Tokyo’s Awakening on Trump

April 17, 2018 Topic: Security Region: Asia Tags: TokyoShinzo AbetradeAllianceJapan

Tokyo’s Awakening on Trump

Shinzo Abe will clearly be doing damage control during his U.S. visit, careful to make sure that Japan is not sidelined again.

Japan’s Prime Minister Shinzō Abe will visit the United States on April 17–20 for a critical summit meeting with President Donald Trump. During the summit with Trump, Abe will primarily look to coordinate positions on North Korea, especially in light of last month’s sudden announcement that Trump would be interested in meeting North Korean leader Kim Jong-un before the end of May. There has also been a flurry of other diplomatic moves on the Korean Peninsula, including Kim’s trip to Beijing to meet Chinese president Xi Jinping at the end of March, and a planned summit between Kim and South Korean president Moon Jae-in at the end of this month. Abe has been scrambling diplomatic assets following the abrupt move by Trump to make sure that Japanese interests are not side-lined in the event that summit between Kim and Trump actually takes place.

Abe’s visit will also look to soothe simmering concerns on trade after Washington’s decision last month to introduce tariffs on steel and aluminum, while excluding Japan from a list of exempted countries that included most other U.S. allies and partners: Australia, Argentina, Brazil, Canada, Mexico, South Korea and the European Union.

The stakes are high now for Tokyo after the Trump administration has effectively poured additional uncertainty into a seemingly well-managed relationship. Since Trump’s election win in 2016, the management of the U.S.-Japan relationship has been a challenging endeavor for Abe. Trump’s statements during the 2016 presidential elections and his long-standing negative views of Japanese trade practices continue to cause anxiety and unease in Tokyo. Abe has taken it upon himself to avert negative consequences for Japan’s security alliance with Washington by pursuing a dual-track approach: getting close to the Trump administration while simultaneously cultivating separate trade and diplomatic options with like-minded partners such as the EU, Australia and India.

Alliance Management in the Trump Era

Until only a few weeks ago, it looked like Abe’s approach had paid off. However, the White House announcements on trade tariffs and North Korea served as a double shot across the bow that effectively blindsided Tokyo and has raised questions about Abe’s “special relationship” with Trump.

 

Trump’s opening of the door to potential summit with Kim next month effectively blindsided Tokyo. This decision especially stung because it was Abe who stood lockstep with Trump throughout the past year in supporting the “maximum pressure” strategy and cautioning against rewarding Pyongyang or loosening the sanctions regime for nothing in return. Last September, Abe penned an opinion piece in the New York Times—just following Trump’s blunt warning to North Korea at the United Nations General Assembly meeting—stressing the need for such a firm approach: “Considering (North Korea’s) history and its continuing missile launches and nuclear tests, more dialogue with North Korea would be a dead end. . . . Now is the time to exert the utmost pressure on the North.”

Abe felt that he was Trump’s key foreign advisor on the North Korean issue and for a while it appeared as if South Korea’s engagement-favored approach was seen as not plausible by Tokyo or Washington. The fast-moving dynamics on the Korean Peninsula have forced Abe to readjust and now it seems that Japan is also seeking a summit with North Korea following the potential Trump-Kim meeting. One of Japan’s biggest concerns—which Abe will look to address later this month at Mar-a-Lago—is that Trump may look to cut a deal with Kim that would focus primarily on rolling back Pyongyang’s intercontinental ballistic missile program. The concern here is that such a move—which would address some U.S. security interests over the risk of continental United States being vulnerable to North Korean nuclear weapons—may appeal to Trump’s “America First” agenda and desire to leave the summit with a “win.” For Japan, such a narrow approach is unacceptable as it would do nothing to address Japan’s vulnerability to medium and intermediate-range missiles that could be tipped with nuclear warheads.

But while Trump’s sudden push for high-level engagement with the North carries deep risks for Japan, there are also some opportunities. First, Washington’s openness to diplomacy has allowed Japan to renew engagement with the North on the long-standing issue of abductions. During the 1970s and 1980s, seventeen Japanese nationals were allegedly kidnapped off the west coast of Japan and other areas around the world by North Korean agents and brought to live in North Korea. In 2002, after then Prime Minister Junichiro Koizumi visited Pyongyang, five Japanese citizens were returned. North Korea claimed that the remaining suspected abductees were dead, missing, or had never been taken to begin with. Koizumi visited North Korea once more in 2004, but Pyongyang insisted that the issue was closed. Abe, likewise, failed to break the stalemate during his first stint in office, from 2006 to 2007.

Abe has been successful thus far at raising this issue with Trump, who met with the families of the abductees during his trip last year to Japan and also raised the issue during his address at the United Nations General Assembly last year. During his summit with Trump later this month, Abe will surely look to make the best out of the opportunities from the potential U.S.-North Korea meeting and push Trump to raise the issue.

Abe, the Unexpected Champion of Free-Trade Agreements

Trump’s “America First” policy mantra brought matters of trade at the forefront of the U.S. foreign-policy agenda in a way that did not make Abe comfortable. Given Japan’s dependence on military support from the United States, Abe worried Trump would make the security guarantee conditional on favorable trade relations. Japan is the second largest country to run trade deficits with the United States (although the United States has a trade surplus in services with Japan), second only to China. Unlike China, Japan has chosen the United States as its main destination of foreign-direct investment, ranking as its second largest foreign-direct investor. Abe’s government has also been keen to attract U.S. investments in Japan to revitalize the Japanese economy.

Eager to avoid negotiating a bilateral free-trade agreement with the bullish U.S. administration, Abe pushed for the creation of a Joint Economic Dialogue at the level of Vice President Mike Pence and Japanese deputy prime minister Tarō Asō. The joint dialogue has little to show after two meetings to date. The two sides used the first meeting to agree on the structure of the Dialogue, while the second one—which lasted for less than two hours—concluded with broad calls for closer cooperation, and minor concessions on lifting restrictions for U.S. potatoes from Idaho and Japanese persimmons, streamlined testing procedures for U.S. automobiles, and transparency on agricultural designations and specific reimbursement policies. With the United States busy renegotiating the North America Free Trade Agreement and the FTA with South Korea (KORUS), the Economic Dialogue was essentially a face-saving measure.

In parallel to managing these protectionist risks from Washington, Japan has focused its efforts on advancing a global free-trade agenda. Japan’s goal was to produce trade deals that would not only reduce or eliminate tariffs and nontariff barriers among participating countries, but also to introduce progressive measures on labor and environmental provisions, intellectual property rights, etc. As a result, Japan would position itself as a key player in setting global standards for trade relations in the twenty-first century.

The first deal Japan finalized was the Economic Partnership Agreement (EPA) with the EU in December 2017. Equally anxious about the protectionist impulses of the U.S. administration, as well as the prospect of Brexit, the Europeans shared a similar desire to finalize an agreement that had until then been largely overlooked by both sides. This is the biggest trade agreement either side has negotiated, encompassing almost 30 percent of the world’s GDP. It will eventually eliminate almost all tariffs and reduce nontariff barriers between the two sides, and introduce provisions like geographic indicators for agricultural goods that may be directly detrimental to U.S. interests. As Abe told reporters on the day of the EPA announcement, the agreement hails a “new era” for Japan-EU relations.

The second key move for Japan, rattled by the U.S. decision to leave Trans-Pacific Partnership (TPP), was to take the remaining TPP11 out of its comatose state. On March 8, 2018, just hours before Trump announced plans to introduce steel and aluminum tariffs, Japan and the other ten partners signed TPP11, now rebranded the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Japanese officials renegotiated the deal with the no-so-secret hope that the United States would reconsider its decision to leave the original deal. Trump’s remarks at Davos in January 2018 during which he said the United States would “consider negotiating” with the TPP countries “either individually or perhaps as a group” temporarily rekindled the hopes of Japanese diplomats, but few remain optimistic about that prospect today. This remains true despite Trump raising hopes once again this month by instructing his trade team to “reconsider” U.S. entry into the TPP under the right circumstance.

For Japan the EPA with the EU and the CPTPP are at once an expression of economic self-interest, anxiety over the intentions of the U.S. administration, as well as frustration with the failure to reform the World Trade Organization (WTO) system. The “mega-FTA” path could also be a way to push countries like China to behave in a way more consistent with international trade norms. Indeed, the EPA and CPTPP see Japan at the center of a network of trade deals encompassing approximately 40 percent of the world’s GDP. Were the United States to return to TPP—and also to reactivate negotiations of its own mega-FTA with the EU, the Trans-Atlantic Trade and Investment Partnership (TTIP)—then the sheer economic size of this triangle of mega-FTAs would arguably put more pressure on China than any WTO proceedings.

With the KORUS agreement in principle reached late last month, and NAFTA possibly following suit soon, Japan faces a realistic prospect of being forced into a bilateral FTA with the United States despite its best efforts to prevent it. The fact that KORUS is not as draconian as implied by some of U.S. resident’s statements and that the United States is currently engaged in a trade showdown with China over tariffs may do little to alleviate Japan’s worries. Trump’s recent comments that the days when Japan and other countries take advantage of the United States “are over” confirms that he continues to view Japan as an economic archenemy for the U.S. Abe’s wild bet to use his close personal relationship with the U.S. president to advance his country’s economic and security goals is not looking very good at the moment. The silver lining of the current situation is that recent U.S. decisions may make the EU and CPTPP partners even more eager to work with Japan to finalize and adopt their respective mega-trade deals.

Alliance Moving Forward

How are things likely to progress for U.S.-Japan relations? Abe will clearly be doing damage control during his U.S. visit, careful to make sure that Japan is not sidelined again. Despite calm appearances and the cosmetically close personal relationship between Trump and Abe, there has been a growing sense of unease in Tokyo since Trump’s election. The recent decisions on tariffs and North Korea in early March have validated these concerns. However, despite this challenging time in the alliance, the structural conditions and interlinkages based on shared economic and geopolitical interests will likely keep the United States and Japan together. The mercurial U.S. president is no stranger to changing his mind, and the outcome of his summit with the North Korean leader could bring him closer to Abe’s hardline perspective once more.

For Abe, however, the setback is more serious as he continues to fend off internal rivals within his ruling Liberal Democratic Party encouraged by the prime minister’s sinking approval rating related to an expanding graft scandal. Up until this point, Abe’s diplomatic successes and management of security issues—including the U.S.-Japan alliance—had been one of his main selling points. Since the success of Japan’s good standing with the U.S. president seems dependent on a good personal relationship between the two nation’s leaders, a potential new Japanese leader would be a wild card in this delicate process. While not necessarily the most popular politician at home, Abe has by and large been good for his country’s foreign policy. Not only has he provided the stability needed after many years of quick succession of Japanese prime ministers, but under his leadership Japan has taken a more proactive stance in trade and foreign policy, reaching out to likeminded allies in the neighborhood and elsewhere, particularly in Europe.

J. Berkshire Miller is a senior visiting fellow with the Japan Institute of International Affairs, based in Tokyo. He is also a distinguished fellow with the Asia-Pacific Foundation of Canada.

Image: U.S. President Donald Trump greets Japan’s Prime Minister Shinzo Abe during their bilateral meeting at Trump’s Mar-a-Lago estate in Palm Beach, Florida U.S., April 17, 2018. REUTERS/Kevin Lamarque