US alliance growing burdensome for Japan
By Jiao Kun Source: Global Times Published: 2017/2/12
Illustration: Liu Rui/GT
For Prime Minister Shinzo Abe of Japan, having a golf game with a sitting US president must have been one of his dreams. Sixty years ago, Kishi Nobusuke, the then Japanese prime minister and Abe's grandfather, played golf with then US president Dwight Eisenhower during his visit to Washington DC. The game is said to have helped foster a personal bond between the two leaders and eventually molded the framework of a renewed US-Japan alliance - a well-known episode in the political world of Japan that has set an example for later politicians.
Thus, for Abe, who is eager to maintain and strengthen the alliance which has an uncertain future with the election of Donald Trump, the golf game with the latter held Saturday seems to be a dream come true. Together with the official meeting that seems to have gone rather smoothly on the day before, Abe is now perhaps ready to celebrate the success of his visit.
However, while Abe takes the credit, his men may have to take pains negotiating with their US counterparts. The Abe-Trump meeting was merely symbolic, leaving the more concrete affairs to be discussed and determined by other government officials, such as Deputy Prime Minister Taro Aso of Japan and Vice President Mike Pence of the US.
The US side obviously got the upper hand at the summit. Trump affirmed the US commitment to defending Japan, a repeat of what the US government has been saying for decades. He succeeded in striking a deal with Abe to launch talks on economic issues. Historically, the bilateral economic negotiations between the US and Japan were settled with terms that are disadvantageous for the latter. Take the Japan-US textile negotiations in the 1970s, the friction over auto trade between the two countries in the 1980s, and so on - all resulting in Japan giving up some or quite a bit of its interests.
It is hard to predict how the forthcoming rounds of negotiations would end differently for Japan. If the result is different, it could only be that Japan is making more concessions and sacrifices this time. Until now, Trump has made a series of criticism against Japan over trade and currency; his protectionist "America First" doctrine goes contrary to a reciprocal relationship with other economies, especially with a major exporter like Japan.
Also putting Japan at a serious disadvantage is Abe's determination to woo Trump at almost all costs. It is obvious that Abe went to the US with a plan of economic cooperation. Signs show that with this plan, the Abe administration is trying to mobilize all the resources available, public or private, to help beef up the US economy.
Such a stance has already created anxiety or even anger within Japan. According to a recent report by the Financial Times, the Abe administration has been pushing Japanese companies to invest in the US. Abe also personally met with the chief executive of Toyota, who had been criticized by Trump for not investing in America and declared to invest $10 billion in the US after the meeting. The economic communities are worried that rather than trying to explain to the US about Japan's contribution to the US economy, Abe may make pledges to the Trump administration and drive the private companies into meeting the goals set by him.
Regarding the public resources, some Japanese media reported that Abe was considering investing a portion of Japan's government pension fund into US infrastructure. Such an allegation aroused widespread opposition and questioning among the public and in Japan's congress, though Abe denied these reports.
But other forms of public resources could also be used, including "loans from the Japan Bank for International Cooperation or purchases of infrastructure bonds via Japan's foreign exchange reserves," according to the Financial Times report. For a government with extremely heavy financial burden, such bold investments could have severe consequences if things go awry.
No matter private or public resources, no one can be sure that they would be paid back, when the investment decisions are made more out of political needs than pure economic necessity. Moreover, there is also no guarantee that new trade frictions will not rise in the future even if Japan accepts all the US demands at the present time. For Japan, the cost of maintaining the alliance with the US is getting higher and higher.
The obsession that Japans shows with a rather unequal relationship with the US is perplexing. In fact, it has other options, such as strengthening its economic ties with China, which has surpassed the US to become Japan's biggest trade partner. A free-trade framework like the Regional Comprehensive Economic Partnership can also serve as a substitute for the Trans-Pacific Partnership. Instead of pandering to Trump's protectionism, Japan should ponder on pivoting to a totally different economic strategy.
The author is a lecturer at the School of History, Wuhan University.
@ahojunk , @AndrewJin , @DayWalker90 , @oprih , @long_ , @Chinese-Dragon , @Shotgunner51
Interesting that Japan would go such length, sacrificing its national economic interests to boost US economy. Who said there is no free lunch in this world?
By Jiao Kun Source: Global Times Published: 2017/2/12
Illustration: Liu Rui/GT
For Prime Minister Shinzo Abe of Japan, having a golf game with a sitting US president must have been one of his dreams. Sixty years ago, Kishi Nobusuke, the then Japanese prime minister and Abe's grandfather, played golf with then US president Dwight Eisenhower during his visit to Washington DC. The game is said to have helped foster a personal bond between the two leaders and eventually molded the framework of a renewed US-Japan alliance - a well-known episode in the political world of Japan that has set an example for later politicians.
Thus, for Abe, who is eager to maintain and strengthen the alliance which has an uncertain future with the election of Donald Trump, the golf game with the latter held Saturday seems to be a dream come true. Together with the official meeting that seems to have gone rather smoothly on the day before, Abe is now perhaps ready to celebrate the success of his visit.
However, while Abe takes the credit, his men may have to take pains negotiating with their US counterparts. The Abe-Trump meeting was merely symbolic, leaving the more concrete affairs to be discussed and determined by other government officials, such as Deputy Prime Minister Taro Aso of Japan and Vice President Mike Pence of the US.
The US side obviously got the upper hand at the summit. Trump affirmed the US commitment to defending Japan, a repeat of what the US government has been saying for decades. He succeeded in striking a deal with Abe to launch talks on economic issues. Historically, the bilateral economic negotiations between the US and Japan were settled with terms that are disadvantageous for the latter. Take the Japan-US textile negotiations in the 1970s, the friction over auto trade between the two countries in the 1980s, and so on - all resulting in Japan giving up some or quite a bit of its interests.
It is hard to predict how the forthcoming rounds of negotiations would end differently for Japan. If the result is different, it could only be that Japan is making more concessions and sacrifices this time. Until now, Trump has made a series of criticism against Japan over trade and currency; his protectionist "America First" doctrine goes contrary to a reciprocal relationship with other economies, especially with a major exporter like Japan.
Also putting Japan at a serious disadvantage is Abe's determination to woo Trump at almost all costs. It is obvious that Abe went to the US with a plan of economic cooperation. Signs show that with this plan, the Abe administration is trying to mobilize all the resources available, public or private, to help beef up the US economy.
Such a stance has already created anxiety or even anger within Japan. According to a recent report by the Financial Times, the Abe administration has been pushing Japanese companies to invest in the US. Abe also personally met with the chief executive of Toyota, who had been criticized by Trump for not investing in America and declared to invest $10 billion in the US after the meeting. The economic communities are worried that rather than trying to explain to the US about Japan's contribution to the US economy, Abe may make pledges to the Trump administration and drive the private companies into meeting the goals set by him.
Regarding the public resources, some Japanese media reported that Abe was considering investing a portion of Japan's government pension fund into US infrastructure. Such an allegation aroused widespread opposition and questioning among the public and in Japan's congress, though Abe denied these reports.
But other forms of public resources could also be used, including "loans from the Japan Bank for International Cooperation or purchases of infrastructure bonds via Japan's foreign exchange reserves," according to the Financial Times report. For a government with extremely heavy financial burden, such bold investments could have severe consequences if things go awry.
No matter private or public resources, no one can be sure that they would be paid back, when the investment decisions are made more out of political needs than pure economic necessity. Moreover, there is also no guarantee that new trade frictions will not rise in the future even if Japan accepts all the US demands at the present time. For Japan, the cost of maintaining the alliance with the US is getting higher and higher.
The obsession that Japans shows with a rather unequal relationship with the US is perplexing. In fact, it has other options, such as strengthening its economic ties with China, which has surpassed the US to become Japan's biggest trade partner. A free-trade framework like the Regional Comprehensive Economic Partnership can also serve as a substitute for the Trans-Pacific Partnership. Instead of pandering to Trump's protectionism, Japan should ponder on pivoting to a totally different economic strategy.
The author is a lecturer at the School of History, Wuhan University.
@ahojunk , @AndrewJin , @DayWalker90 , @oprih , @long_ , @Chinese-Dragon , @Shotgunner51
Interesting that Japan would go such length, sacrificing its national economic interests to boost US economy. Who said there is no free lunch in this world?

