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Friday, Aug. 17, 2012

Possible election clouds TPP, energy policy outlook

Kyodo

Prime Minister Yoshihiko Noda's promise to call a snap election "soon" has probably put an end to Japan's prospects of joining the Trans-Pacific Partnership free-trade talks by year's end, and also complicated the adoption of a new national energy strategy.

Noda's ability to move forward on critical trade and energy issues is considered unlikely with a general election looming and his lame-duck administration no longer in a position to determine major long-term policies.

The government must announce whether it wants to join the TPP by the end of the month in order to become a participant by year's end, given the time required for approval by the U.S. Congress.

TPP advocates hope Noda will make a declaration now that the Diet has passed legislation to double the sales tax, enabling Japan to join the year's final round of negotiations in December.

But given mounting resistance to entering the TPP talks among lawmakers from both the ruling and opposition camps, it will be almost impossible for Noda to declare Japan's plan to join in, sources said.

And with American carmakers adamantly opposed to Japan's entry, the U.S. is also likely to take a wait-and-see stance until the uncertainty surrounding Noda's fate is resolved, they said.

If Japan fails to make a TPP announcement by month's end, Washington is expected to put the issue on the back burner until after the November U.S. presidential election.

Japan may also drop plans to participate altogether, depending on the outcome of any forthcoming general election.

Meanwhile, coming up with a new energy mix in light of the nuclear crisis has become equally troublesome.

The government has proposed three options for reliance on nuclear energy by 2030 — zero, 15 percent, and 20 to 25 percent of total power supply — compared with 26 percent in fiscal 2010.

While Noda's administration views the 15 percent option as the most practical, it has found itself "trapped," as one government official put it, because of strong calls for a complete abolition of atomic energy at public hearings it held nationwide, as well as mass protests held weekly outside the prime minister's office.

In response, the government already has begun discussing a delay in the new energy policy, the preparation of which was due to begin this month.

Industry minister Yukio Edano also said last week that 2030 may not necessarily be used as the time frame for determining Japan's nuclear power dependency, suggesting the government is wavering on hammering out specifics.

Both the ruling Democratic Party of Japan and its biggest foe, the Liberal Democratic Party, are expected to face internal splits over future atomic energy generation at a general election.

"We don't want nuclear power to become a campaign issue in the election" to avoid a further delay in setting energy policy, a senior industry ministry official said.



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