Seize the Moment (18 page)

—China, a potential economic superpower and a major political player, stands at a crossroads—its people seeking to break with the Communist past but its current leaders unwilling to relinquish their totalitarian control.

—Russia, a declining economic power but a towering military power in the Pacific, has the potential to convert its armed might into a greater presence politically and greater access to the region's capital and technology.

The United States interacts with each of the corners of the Pacific triangle—balancing them off each other, stabilizing them as they compete with each other, and at the same time maintaining a distance of peace between them. As a result, the United States has played the major role in securing peace and stability in the Pacific since 1945, thereby creating the indispensable political foundation for its economic prosperity. But traditional ambitions, geopolitical maneuvering, and colliding interests have created a potentially explosive mix. If the United States remains engaged, it will increase the likelihood that a Pacific century will be a pacific century. Without a major U.S. role, it could become a century of conflict.

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Japan has arrived as a world power, but it is still searching for its proper role. Because of the memories of its aggression and brutal occupation policies during World War II, the key to a wider role remains its links with the United States. Yet at a time when our political cooperation could ease Japan's emergence on the world scene, our economic disagreements threaten to break the relationship apart.

In 1990, a headline in a major U.S. newspaper trumpeted, “Japan Takes Lead Role on World Stage.” The growth of the Japanese economic powerhouse—whose share of world industrial output increased from 2.5 percent in 1913 to 5 percent in 1938 to 10 percent in 1990—fueled the belief that while Japan lost World War II militarily, it would now prevail over its former foes economically. From 1950 to 1973, Japan's real annual growth rate averaged 10 percent, while the size of its GNP rose from one-twentieth of the U.S. economy in 1950 to over one-half in 1991. Japan has become the second-largest economy in the world, the largest creditor, and the second-largest exporter of manufactured goods. Its per capita income of $25,000 in 1991 was highest among major industrial countries. It has the ten largest banks in the world and spends more on capital investment than America. After the United States, it is the second-largest contributor to the IMF and the U.N. budget. In 1991, Japanese capital financed one-third of the U.S. federal budget deficit. According to some estimates, Japan could exceed the United States in absolute economic output early in the next century.

As the only major country with a stable democratic system along the Pacific rim and as our only major regional ally since the signing of the original U.S.-Japan Mutual Security Treaty in 1951, Japan's importance to the United States extends far beyond simple economic cooperation. The potential achievements of a cooperative relationship are enormous. Together
we can use our influence to stem the global tide of protectionism and to keep world markets open. We can also manage refugee flows, curb illegal drug trafficking, and develop programs to address global environmental problems. There is, however, no guarantee of success. Because of our economic tensions, we must renew our relationship or risk losing it.

Since 1945, the United States has dominated its relationship with Japan. Defeated in World War II, occupied until 1952, and dependent on America for security even today, Tokyo played a subordinate role. U.S. officials drafted Japan's constitution, including the clause stipulating that “the Japanese people forever renounce war as a sovereign right of the nation.” The war-renunciation clause became the keystone of Japanese strategic planning and forced Tokyo to depend on the United States for its security.

As the Soviet economy and empire collapsed, the foundation of the U.S.-Japanese relationship began to weaken. Many Americans argued that the United States should no longer foot the bill for Japan's defense, especially because this in effect subsidized Tokyo economically. At the same time, many Japanese believed that their need for the U.S. security guarantee had diminished and therefore they no longer needed to exercise restraint in the economic competition between the two countries. Before the waning of the cold war, security concerns tempered this competition. Now, with those restraints weakened, economic concerns have supplanted security issues.

Some U.S. analysts now look at security problems through an economic lens. They argue that the 1 percent of Japan's GNP spent on defense has been totally inadequate and that the United States should lean on Japan to increase sharply its military budget and to assume more of the burden for its own security. They fail to realize, however, that to insist that
the Japanese develop military forces beyond those necessary to meet the limited goals of territorial self-defense and sealane security is counterproductive strategically and unrealistic politically.

A resurgent Japanese military would cause great regional apprehensions. Historical memories from World War II have not vanished. Despite forty-five years of peaceful policies, the fear in Asia of Japan as a major military power dwarfs European concerns about a united Germany. Any plan for Japan to develop offensive capabilities would meet with strong opposition from Koreans, Chinese, Taiwanese, Malaysians, Filipinos, and Indonesians, all of whom suffered under Japanese occupation during World War II. Instead of enhancing regional security, a Japanese arms buildup would complicate defense cooperation and trigger higher military spending throughout the region.

Internal as well as external fears of Japanese militarism inhibit Japan's defense role. Many Japanese are afraid that the same tendencies that drove Imperial Japan into World War II now lie dormant but could easily be awakened. They fear a replay of the 1930s, when Japan followed up its economic penetration of the region with its military invasion. While they do not believe the Japanese people are innately militaristic, they do fear that a strong military establishment could come to dominate their foreign policy. And they know that their hard-won working relationships with their Asian neighbors would be jeopardized the moment Japan assumed a higher military profile.

Japan's critics overlook the major progress Tokyo has made in providing for its own security. It has increased its support for U.S. forces stationed in Japan to cover 50 percent of their total costs. It has undertaken a sustained military modernization program to develop forces to defend its own territory and to protect one thousand miles of vital sea-lanes.
Moreover, with the size of Japan's economy, the 1 percent of GNP Tokyo allocates to defense approaches in absolute terms the military budgets of Germany, Britain, and France, even though their military establishments receive a higher proportion of their GNPs.

Iraq's invasion of Kuwait in August 1990 presented a classic example of the Japanese dilemma. Tokyo, which imports 70 percent of its oil from Persian Gulf countries, could not mobilize itself politically to make a meaningful contribution to protect its vital interests in Operation Desert Shield/Storm. Despite its $30-billion defense budget and its 250,000-man Self-Defense Forces, Japanese soldiers—who have not gone abroad even as part of a U.N. or multilateral peacekeeping force—never left their barracks. Instead, Tokyo contributed by reluctantly reaching into its wallet.

After sharp criticism of its first offer of a $1-billion contribution in September 1990, Japanese politicians desperately searched for a new policy consistent with international demands and domestic apprehensions. Some proposed a “Peace Cooperation Corps” consisting of troops who would broadly support U.N. goals and work on humanitarian programs but who would remain unarmed and would not participate specifically in the mission of collective self-defense. One legislator demanded that soldiers resign from the Self-Defense Forces before participating in such a corps. When this idea suffered an agonizing death in a prolonged and confused debate in the Japanese Diet, Tokyo offered to toss an additional $l-billion contribution into the pot in December 1990, which most observers derided as paltry. After sustained diplomatic arm-twisting from the United States, Japan finally committed $11 billion in financial support and managed to deploy a small unarmed medical unit and—after the fighting—four minesweepers.

Japan was paralyzed by its debate about what to do, when
to do it, and how much to give. Its factional political system failed to produce a timely decision on an issue that involved its vital interests and that required an immediate response. Tokyo lacked the national will to act when it mattered. When the Japanese did finally act, they did so hesitantly and equivocally, dodging greater responsibilities through legalistic pretexts based on tortured readings of its constitutional provisions. Most significant, the Persian Gulf War demonstrated that Japan simply cannot step up to the military responsibilities inherent in any wider regional role.

Instead of browbeating Japan to increase its military budget, the United States should work toward increasing Tokyo's geopolitical role in five ways:

Enhance cooperative development of defense-related technologies.
The link between Japan's technological advancements and U.S. military development should be strengthened. Both countries would benefit from the integration of Japanese research in lasers, computers, sensors, and space technology into U.S. weapons research. At a minimum, we must prevent rising protectionist sentiments from stifling technological cooperation. At the same time, we should seek to develop major joint projects targeted at high-tech defense requirements, especially SDI-related programs.

Increase Japanese economic aid to strategic countries.
To compensate for its low level of defense spending, Japan should allocate substantially more resources to helping those developing countries in which the West has a strategic stake. Already Tokyo's foreign aid budget of over $15 billion exceeds that of the United States. But Japanese aid policies have been deeply flawed. Since most of its money has been tied to the purchase of Japanese goods, these programs have sought to advance Japan's unilateral economic objectives more than our mutual security interests. As one Southeast Asian official
observed to me in 1985, “When the Japanese provide foreign aid, they are like semiconductors. They take everything in and give nothing in return.”

In addition, Japan's aid has not been channeled sufficiently to strategic countries, such as Egypt or the East European democracies. While Japanese military policies will be debated and possibly changed in the future, Japanese economic strength is a reality today and should be strategically targeted. We should not ask the Japanese to be philanthropists or to flip open their checkbook to fund every faddish idea from Washington. Instead, we should ask that they use their enormous economic power to serve our interests as well as theirs.

Provide funds to facilitate solutions of regional conflicts.
Japan lacks the political muscle to help resolve the world's difficult regional conflicts, such as the Arab-Israeli dispute or the wars in Afghanistan, Cambodia, and Central America. It should stand ready, however, to provide the financial support needed for the internationally supervised elections, multilateral peacekeeping forces, economic compensation, or follow-up aid packages often mandated as part of wider settlements.

Subsidize U.S.-led efforts to develop security arrangements for the Persian Gulf.
In view of Japan's dependence on Persian Gulf oil, it should provide economic assistance to help the United States and other Western powers preposition supplies and develop the infrastructure to guarantee the region's security from Iraq and other potential aggressors. Domestic constraints prevent Japan from taking a more ambitious role. But we are entitled to expect financial support for these collaborative Western security efforts.

Provide economic aid to the democratic republics of the former Soviet Union as part of a comprehensive geopolitical
accommodation.
In stark contrast to the U.S. return of Okinawa to Japan in 1971, Soviet governments refused to return the four Japanese islands seized by Stalin in 1945. With non-communist governments now in power in the newly independent Soviet republics, Japan should be able to negotiate a return of the islands and lay the groundwork for economic aid to reformist former Soviet republics, provided that the new governments adopt viable free-market reforms.

The worst move the United States could make would be to withdraw from its forward bases along the Pacific rim. If we cast aside our security alliance with Japan—which has served as an anchor of stability in the region—Tokyo will confront one nuclear superpower, Moscow, and another aspiring nuclear superpower, Beijing, a few miles off its shores. Without credible U.S. security guarantees, Japan would have two grim options. First, it could develop its own nuclear forces. Second, it could strike a deal—trading economic support for military protection—with either of the other two corners of the Pacific triangle. While Japan would be reluctant to move in either of these directions, it will have little choice if abandoned by the United States.

The greatest threat to the U.S.-Japanese relationship, however, lies not in security disputes but in economic antagonisms. Many Americans decry the specter of the Japanese “buying up America.” The Japanese, they suspect, are turning America into an economic colony. Yet despite their acquisition of highly visible assets—Universal Pictures, Rockefeller Center, and even Michael Jackson's $1-billion contract with Sony—Japanese-owned firms and assets account for only 17 percent of foreign investments in the United States, while those of Great Britain represent 30 percent. Ironically, many who strongly support U.S. investment abroad have xenophobically denounced businessmen who
happen to be Japanese and who simply wish to invest in America.

The trade imbalance between our countries is the crux of the problem. The U.S. trade deficit with Japan was $46 billion in 1985, $55 billion in 1986, $60 billion in 1987, and $65 billion in 1990. The most important causes of the imbalance—exchange rates, budget deficits, economic cycles, varied growth rates, and domestic savings and investment levels—have been lost in the emotional melee of finger-pointing on both sides of the Pacific.