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T.J. Pempel
Director, Institute of East Asian Studies
University of California
The first characteristic of the post-war US-Japan relationship was
that it was highly bilateral in the areas of security and economics.
The American and Japanese governments were able to settle most issues
through bilateral negotiations. It was a hub and spoke relationship:
there were links between Washington and Asian capitals, but little
intra-Asian connection, until recently.
The second characteristic was the relationship's essential asymmetry.
It was not a relationship of equals, but the two countries were
complementary. The US has had greater power in security and economics;
and the US has had a global agenda. Japan's agenda was regional.
The theme of our presentation is the following: Despite frictions,
the two governments have been able to resolve their issues-both
in security and in economics. Some expected the bilateral security
treaty to become superfluous, but Japan and the US have kept reaffirming
the strength of the relationship through the Nye Initiative, the
Armitage Report, etc.
Recently, however, we have seen changes in the relationship.
The US and Japan have established a number of individual and collective
ties in Asia. Japan is exploring free trade areas (with Singapore,
Mexico, and others for example), while the US is forming a bilateral
relationship with China (the friendly elephant in the Asian living
room).
One of the global trends that we feel is notable is the significant
volume of capital flows (about $2 trillion moves each day). In
1983, the world's five largest national banks had three times
more in their reserves than the amount that was traded daily.
In 1986, the level in the banks' reserves was about the same as
the traded amount. But now, the amount that is traded is four
times as large as the reserves in the five largest national banks.
This makes monetary policy very difficult.
There are other trends too. Because regional organizations have
been proliferating, countries now have the option of forum shopping.
In other words, countries can select from various multilateral,
regional, and bilateral organizations, depending on the nature
or scope of the issue at hand.
In terms of Japanese government regional initiatives, private
and public sector interests are not meeting. The Japanese government
would like to provide linkages with Asian countries. But Japanese
companies are not as enthusiastic as the government is about investment
in Asia.
Japan's victories against the US at the WTO have given Japan
leverage to move away from the bilateral relationship. Japan now
has the power to shape policy, not necessarily in cooperation
with the US. That Japan is forming relationships with Europe and
other regions means that it will have better bargaining power.
Japanese government agencies, however, are not in agreement.
Finally, there is a risk of a backlash against free trade by
the US Congress if the US keeps loosing in international forums.
I could imagine Senator Jesse Helms leading such a backlash.
John Ikenberry, in his idea of an American grand strategy, emphasizes
the importance of US hegemony, bilateral security ties, and soft
multilateralism. The US-Japan relationship has provided regional
stability, keeping frictions down between Japan and China. Challenges
to US policy include a weak Japanese economy, US-Japan asymmetry,
sparse cooperation among US allies in Asia, US military stickiness
to new conditions, and the concern that the US will revert to
unilateralism.
Mike Mochizuki says that while Mr. Bush saw China as a competitor
(which was the reverse of Clinton), it has been difficult for
the US to see both Japan and China positively, simultaneously.
It is analogous to a cowboy movie: one of the two-China or Japan-wears
a white hat, while another wears a black hat. Mochizuki suggests
pulling China into multilateral organizations to reduce conflict.
Ellis Krauss
Professor, Graduate School of International Relations
University of California, San Diego
Our conclusions, though tentative, were very positive on US-Japan
relations. We noted some paradoxes:The first paradox is this: The
world has turned out to be different from the expectations in the
1980s. The establishment of APEC was seen as a way to keep the US
in Asia. American hesitancy toward multilateralism has been overstated.
Bob Zoellick and Bob Fauver were central players in US institution-building
in Asia. The US had high hopes.
But it turns out that Japan has taken a leadership role, which
APEC made possible. APEC and the Early Voluntary Sectoral Liberalisation
initiative (EVSL) showed that multilateral negotiations are as
difficult as bilateral talks. The very norms of EVSL were too
vague, which also exacerbated conflict. There have been frustrations
on both sides of the US-Japan relationship, and multilateralism
has not been the panacea people thought it would be.
For the long-term, however, multilateralism has positive effects.
By having multilateral forums, there will be less bilateral friction
because sometimes you win, sometimes you loose. It seems fairer.
In bilateral relations, both countries always feel they are the
loser.
The second paradox is in the security realm. People predicted
the end of US-Japan security relations, but we have seen the opposite.
Japan has sent destroyers to the Indian Ocean to help US antiterrorism
operations. The demise of the Socialists in Japan and the adaptation
of Ampo, the US-Japan Security Treaty, have accommodated an expansion
of the alliance. The alliance also serves other functions: the
Asian tigers were able to grow, in part, because of the stability
the alliance provided for the region.
There are problems down the road. The first is Japan's economic
weakness. Japanese political leverage has increased in Asia and
Japanese power has grown, while Japan's economy has shrunk. This
cannot continue.
The second potential problem will be China. How will China fit
into the security and economic triangle? A conflict over Taiwan
would force Japan to make tough decisions. The China issue is
very salient in Japan. Japanese farmers are finding the beauty
of the WTO.
Question & Answer
Q: Japan's multilateral approach with the US is only one of the
approaches we are trying. Messrs. Koizumi and Bush are creating
a sub-ministerial partnership. The relationship is broad, so we
need richer paths for communication and conflict management. Conflicts
bring adjustments.
As for antidumping, yes, the US did agree to negotiate on
increased discipline. But antidumping is not a US-Japan issue
only. It is a systemic issue. Before, Japan was catching up, so
there was conflict. Now, Japan is mature; we won't see eight or
nine percent growth rates. Japan is no longer the chaser; rather
Japan is being chased-by China. We should, therefore, see less
trade conflict between the US and Japan.
T.J. Pempel
Policymakers are often fighting the last war. You are right: we
must be more nuanced. Both in Japan and in the US, different government
agencies have different agendas. I am not saying it is a bilateral
issue, but Japan has been the victim of US antidumping measures.
How might China use antidumping?
Q: Yes, China has begun using antidumping and Japan may too
in the future. The biggest victims of antidumping duties have
been Chinese and American companies.
Q: We should remember that Asia is dynamic. When China retaliated
against Japan's measures to protect its tatami and shiitake industries,
there was division within the Chinese government-between the young
bureaucrats who were reluctant to retaliate and the elders who
like to retaliate. So there is another "two Chinas:"
the working-class, internationalized youth and the old China that
says, "I push you because you pushed me first."
Seeing China as a threat is a hot topic these days. But I am
afraid we will loose sight of the real Chinese economy. China
is good not because of its cheap labor, but because it has been
opening its economy for two decades and now we are seeing the
effects.
METI officials are interested in this China-ASEAN FTA, which
came as a surprise. China is thinking strategically now. They
want an early harvest to their negotiations. This episode has
been a real eye-opener for Japan and Japan can learn a lesson.
Ellis Krauss
Indeed, there has been a change in ASEAN. The group is now willing
to accept China without Japan or Korea as balancers.
Q: Why did Japan support an Asian Monetary Fund (AMF)? First,
in this era of globalization, even the US cannot be the last resort
for liquidity. Second, one country alone cannot tackle the movement
of capital. Third, the IMF's quotas for Asia are not in line with
Asian economic power.
The US should use Japan to convey the idea of an international
society. The New Miyazawa Initiative, by the way, was meant to
support Japan's supplementary budget, not to increase Japanese
business influence.
T.J. Pempel
The New Miyazawa Initiative suggested a government role that
recognized mutual interests. But while the Japanese government
saw this as its mission, Japanese companies did not. Maybe if
the Japanese economy picked up, the trend would reverse. The American
and Chinese reactions to an AMF were knee-jerk. The US is not
hostile to ASEAN plus three, but it should do debt swaps that
are compatible with the IMF, so there is not a perception of a
whole new Asian financial system.
Ellis Krauss
Regarding the AMF proposal, there was not enough nemawashi (consensus-building)-not
inside the Japanese government, nor between Japan and China.
Q: Is APEC still relevant?
Ellis Krauss
C. Fred Bergsten says the world may be moving toward three blocs.
I don't agree. The US has not lost interest in APEC-yet. There
were overblown expectations. APEC's three pillars were a way to
satisfy three almost incompatible constituencies. The US president
won't come to APEC to do "trade facilitation," but he
may come to talk about "trade liberalization." Initially,
MOFA was dragged into APEC, but now that ministry is the group's
biggest supporter. The same goes for the US State Department.
Q: What are the criteria for US forum shopping?
T.J. Pempel
Within Washington, DC, there is a continual flux of issues on
people's desks. Domestic political calculations will push a country
to shop for a particular forum.
Ellis Krauss
Officials have efficiency in mind. Multilateral forums can be
far more efficient. The payoffs are also a consideration.
*This text was written by RIETI staff.
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