What Happened
As expected, Japanese Prime Minister Shinzo Abe's Liberal Democratic Party won handily in upper house elections — but not by enough to ensure a smooth path for his agenda, especially for contentious changes to the Japanese constitution. On July 21, Japanese voters selected half of the 245-seat House of Councillors, the upper house of the National Diet. Of the 124 contested seats, official results showed Abe's camp capturing 71, with the LDP securing 57 and ally Komeito winning 14.
Bundled with the seats not up for election this time, Abe commands majorities of 58 percent in the upper house and 67 percent in the lower house. While several opposition parties lost ground, the key opposition Constitutional Democratic Party of Japan made headway in the polls, scoring a net gain of eight upper house seats for a total of 32. Last, the occasionally LDP-friendly Nippon Ishin no Kai netted 10 seats, giving it a total of 16 in the upper house.
Why It Matters
The elections set the stage for the final two years of Abe's long stint as prime minister and head of the LDP. Unless it calls snap elections, its next electoral test won't come until lower house elections in October 2021. (The upper house will not come up for a vote again until 2022.) Abe's government will take the showing at the polls as a mandate to proceed with two thorny domestic policy issues.
The first will be finally minting a bilateral trade agreement with the United States. Although the White House gave Abe a reprieve until after the most recent election, U.S. President Donald Trump has expressed frustration at the lack of progress in negotiations and will expect results. For Japan, the key stumbling block to a deal with the United States has always been its agricultural sector, which would face stiffer domestic competition from U.S. imports. Because the system for electing the upper house skews in favor of rural constituencies, the LDP's win gives it a strong mandate to pursue a U.S. deal even if it must put agricultural concessions on the table to avoid the U.S. automotive tariff threat, with the hopes of securing some access for its industrial goods in the bargain.
The second issue before Abe's party is to finally instate a long-delayed increase in the country's consumption tax from 8 to 10 percent in October. The move would give the government critical room to shore up its budgets as demands for greater social spending rise amid Japan's demographic decline. However much it may be needed, the increase has been unpopular and its implementation delayed since 2015 out of concern over the economic impacts. Abe, who made the tax hike a major plank as he campaigned for these elections, has taken the vote as a green light to proceed.
But not all is rosy for Abe. The failure to secure a two-thirds standing in the upper house leaves Abe's constitutional reform agenda in a bit of a bind. The prime minister wants to change, Article 9, the charter clause that renounces war, to recognize the existence of the country’s self-defense forces. This is part of the LDP’s overall push to once again make the country’s military a tool of foreign policy. However, a two-thirds vote in both houses of parliament is needed to change the constitution. Even if Nippon Ishin no Kai did band together with the LDP on the issue, it would still leave Abe just shy of a two-thirds majority. The LDP might now reach out to the opposition Democratic Party for the People, given that it is somewhat open to an amendment. However, the party's reluctance to go along with the agenda to revise the pacifist article could mean that Abe might have to settle for less controversial amendments related to emergency powers, Diet seats and social spending. This would set a longer-term precedent for amending the constitution, which has been untouched since it was put into force in 1947, but leave Tokyo’s military renormalization efforts to a hazier set of legal frameworks.
Finally, this strong election showing paves the way for the next steps in Japan’s brewing trade war with South Korea. A hearing this week could give the Japanese government the authority to restrict nearly all exports to South Korea. With that, Tokyo shows no signs of staying its hand or de-escalating the tiff.
