Japan Post: Anti-Reform Law Clouds Japan's Entry to the Trans-Pacific Partnership

by Gary Clyde Hufbauer, Peterson Institute for International Economics
and Julia Muir, Peterson Institute for International Economics

May 2012

In 2005, Prime Minister Junichiro Koizumi pushed his landmark bill through the Japanese Diet, aimed at reforming Japan Post, the giant state-owned enterprise that provides postal services and houses two huge financial arms, Japan Post Bank and Japan Post Insurance. The bill envisaged substantial privatization by 2017. Subsequent Japanese governments have toyed with the idea of reversing the Koizumi law, but in January 2012, it still seemed possible that Diet members would preserve essential features of the Koizumi reforms. As it turned out, the opposition Liberal Democratic Party (LDP)—putting current political advantage ahead of its past pro-reform stand—joined anti-reform forces in the ruling Democratic Party of Japan and the New Komeito Party. This alliance submitted the Bill to Partially Revise the Postal Privatization Law through the Diet on March 30, 2012. The anti-reform bill was passed by the Upper House on April 27, 2012, with only one absenting vote from the LDP, and became law. The revised law turns back the clock on the Koizumi reforms and will cloud Japan’s potential participation in the Trans-Pacific Partnership (TPP) talks.

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