
*7 (possibly 8 as one has disappeared from the website since ) 

Watch the Videos: 

November 24, 2012, http://youtu.be/3L9rn92WurI?t=41m21s;

June 30, 2011, http://www.youtube.com/watch?v=Vu98IK4wyuk;
May 11, 2011, http://youtu.be/61SIP9GdvEI?t=23m36s; 

September 21, 2010, http://youtu.be/nCfWX2--jtw?t=6m59s; 

June 9, 2010, http://youtu.be/FRWSE3ppZjs?t=6m33s; 

February 17, 2010, http://youtu.be/bY0jzrI3k0c?t=7m27s; 

February 2, 2010, http://youtu.be/xSMMjYcCl_U?t=15m37s

**See photo heading this article of "assentors/signatories". Separated out below is the list of Abe Cabinet members who signed "The Facts" ad in the November 4, 2012 New Jersey Start Ledger, which was two days before the US national elections and less than a week after Hurricane Sandy devastated parts of New Jersey.

Shinzo Abe, Prime Minister
Seiichi Eto, Special Advisor to Prime Minister on National Issues
Keiji Furuya, Minister in Charge of Abduction Issue and Nation’s Infrastructure Resilience
Tomomi Inada, Minister of State for Regulatory Reform
Yoshitaka Ito, Parliamentary Secretary of Finance
Shigeo Kitamura, Parliamentary Secretary of Cabinet Office
Hiroshige Seko, Deputy Chief Cabinet Secretary
Hakubun Shimomura, Minister of Education, Culture, Sports, Science, and Technology
Yoshitake Shindo, Minister of Internal Affairs and Communications
Hiroyuki Yoshiie, Parliamentary Secretary of Education, Culture, Sports, Science and Technology

More Sizzle than Steak

In the 2013 Winter issue of International Economy,  economic writer and APP member Richard Katz outlines "Why the Abe economy will fail."

Mr. Katz is editor of the semi-weekly Oriental Economist
Alert.

Abe is a victim of his own engineered good fortune. Katz writes:

Abenomics, the popular term for the economic policies of new Japanese Prime Minister Shinzo Abe, is likely to fall far short of its goals of reviving long-term vitality in Japan, although it could succeed in providing a temporary and illusory lift to both the economy and Abe’s Liberal Democratic Party. To provide a lasting revival, Japan needs a three-pronged approach of monetary stimulus, the right kind of fiscal stimulus, and structural reform. None of the three work without the other two.Abe, however, is focused only on the first two. With his party just back in power, he doesn’t want any reforms that step on toes. As a result, Japan is more likely to do what it has repeatedly done after previous bouts of stimulus:fall back into lethargy as soon as the stimulus is withdrawn. Beyond that, political obstacles from the Ministry of Finance, the Bank of Japan, and some parts of the business community are already preventing Abe from even implementing many of his ideas on fiscal and monetary stimulus.
.....

Abe’s notion of a “growth strategy” is mainly a trickledown approach of increasing corporate profits via a cheaper yen and tax cuts in the false hope that this would lead to more investment, hiring, and wage hikes. Real structural reform has to tackle Japan’s deep-seated defects
.....

Unfortunately, Japan is not a healthy economy and so is unable to respond to fiscal-monetary stimulus in the normal way. The household share of real national income has fallen. People are spending as much as they can, with the savings rate now down to around 2 percent from 13 percent back in 1997. If households  had more money, they’d spend more. Instead, the scheduled consumption tax hike will leave them with even less income.This chronic shortfall in consumer demand is why Japan had to depend so unhealthily on a growing trade surplus in 2002–2007, a tactic that Abe wants to repeat by driving the yen as low as ¥100 per dollar, according to some of his aides.

FULL TEXT HERE