Japan’s formal entry into negotiations on the Trans-Pacific Partnership (TPP) today is only the first step on a long road. Indeed, the talks are likely to drag on well into next year, and perhaps beyond. The decision on whether to press ahead with the consumption tax hike will therefore still be the first major test of the government’s willingness to tackle structural reforms after Sunday’s Upper House elections. Nonetheless, any sign of backtracking on the TPP, notably in the face of opposition from the powerful agricultural lobby, could also undermine the credibility of “Abenomics”.
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