June 2013

Japan Center for International Exchange

Moving Beyond East Asia’sConfrontational Postures
Hitoshi Tanaka, Senior Fellow, JCIE

Since entering Japan’s Ministry of Foreign Affairs
in 1969, I have witnessed East Asia’s ups and downs
and seen great efforts invested into promoting regional peace and prosperity. The regional stability
born from these efforts has underpinned East Asia’stransformation into an engine of economic dynamism. However, East Asia still faces the grave potential for serious unrest. The shifting balance of regional
power, disagreements on history, territorial disputes,
rising nationalism, and overly domestic-focused governance and different economic systems that are often
at odds with regional cooperation have all coalesced
in a manner that has undermined regional communication channels and exacerbated disagreements.
Many observers hoped that the debut of new leadersin China, Japan, North Korea, and South Korea—
and a fresh electoral mandate for the US president—
would provide an opportunity for a reset in regionalrelations. However, it appears that this chance is being
squandered. To ensure that the five key players in theregion do not miss this rare opportunity, I offer thefollowing recommendations to assist in moving East
Asia beyond its current confrontational postures.

JapanJapan currently faces two key challenges: revitalizing its economy and managing cooperative relations
with its Asian neighbors in the face of rising nationalism. Prime Minister Shinzo Abe was quick to release
his Abenomics plan to revitalize Japan’s economy.
Abenomics consists of three arrows: aggressive monetary policy, flexible fiscal spending, and a packageof structural measures designed to spur long-term
economic growth. The early indications have beenpromising as the yen has depreciated, Japan’s exports
have risen, and stock prices have climbed. However,while some are prematurely declaring a victory for
Abenomics, its long-term success hinges on the third
arrow of economic growth.
To this end, Japan will need to deregulate, nurture
the growth of new industries, and reform inefficient
sectors of the economy. The latter includes liberalizing

sensitive protected sectors such as agriculture. Sucha proposition is certainly controversial given the agriculture lobby’s clout and the traditional reliance ofmany Liberal Democratic Party politicians on farming constituencies. However, it is crucial that Japan
proceed with deregulation and with agricultural liberalization reforms in order to tap into new avenues
for economic growth and contribute to the successful completion of regional trade agreement negotiations such as the Trans-Pacific Partnership (TPP),
the Regional Comprehensive Economic Partnership(RCEP), and the China-Japan-ROK Free Trade
Agreement (FTA). At the same time, trade negotiations can help build momentum for reform insofar asagriculture and other sensitive sectors are includedin the negotiation agenda. And to the extent they canhelp channel international support for economic liberalization, they will give reformists in Japan leverage
to counter domestic resistance. This is surely a toughtask for Prime Minister Abe, who must effectively explain to the Japanese public the high stakes of economic reform and participation in FTAs, which will
shape the future trajectory of the Japanese economy
as a whole for decades to come.
Managing cooperative relations with its Asianneighbors also presents Japan with a formidable
challenge. Abe already raised tensions when he remarked in the Diet that the definition of “aggression”
has not been fully settled within scholarly circles. He
also flip-flopped on whether his government agrees
with the historic 1995 Murayama Statement apologizing for Japan’s wartime actions and the 1993 Kono
Statement recognizing and apologizing for the role of
the Japanese military in forcibly recruiting some of
the comfort women. Moreover, many Japanese Diet
members, including Deputy Prime Minister Taro Aso,
made a trip to the Yasukuni Shrine, which enshrines
Japan’s war dead, including Class-A war criminals.
These acts, coupled with Abe’s well-known desire toamend the Japanese constitution, have prompted antiJapan sentiment to soar, particularly in China andSouth Korea. The Murayama and Kono statements
have been in place as official Japanese government positions for almost two decades and as such bear great
EAST ASIA INSIGHTS

historical significance. Any attempts to amend thesestatements will undoubtedly have substantial negative
consequences for Japan’s regional as well as international relations.
As for Article 9 of the constitution—the so-called“peace clause” forswearing the use of military force—the nature of the regional and international security
environment has changed in the more than half-century since Japan’s constitution was written. Thus there
may be legitimate arguments for making such potential amendments as clarifying the right to engage incollective self-defense, as opposed to just individual
self-defense as allowed under the current interpretation. But at the same time, Japan must also be proudof its postwar history and all that has been accomplished under the current constitution, including
its record of economic growth, its leadership role inproviding official development assistance (ODA), andits efforts to maintain a peaceful posture. Therefore,
potential amendments to Article 9 should maintainits original spirit and be implemented with due sensitivity to Japan’s Asian neighbors, and the nature of
any changes should be rooted in the strategic considerations of liberal internationalism, not nationalism.

North Korea
The ultimate objective of the North Korean regime
appears to be its own survival. Given the woeful condition of its economy and its disparity with the South,
North Korea may have come to the conclusion thatthe only way it can effectively lessen its vulnerability
vis-à-vis the United States, South Korea, and Japan(and even China) is with nuclear weapons. The lackof diplomatic recognition from the United States andJapan, competition with the South for sovereignty
over the entire peninsula, and the inability to forge
an agreement with the United States to convert thecurrent Korean War Armistice Agreement into a permanent peace treaty give North Korea cause for concern about its future survival. Thus in moving toward
any diplomatically negotiated agreement with NorthKorea, building mutual confidence is crucial.
It also should be kept in mind that North Korea
has a unique conception of leadership. State founder
2June 2013

great attention to governance issues, including corruption, standards for the implementation of national
policies by local-level governments, and consolidation of the rule of law; environmental issues, such aspollution, food security, and natural disaster management and prevention; and economic issues, suchas wealth inequality, inflation, and unemployment.
Secondly, with an eye toward the longer term, there
is a need to consider the evolution of China’s political and economic system. Political reforms will likely
become necessary in the future, especially as the increasingly wealthy middle class continues to grow.
Proactive consideration by Chinese leaders of how
citizens can be given channels to legitimately vent
political frustrations can help set the foundation for
long-term internal stability. Moreover, as the structure of the Chinese economy transforms, strategies tocounter the elderly-dependency ratio and to avoid the“middle-income trap” and the hollowing out of theeconomy must also be contemplated well in advance.
So-called core interest issues and external relations also have the capacity to upset the Chinese
Communist Party’s (CCP) political legitimacy. By
defining certain issues as “core” interests (such as
Taiwan and Tibet) and positioning one of the pillars of its legitimacy on its capacity to protect China
from repeating its past “national humiliation” at thehands of foreign powers, the CCP has constrained its
policy options. This, combined with surging nationalism, strong anti-Japan sentiments, and a suspicion offoreign interference (especially by the United States),means that the failure to carefully manage relations
with Japan and the United States could become a risk
factor for the CCP.
The Senkaku Islands issue is a case in point. China
has sent surveillance and patrol ships into the vicinityof the Senkaku Islands in ever-higher numbers to test
Japanese resolve to maintain the status quo of effective
Japanese control. Such increasingly assertive actions
may be symbolic of China’s attitude in the future. Thus
simply conceding to China regarding the Senkakus,
on which Japan has a very clear historical title, willembolden it to repeat such tactics. Instead, the region
must work with China so that it can move away fromKim Il-sung and former leader Kim Jong-il are considered by North Koreans to be individuals of legendary character and ability. Kim Jong-un must
prove himself to be of the same pedigree. This at least
partially explains the extreme rhetoric that has been
emanating out of Pyongyang. Regional policymakers
and leaders should avoid getting entangled by suchverbal bellicosity.
At the same time, we must re-open channels ofcommunication with Pyongyang and convey themessage that diplomatic negotiations and denuclearization, and not nuclear weapons and military provocations, are the best way forward, not just for theregion as a whole but also for North Korea’s future
survival. China’s recent shift in attitude toward North
Korea in the wake of its third nuclear test, including
moves to cut off North Korean banks, is encouraging.
This pressure may help bring North Korea to the tableand persuade it to take negotiations seriously. But before we can consider any major breakthroughs, bilateral negotiations (with North Korea on the one hand
and Japan, South Korea, and the United States on theother) will be needed to lay the groundwork. Only
after the necessary foundations for agreement andrequisite levels of trust are in place can the Six-PartyTalks be meaningfully reconvened. Utilizing the SixParty Talks as a vehicle to supervise implementation
will also be important in seeing that any agreements
are adhered to. It should also be recognized, however,that any bilateral contacts can be utilized by North
Korea for the purpose of undermining the unity ofthe international community. In this context, Japanmust fully explain the recent dispatch to North Koreaof Isao Iijima, a special advisor to Prime Minister
Abe, so that policy coordination and consistency canbe upheld among the states with stakes in the SixParty Talks.

ChinaAs China continues to make its impressive rise, it also
faces many serious challenges including short- andlong-term domestic stability risks, so-called core interest issues, and the management of external relations. Over the short term, China’s leaders must pay
EAST ASIA INSIGHTS

3June 2013

North Korea. Japan, South Korea, and the UnitedStates must be prepared for any possible emergency
scenarios on the Korean Peninsula (including military attacks and collapse of the regime). Thus the coordination of Japan-ROK-US trilateral contingency
planning vis-à-vis North Korea must be bolstered,and adequate Japan-ROK communication channels
must be established to avoid misunderstandings
over the rear support that the Japan Self-Defense
Forces would provide to US troops, especially thosethat would be dispatched from Okinawa. To facilitate such Japan-ROK cooperation, the two countries
must transition toward a mature relationship basedon shared strategic objectives, as would be expectedof two democracies.

its current domestic political dynamic, within which
nationalism is exerting tremendous pressure on foreign policy, and toward a more cooperative posture.
Also, it is imperative that we forge common groundin creating a mutually acceptable rules-based regional
order in which the conduct of all states is based oninternational law. To this end, a necessary first step isthe recognition that issues such as the Senkakus mustnot be allowed to continue to prevent high-level communications and must not be used as the sole reference point of bilateral relationships.

South Korea
Japan–South Korea relations have hit a period of prolonged cooling that began with former ROK President
Lee Myung-bak’s visit to the Takeshima Islets. It waswidely expected in Japan that when President Park
Geun-hye took office, Japan-ROK relations would
cautiously move in a more cooperative direction.
However, such optimism has faded as history questions continue to spoil efforts to re-establish cooperative relations. For instance, President Park alluded toJapan’s history during her speech to the US Congress
on May 8, 2013, stating that there cannot be any tomorrow if we cannot acknowledge what happened
yesterday. And in an interview with the Washington
Post, she lamented Japan’s lack of action on recognizing its history. Under the current circumstances,making such comments in a third country is unhelpful. Such statements merely cater to South Koreannationalists and domestic political agendas and failto recognize the current position of the Japanese government, undoubtedly reflecting the insufficient levelof Japan-ROK bilateral communication. Greater efforts are needed by both sides to revitalize cooperation and to prevent historical disagreements frombecoming obstacles.
The stakes of Japan-ROK cooperation are high.
As the only two economically advanced and industrialized democracies in East Asia, Japan and South
Korea must work together to shape the evolution ofthe region toward stability and prosperity rooted ina liberal rules-based order. Japan-ROK cooperationis also essential to the effectiveness of policy toward
EAST ASIA INSIGHTS

United States
Setting aside the Okinawa issue, there are several
other issues that have the potential to strain US-Japan
relations from the Japanese standpoint, most pertinently the TPP negotiations and the Senkaku Islands.
First, when the prospect of Japan joining the TPP
initially emerged, there was backlash from the US
auto industry, which complained that Japan must
open its auto market to foreign competitors. And now
that Japan will enter the negotiations, such complaints
have been voiced once again. But such concerns areunfounded. The Japanese market is open to foreign
automakers. While the penetration of US vehicles in
the Japanese market is low, this is best explained bymarket competition and Japanese consumer preferences. European automakers have increased theirshare of vehicles sold in Japan by more than 75 percent
since 1995 by catering to preferences for smaller, fuelefficient cars and by cornering the niche luxury market. Although it is well understood that the Obamaadministration must cope with strong opposition in
the US Congress in order to approve Japan’s entry into
the TPP negotiations, getting bogged down in battles
over particular industries and tariffs ultimately ends
up serving protectionist agendas. All countries taking
part in TPP negotiations should focus on forging ahigh-quality 21st-century agreement that furthers regional economic integration through a sophisticated
4June 2013

set of liberal economic rules beyond trade, investment, and services.
Second, regarding the Senkaku Islands, while
Japan welcomes statements by Secretary of StateJohn Kerry and Secretary of Defense Chuck Hagel
that the islands are covered under Article 5 of theUS-Japan Security Treaty and warnings against
China’s unilateral moves to change the existing stateof Japan’s effective control of the islands, there is asense of uneasiness over unhelpful reports disclosing the fact that the State Department “cautioned”Japan over the purchase of the three islands last year.
From the Japanese government’s perspective, there
was no other option than purchasing the islands
given the likely consequences if they had come under former Tokyo Governor Shintaro Ishihara’s control. Moreover, the Japanese government had alreadybeen leasing the islands from a private landownersince 2002 in order to prevent nationalist protestors
from Japan and other countries from landing on theislands. Leasing the islands and purchasing them is
not so fundamentaly different under Japanese law, so
it is farfetched to conceive of this as a provocative act.
Regarding the question of the sovereignty of theislands, the ostensible neutrality of the United Statesis at odds with its own historical actions. After WorldWar II, the Allied nations, including the United States,
determined which territories Japan would be strippedof. But the Senkakus were never included in any suchdeterminations. Additionally, the United States itself

administered the islands after the war until they werereturned to Japan as part of the reversion of Okinawa.
Given its historical involvement and actions indicating recognition of Japan’s sovereignty over theSenkaku Islands, the United States must review its
position on the issue.
◆ ◆ ◆The trend of rising nationalism around the region andthe growing number of quarrels—which are acting as
roadblocks to cooperation and to broader high-levelcommunication—is seriously concerning. This trend
puts East Asia at a critical juncture, and how the region handles the current situation will affect the shapeof the future order, peace, and prosperity for decades
to come. In order to create the kind of stable andprosperous region we envision, the countries in theregion must act together to move away from the current confrontational postures and wholeheartedly toward deeper cooperation based on common groundand investment in a shared and prosperous future. Toachieve this, the key actors in the region must reaffirm
the importance of regional cooperation and must institutionalize the norm of strong, intraregional communication at the highest levels of government.
Hitoshi Tanaka is a senior fellow at JCIE and chairmanof the Institute for International Strategy at the Japan
Research Institute, Ltd. He previously served as Japan’s
deputy minister for foreign affairs.

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June 2013