Another Trilateral Commission
Recently, we marked the thirtieth anniversary of a historic diplomatic success in East Asia-the restoration of Sino-American relations. The current world economic crisis merits an attempt at diplomacy of even greater magnitude. Mr. Obama should start flexing his "aggressive" diplomacy by inviting the leaders of China and Japan to join him next month in Hawaii-or any other mutually agreed place-for what would hopefully be the first in an ongoing series of trilateral summits to work out how the three countries will cooperate, both to get out of recession and enhance the stability and security of East Asia. Such a meeting could be a game-changing event.
International coordination of strong national efforts will be essential to surmounting the global economic crisis. Not only must we make the whole of our national stimulus efforts greater than the sum of the parts, but we also need to avoid sliding into trade and industrial policies that could make the crisis far worse. The G-8 and the G-20 are useful vehicles for coordination. However, there are two countries with which the United States must work especially closely-China and Japan. Japan is still the world's second-largest economy and China is probably the third largest and certainly the fastest growing. Politically and economically the three countries dominate East Asia, the most dynamic area of the world; they are all key to preserving peace in the region. Encouragingly, China and Japan have already begun to work together-including a December summit meeting with South Korea focused on expanding central-bank cooperation. Obama has a unique opportunity to both strengthen economic cooperation and enhance prospects for security in East Asia.
The inextricable interdependence of our three economies is now crystal clear. The three are major trading partners with each other. All are suffering substantial declines in growth and need to stimulate their economies. China and Japan hold huge amounts of American debt, and we need them to add to those holdings as we embark on a huge stimulus package. China needs to expand domestic consumption. Both Japan and China need to reduce their reliance on exports. In the longer term, America clearly has to save more. Currencies have to be adjusted and changes to the international financial structure must begin.
Accordingly, coordination of economic policies should be the natural outcome of an acknowledgment of our interdependence. But the three countries are not yet moving adequately in this direction and much needs to be done-now. Without serious coordination and reinforcement of each other's national measures, we will slide down the slippery slope of increasingly nationalist and protectionist economic policies. International coordination of national efforts can help leaders fend off domestic political pressures for unilateral moves toward protectionism. Given that our political relations-especially with China- are now largely defined by our economic relations, nationalism is not only a threat to our financial well-being but also to our security interests.
A "trilateral" meeting among the leaders of the United States, China, and Japan would be unprecedented. For several reasons, including history, this kind of meeting has yet to occur, even at lower official levels. China may well turn it aside. Beijing has been reluctant because the United States and Japan have a defense alliance and it would be the odd man out. Today, however, China is far stronger and its reach greater. Tokyo, now in political turmoil, will likely be receptive but wary because it fears growing Sino-American cooperation could leave Japan out in the cold. Sino-Japanese relations over the past decade have been particularly rocky, and their competition for influence in Southeast Asia compounds the strain. The United States has preferred to deal with both Japan and China on a bilateral plane believing-wrongly in our view-that this somehow maximizes our influence. And yet, American relations with both Japan and China have never been as simultaneously good as they are now. This is an enormous opportunity for American leadership to lay the foundation for trilateral cooperation. How better from a political standpoint to limit dangerous nationalistic tendencies. In this period of collective economic disaster, there's never been more at stake in terms of trilateral cooperation.
Granted, U.S.-Japanese-Chinese cooperation can be only one part of a broader multilateral effort. The G-20 is scheduled to meet in April and policies need to be coordinated on a global scale. Some argue that our new president should meet our traditional European allies first, but these are not usual times. Some Asian countries, such as Korea, won't be thrilled with their exclusion from this kind of meeting either. India, America's favorite rising star, might also construe its exclusion as a snub. Nevertheless, the basic fact is that the ties among China, Japan and America are of exceptional importance. Most countries, particularly in East Asia, will likely be pleased that the three are consulting how to help everyone, as such a meeting could determine whether we all sink deeper or stay afloat.
Analysts have been acknowledging the rise of East Asia. It is hard to say now what the global economic crisis will do for this forecast. But clearly, the global balance of influence will continue to shift and power will continue to diffuse. The sooner we face the shifting global dynamic, the more chance we will have to influence that process and protect American interests in Asia and globally. "Change" is happening-whether it's Obama's version or someone else's will depend in part on how effective he is in engaging the other principal actors who are also driving change.