It
is difficult to make sense of the shocking news of the assassination of
Japan’s former prime minister Shinzo Abe. I lived in Japan for more
than 10 years and can barely remember a media report about gun violence
there. Moreover, Japan’s political culture in recent decades has
generally been peaceful and civil, and such a violent act is
unthinkable.
Abe was the most consequential politician
in modern Japanese history. His legacy—while not without
controversy—includes a broad range of accomplishments, from
strengthening Japan’s defense to reinvigorating its diplomacy to making
Japan a more open and accessible country. But it is in economic
policy—especially his efforts to update and uphold global economic
rules—that Abe arguably made one of his greatest marks.
Even before he resumed office in late
2012, Abe had signaled that domestic economic revival—a subject he had
largely ignored in his first, unhappy stint as prime minister in
2006–2007—would be a top priority of his new administration. For more
than two decades since the “bubble economy” of the late 1980s burst,
Japan had faced slow growth and three powerful economic headwinds:
deflation, debt, and demographics (an aging and declining population).
Abe proposed a three-pronged economic strategy—quickly dubbed
“Abenomics” by pundits—featuring aggressive monetary easing, flexible
fiscal policy to bolster growth while containing debt, and deregulation
and other structural reforms.
Abenomics made sense as a strategy but
largely failed in implementation. Abe’s pick as central bank governor,
Haruhiko Kuroda, injected the promised monetary stimulus (and continues
to do so even as the yen plummets and other central banks raise interest
rates), but the other two “arrows” of Abenomics failed to take flight.
Japan’s economy still suffers from tepid growth, deflationary pressure,
and structural inefficiencies.
Abe’s efforts in the international
economic realm have been far more impactful. Less than two months after
returning to office, Abe visited Washington in February 2013, making a
memorable speech at CSIS in
which he declared that “Japan is back.” The new prime minister noted
that as he spoke, his officials were negotiating the terms of Japan’s
entry into the Trans-Pacific Partnership (TPP), the comprehensive,
high-standard trade agreement that the United States was then
negotiating with 10 other Asia-Pacific partners.
Abe’s TPP announcement had ripples as far
away as Beijing, where it sparked serious debate among officials and
scholars in early 2013 about whether China should also apply for TPP
membership and use the agreement’s high standards to drive economic
reform at home. While new leader Xi Jinping had other ideas, and reform
momentum in China soon reversed, Japan’s entry into TPP in mid-2013
galvanized high-standard, market-oriented rulemaking across the
Asia-Pacific region for the next several years.
In addition to kickstarting TPP, Abe played an even more critical role in salvaging the agreement after
Donald Trump, in one of his first acts as president, pulled the United
States out of the agreement in early 2017. Against all odds, Abe rallied
the 10 other TPP member countries and ultimately won their support for a
Comprehensive and Progressive Agreement for Trans-Pacific Partnership
(CPTPP) that largely kept the previous agreement intact and left the
door open to an eventual U.S. return.
But it was not just in trade policy that
Abe left an important legacy in global economic rulemaking and
norm-setting. In May 2015, Abe announced a new “Partnership for Quality Infrastructure”
featuring high standards for labor, environment, and debt
sustainability in infrastructure projects—a none-too-subtle response to
China’s ambitious Belt and Road Initiative and establishment of the
Asian Infrastructure Investment Bank. As host of the G20 summit in Osaka
in 2019, Abe won endorsement—including by China and other large
emerging markets—of a set of “quality infrastructure principles” to govern the trillions of dollars of investment in roads, hospitals, and digital infrastructure needed in the Asia-Pacific region alone.
A third example of Abe’s impact in global
economic rulemaking is in the critical area of data governance. The
global economy is increasingly digitized, with massive amounts of data
created every minute, yet there are no internationally agreed rules on
the privacy, security, and flows of these data. Speaking at the World
Economic Forum in Davos in January 2019, Abe proposed the concept of “data free flow with trust”
(DFFT) as the organizing principle for global rulemaking in this area.
Again, Abe won G20 endorsement of this concept, and the current Kishida
administration is reportedly planning to make realization of DFFT rules
and norms a priority for Japan’s G7 host year in
2023.
For decades, Japan was essentially a rule
taker in the global economy, often assuming a defensive posture in
international trade and rarely taking risks to champion new rules and
norms. Abe changed all that, as his bold efforts on TPP, quality
infrastructure, data governance underscore. At a time when the global
economic order is under stress and the United States has pulled back
from its traditional role as shaper of global economic rules, Abe’s
leadership was pivotal. His legacy will long outlive his tragic end.
Matthew P. Goodman is senior vice
president for economics at the Center for Strategic and International
Studies (CSIS) in Washington.
Commentary is
produced by the Center for Strategic and International Studies (CSIS), a
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solely those of the author(s).
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