THE PRIME minister of Japan, Shinzo Abe, announced Tuesday that he will postpone a national sales tax increase and hold a snap parliamentary election next month. Both decisions must have been painful for Mr. Abe, since they amount to an admission that all is not well with “Abenomics,” his two-year-old effort to lift Japan out of its deflationary funk through aggressive monetary stimulus and structural reform. Japan’s economic woes can’t be denied; the country slipped back into recession in the third quarter of 2014, contracting 1.6 percent after a 7.3 percent decline in the second quarter.
Difficult though they may have been, both decisions were justified. Though designed to rein in Japan’s massive national debt, a previous sales tax increase under Mr. Abe had backfired and helped cause the recent recession by killing a nascent consumer spending boom. If he is to see Abenomics through, including politically difficult measures such as a restart of Japan’s nuclear power plants, Mr. Abe, who was elected in 2012, needs a fresh mandate from voters.
Despite his declining popularity, he is likely to get it. Japan’s friends in the United States should wish him every success.
To be sure, support for Mr. Abe is an on-balance judgment. On national defense, he has tried to move Japan toward a more robust defense posture, which is necessary and serves U.S. interests in Asia; yet his efforts have been sometimes accompanied by excessive nationalist rhetoric. Even on economic reform, Mr. Abe has talked the talk without always walking the walk; for example, he has eschewed a shake-up of Japan’s sclerotic labor market for fear of a public backlash. Ditto for the country’s famously protected farms.
Yet for now, Japan’s opposition parties are too weak and lacking in ideas to pose a credible alternative to Mr. Abe and Abenomics. The prime minister still represents the best available option to those who regard Japan’s recovery as indispensable to the global economy and, by extension, the U.S. economy. The Obama administration aided Mr. Abe recently with some good advice, in the form of a Nov. 12 speech by Treasury Secretary Jack Lew that strongly hinted Mr. Abe should postpone the sales tax hike. The same speech contained some useful urgings to speed up Japan’s structural reforms as well.
Washington can do more than offer words of wisdom, though. Nothing the United States can do or say would help Abenomics more than the swift conclusion of the Trans-Pacific Partnership trade agreement, whose market-opening provisions could spur Japanese farms and businesses to change their uncompetitive ways. The Obama administration has yet to seek the authority it needs from Congress to propel that deal to a swift up-or-down vote on Capitol Hill, once it’s been fully negotiated. Fast-track authority would demonstrate that the U.S. government is determined to overcome domestic opposition to a deal, which would make it easier for Mr. Abe to overcome similar resistance from Japanese interest groups. The sooner it’s approved, the better, for both countries.
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