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G20 Analysis

From No-Kan-Do to a Cannes-Do Attitude

Hugo Dobson, School of East Asian Studies, Sheffield University
Cannes, November 4, 2011

Japan was represented at the November 2011 G20 Cannes Summit for the first time by Prime Minister Noda Yoshihiko, having been represented earlier in the year at the G8 Deauville Summit of May 2011 by Kan Naoto. Despite the support expressed for Kan and the Japanese nation by the G8 leaders at the Deauville Summit, Kan eventually resigned as a result of criticisms of his handling of the March 2011 triple disasters, commonly referred to as 3/11. Although a relatively new face represented Japan at Cannes, Noda had experience of G-x summitry in his previous role as finance minister.

The dominant narratives of Japan’s recent participation in G8 and G20 summitry have been: 1) the high turnover rate of leaders (Noda is the sixth prime minister since the resignation of Koizumi Junichiro in September 2006); 2) an ambivalent attitude toward the G20 as a result of a historical preference for the G8; and 3) recovery from 3/11, particularly in terms of the Japanese economy. Thus background objectives for Cannes included demonstrating leadership, overcoming doubts as regards the G20 and Japan’s role therein, and promoting a range of specific measures that would foster Japan’s recovery.

As regards specific goals, in a speech to the House of Representatives on 28 October 2011, Noda highlighted a number of objectives including stressing the need for Europe to get its house in order and also communicating the message that Japan is doing the same by addressing its own accumulated debt through concrete measures such as raising the consumption tax incrementally from 5 percent to 10 percent by 2015; addressing the high value of the yen, even if this involved currency intervention by the government of Japan and Bank of Japan, which took place immediately before the G20 summit and was met with criticism; and, as regards a decision on Japan’s participation in Trans-Pacific Partnership (TPP) talks, the G20 was mooted as a venue to announce Japan’s decision, with APEC a more likely possibility of providing the “deadline” effect that summits can exert.

As regards other objectives that emerged before the summit, on the role of the International Monetary Fund (IMF), Japan, alongside the United Kingdom, the United States, Canada and Australia, had rejected emerging countries’ plans to provide extra resources to tackle the crisis in the eurozone and in so doing reinforce emerging countries’ demands for greater influence on the grounds that the IMF possessed enough resources already to play an appropriate role in the crisis. On the issue of a financial transaction tax (FTT), it was difficult to discern a consensus prior to the summit, although it was regarded by some as another means of addressing the high value of the yen and realizing Japan’s commitment made at TICAD-IV in 2008 to double aid to Africa by 2012.

As always, the final summit statements were something of a curate’s egg and the G20 did ultimately agree to extend extra resources to the IMF. However, there was much for Japan to be satisfied with. Noda couched his explanation of Japan’s unilateral intervention in the currency markets to weaken the yen in the language of G20 statements on currency volatility, thus pre-empting any criticism. He pledged to the G20 to raise the consumption tax to 10 percent by the mid 2010s as part of demonstrating to the outside world that Japan was keeping its house in order. On the eurozone sovereign debt crisis, Noda promised Japanese cooperation if Europe could act in unison. On the TPP, Noda cited the need for intra-party discussion before a final decision could be made. The focus will now shift to the APEC meeting later this month in Honolulu. Finally, on the FTT, the Japanese government appears to be open to the idea and intends to explore it in more detail before reaching a consensus.

Thus, it is fair to say that Noda has been much more active and successful than his immediate predecessors. Although there will be considerable battles to be fought at home against entrenched domestic interests, this debut at the leaders’ summit hints at evolving prime ministerial leadership under Noda, as well as a possible breakthrough in terms of the G8-G20 impasse.

Hugo Dobson is a professor of Japanese studies in the School of East Asian Studies at Sheffield University and a member of the global G20 Research Group network. He is the author of Japan and the G7/8, 1975 to 2002, London: RoutledgeCurzon. He worked with the G20 Research Group on sight at the Cannes Summit, where he produced this assessment.