Appendix 1
JAPAN, MULTILATERALISM AND BILATERALISM:
CONTESTING THE FUTURE SHAPING OF
EAST ASIA’S REGIONAL ORDER
T.J. Pempel (University of California, Berkeley)
The Asia-Pacific is in the midst of reconfiguring its economic and security order.1
This process has been going on with varying degrees of acceleration and deceleration
since bipolarity began to fade, a process which started in the 1970s with the Nixon
visit to China and subsequent moves by President Deng Xiaoping and his reformist
allies to reshape China’s approach both to economic development and to jettisoning
the worst foreign and domestic abuses of the Maoist period. Bipolarity ended mostdramatically in Europe with the collapse of the Berlin Wall in 1989 and the demise of
the Soviet Union in 1991. In the years since, East Asia has been shifting away from anorder previously defined by rigid economic and security isolation and confrontation
between two hostile blocs toward an order characterized by reduced security conflicts
and a spiraling escalation in cross-border economic transactions. The result has been
deeper and more encompassing lines of interdependence across the Asia-Pacific. Yet
within such general outlines, the specific details of the emerging order remain murky
and will be subject to human and state action. As such, any new order will involvethe complex interplay of many competing agendas concerning what an “ideal” orderwould resemble.
To sketch the main outlines of the emerging regional order, however, three corecomponents demonstrate major departures from the previously dominant Cold War
order. The first such change involves diplomacy and hard security. There has been asignificant improvement in positive state interactions with (perhaps until very recently)
a parallel decline in overt military confrontations and reliance on military prowess asa key tool of foreign policy. Nonetheless, while the Cold War has ended in Europe residues of its previous divisions continue to shape state-to-state interactions throughout
the Asia-Pacific, particularly in Northeast Asia. Coercive diplomacy has by no means
vanished. The second change involves economic shifts that ended the stringent ideological barriers previously erected to stymie economic linkages between China andAmerica’s Cold War allies and that have since been marked by extensive cross-bordereconomic interdependence in East Asian trade, investment and finance. Third and finally, an arc spreading over both of these security and economic shifts is represented by
the rapid increase in formalized governmental links that mark new institutional commitments reflecting the enhanced regional interdependence.
1

Evelyn Goh, The Struggle for Order: Hegemony, Hierarchy, and Transition in Post-Cold
War East Asia (Oxford: Oxford University Press, 2013).

33

ENDING BIPOLARITY
Normalization of diplomatic relations between China on the one hand, and theUnited States, Japan and South Korea (ROK), as well as other countries previously on
opposite sides of the bipolar ideological divide, on the other, was the most profoundof East Asia’s shifting tectonic plates. Security tensions among the major actors in
the Asia-Pacific have since diminished giving rise to what some have called “the East
Asian peace,” represented by a sharp decline in battlefield deaths and the absence ofstate-to-state conflict across all of East Asia since 1979 and more narrowly in Northeast Asia since the 1953 termination of the Korean War.2 These and related shifts haveworked to blur East Asia’s previously rigid and mutually hostile security bipolarity bymoving toward a security order based on much more porous and preponderantly harmonious national interactions. In conjunction with improvements in security relations,as noted, the rigidity of bipolar economic separation has also given way to enhanced
cross-border investment, production, and trade that show few remnants of prior ideological motivations.
Etel Solingen underscores these ongoing improvements: Existing disputes
have been restrained as never before in recent history, and major powers have normalized diplomatic relations despite continued tensions. Military modernization has notundermined macroeconomic and regional stability. Military expenditures relative to
GNP have declined from 2.6 percent (1985) to 1.8 percent (2001), lower than world
averages of 5.4 percent (1985) and 2.5 percent (2001), with parallel declines — inmost states — in military expenditures relative to central government expenditures.
Steve Chan (2010) provides detailed country-by-country data showing the same pattern. Timo Kivimäki (2010) also provides compelling support for the relative peace inthe region as does the Uppsala project on East Asian peace.3
Though many of its most acute lines of confrontation have been blurred, particularly as a consequence of cross-border economic and financial integration and thecollective improvement in most countries’ national economic profiles, in contrast to
its termination in Europe the Cold War has hardly vanished in East Asia. This is mostdemonstrable in the area of security relations. The broad East Asian peace, for example,
masks a number of neuralgic security hot potatoes — the divided Korean peninsula; aTaiwan separated from the PRC and devoid of representation in a host of international
institutions and its prior diplomatic relations with the US, Japan and South Korea, as
2 On this see Stein Tonnesson et al., “The East Asia Peace: How it Came About and WhatThreats Lie Ahead,” Global Asia 10, no.4 (Winter 2015).
3

Etel Solingen, “Pax Asiatica versus Bella Levantina: The Foundations of War and Peacein East Asia and the Middle East,” American Political Science Review 101, no.4 (2007):
757. See also, Steve Chan, “An Odd Thing Happened on the Way to Balancing: East
Asian States’ Reactions to China’s Rise,” International Studies Review 12, no.3 (September 2010): 387-412; Timo Kivimäki, “East Asian Relative Peace - Does It Exist? What Is
It?” The Pacific Review 23, no.4 (2010): 503-526.

34

well as a series of maritime disputes still unresolved since World War II, to mention
only the most obvious problem areas. Moreover, although big jumps in military expenditures have not been seen in the budgets of most countries in the region (with theconspicuous exception of China), the years since about 2010 have been pockmarked
by numerous examples of coercive diplomacy and heightened security and diplomatic
tensions.44

DEEPENING INTRA-ASIAN ECONOMIC AND
FINANCIAL INTERDEPENDENCE
The region’s improved security climate following the American defeat in Vietnam was followed by the noteworthy movement of state leaders within the vast majority of governments in Northeast and Southeast Asia (with a few notable exceptions suchas the Democratic People’s Republic of Korea (DPRK) and Myanmar) to prioritize
national economic development as the basis for their domestic legitimacy, simultaneously downplaying the predominance of military prowess and strongman leadership.5
This trend persisted for the first four plus decades since the 1970s as states across theregion followed one another in eschewing the expansion of military muscle as manifestations of national power while shifting political attention and resources to the pursuitof national economic development and improved day-to-day lives for their citizens.
In the apt phrasing, again, of Etel Solingen, East Asia’s rulers “pivoted their politicalsurvival on economic performance, export-led growth, and integration into the global
political economy.”6
Most regimes opted in this shift to pursue national economic development
along lines that differed from US laissez faire or USSR state-ownership while making“economic security” an integral component in their broader goal of ensuring what mostcalled “comprehensive security.” Countries across the region concluded that “security” remains too vital a treasure to be entrusted exclusively to the military. Domestic
security goals and foreign policy aspirations must be kept in balance. “Comprehensive
security,” represented a perspective that acknowledged the value of such things as economic, energy and environmental security, along with security in the face of pandemics, natural disasters and intrastate crime. (Certainly this was true of Japan since its
articulation of a doctrine of “comprehensive security” that was crystalized under the4

Thomas J. Christensen, Worse Than a Monolith: Alliance Politics and Problems of Coercive Diplomacy in Asia (Princeton, NJ: Princeton University Press, 2011).

5

Much of this movement can be attributed to the demonstration effect of the phenomenal
economic success of Japanese development efforts. And for countries in Southeast Asia,
there was an additional impetus coming from the subsequent successes of South Korea,
Taiwan, Hong Kong and Singapore.

6

Solingen, “Pax Asiatica versus Bella Levantina,” 760.

35

administration of Prime Minister Ohira in 1980).
In the process, individual national development projects within most countries
became woven into the rapid expansion and economic success of an exploding numberof regional and global production networks. Multinational companies had learned how
to separate and diversify the locations of their many functions. Increased efficiencies intransportation and communication made it profitable to position design, manufacturing,
wholesaling, and retailing operations in diverse locations chosen for effective and efficient contributions to the bottom lines of individual companies. Fragmented operations
across multiple geographical boundaries followed, ushering in the widespread expansion of truly multinational production networks.7
Western-based companies were hardly alone in developing regional production
models. Spurred by their rapidly rising currencies — stimulated in large measure bydemands from the US and other governments, as well as their search for more direct access to final markets triggered by stronger currencies — Japanese companies as early as
the 1970s and then Korean and Taiwanese companies, as well as some Singaporean andHong Kong companies, by the mid-1980s began to relocate many of their production
facilities abroad, primarily in the countries in Southeast Asia with lower labor costs. In
the process, such corporate moves undercut many of the prior presuppositions behind
the insulated greenhouse models of national development that had been pivotal to theirearly industrial development.88
Intra-East Asian investment has, since then, taken a sharp turn upward, particularly since the mid-1990s, and the cumulative effect has been a substantial increase incross-border production. This in turn has bolstered enhanced intra-Asian trade and a
deeper East Asian interdependence while at the same time reducing the previous East
Asian dependence on exports to the United States. In the 1990s the US was the major
export destination for virtually every country in East Asia. By 2015, intra-Asian trade
represented 56 percent of total Asian trade, a figure close to that of the EU; China had
become the major destination for most Asian exporters while Asian reliance on the US
market declined rapidly with the exception of China. The US was ultimately the export
market for many goods produced and assembled in China while China was a major
7

A considerable literature exists on this subject but one of the earliest and more influential
analyses was Mitchell Bernard and John Ravenhill, “Beyond Product Cycles and Flying
Geese: Regionalization, Hierarchy, and the Industrialization of East Asia,” World Politics
47, no.2 (1995): 171-209.

8

Sven W. Arndt and Henryk Kierzkowski, eds., Fragmentation: New Production Patterns
in the World Economy (Oxford: Oxford University Press, 2001); Dennis Tachiki, “Between Foreign Direct Investment and Regionalism: The Role of Japanese Production Networks,” in Remapping East Asia: The Construction of a Region, ed. T.J. Pempel (Ithaca,
NY: Cornell University Press, 2005), 149-169; Henry Wai-chung Yeung, “Regional Development and the Competitive Dynamics of Global Production Networks: An East Asian
Perspective,” Regional Studies 43, no.3 (2009): 325-351; Yeung, Strategic Coupling: East
Asian Industrial Transformation in the New Global Economy (Ithaca, NY: Cornell University Press, 2016).

36

purchaser of US debt. Interdependence in trade within Northeast Asia more narrowly
has risen in tandem with the broader regional trend, creating an extensive economic interdependence among Japan, China, Taiwan, the ASEAN member states and the ROK
as well as between Northeast and Southeast Asia.9

DEEPENING REGIONAL INSTITUTIONALIZATION
Economic and security organizations established in the wake of World War II
reflected the comprehensive global power of the United States. The United Nations,the International Monetary Fund (IMF), the World Bank (WB) and the General Agreement on Tariffs and Trade (GATT) were but a few of the most prominent economic
and security bodies undergirding the architecture of a US-led agenda.10 Many played
instrumental roles in the economic recovery and the sweeping economic improvements
across much of the world, including in East Asia. Yet, a number, particularly those mostcentral in shaping the regional order in East Asia, were security-focused and as suchbore the indelible fingerprints of the Cold War. Nowhere was this more apparent thanin the network of hub-and-spoke security alliances that linked a number of America’s
allies to US security priorities. Important to remember, similar arrangements tied China
and the USSR to the DPRK and regimes in Central Asia. For three or more decades
the political-economic-security order across the Asia-Pacific was strongly structuredby this matrix of global and regional arrangements and remnants of that order continue
into the present.
The balancing act between economics and security is among the most perplexing difficulties confronting national policymakers. As E.H. Carr noted long ago: “power is indivisible” and “military and economic weapons are just different instruments ofpower.” It is not always clear when to move the ships and when to keep them in port infavor of mustering trade sanctions and when to try both avenues simultaneously. Thereis a long history of governments synchronizing the two spheres as related facets of national power. The US certainly treated both as intimately linked during the Cold War,as “the two halves of the same walnut,” in President Truman’s melding of the Truman
Doctrine and the Marshall Plan in his doctrine of containment.11 At the same time, US
hegemony and the globally oriented neo-liberal institutions that were established “after
9

Avery Goldstein and Edward Mansfield, eds., The Nexus of Economics, Security, and International Relations in East Asia (Stanford: Stanford University Press, 2012). See also,
Goldstein and Mansfield, “When Fighting Ends,” Global Asia 6, no.2 (2011): 8-17; Pempel, ed., Remapping East Asia.

10

G. John Ikenberry, After Victory: Institutions, Strategic Restraint, and the Rebuilding ofOrder After Major Wars (Princeton, NJ: Princeton University Press, 2009).

11

Walter LaFeber, America, Russia and the Cold War 1945-2006 (Boston: McGraw-Hill
Humanities, 2008), Chapter 3.

37

victory” put considerable emphasis on the alleged benefits of globalized markets, deregulation, convertible currencies, free trade, et cetera. These gave American foreign
economic policy its own logic and advocates. Moreover, as will be noted below, muchof East Asia’s collective foreign policy approaches have concentrated far more heavily on enhancing national economic muscle and less on traditional military buildups.
Scholarship as well as bureaucratic organization also often separate economics fromsecurity with the latter emphasizing military hardware, territorial security and the useof force.
During the Cold War, as noted above, economic interactions mirrored lines of
security contestation. Friends traded with friends and little trade or investment managed
to bridge the deep bipolar abyss separating capitalist from communist regimes. Thisprior division has been mitigated by a sweeping array of new institutional arrangementsthat reflect enhanced economic ties on the ground. These illustrate the extent to which
old Cold War bifurcations have been diminishing in finance and economics across East
Asia. The ASEAN plus Three (APT), the East Asia Summit (EAS), the Asian Development Bank (ADB), the Asia-Pacific Economic Cooperation (APEC) Forum, the AsianInfrastructure Investment Bank (AIIB), the New Development Bank (NDB) and a hostof minilateral and multilateral Free Trade Agreements (FTAs) are but a few of the more
prominent manifestations of governmentally-engineered institutions that complement
the pervasive corporate activities to forge the more economically and financially integrated East Asian order that undergirds narratives and norms highlighting “Asia’s rise,”and the “East Asia peace.”
Security arrangements such as the ASEAN Regional Forum (AFR), the ASEAN Defense Ministers Meeting Plus (ADMM +) and the now dormant Six-Party Talks(SPT), along with a number of Track-2 and Track 1.5 bodies (such as NEACD, CSCAP, and the Shangri-la Dialogue) have also been forged to deal with changes in state
power and new security challenges. Yet, despite their potential to reduce state-to-statetensions, these security-oriented institutions have been less numerous and less effective
in weaving cross national networks of cooperation and trust that are in any way comparable to the increasingly dense connections being forged in economics. Cold War walls— real or imagined — remain divisive reminders of the diverging state visions of any
ideal East Asian security order; in the interim powerful vestiges of the old order shape
security relations.
The combined changes in the external security order plus the increased significance of cross-border economic and financial ties posed serious challenges to the deeply institutionalized combination of security and economic institutions, power positions,and policies previously in play. Not only were political and business elites challenged
to reassess longstanding predispositions but the new exogenous conditions quickly filtered into the domestic arena where social groups, political parties, and non-state actors
were provided with a mixture of new challenges and new opportunities.
For most of the 1990s and well into the early 2000s, East Asia generally, andNortheast Asia in particular, were marked by increasing economic interdependence, a38deepening multilateralization, and a reduction in military clashes and threat levels. And
relations of the United States with China, Korea and Japan were all largely positive.
Emblematic of such benignity were China’s formal recognition of the regime in South
Korea; its accession to the World Trade Organization; its “charm offensive” and theofficial projection of a doctrine of “peaceful rise;” economic outreach by South Korea to the DPRK; the Kim-Obuchi meeting promising forward looking ROK-Japaneserelations along with Japanese-Korean cooperation in co-hosting the 2002 World Cup;
generous official aid from Japan to China; new institutions such as APEC, the ASEAN
Regional Forum; the ASEAN plus Three process; the Chiang Mai Initiative and its
multinationalized successor, CMIM; the East Asia Summit; the Six Party Talks; and thecreation of a Trilateral Secretariat among China, Japan and South Korea.
East Asia (and the Asia-Pacific), in these ways has seen an explosion of new
security and economic institutions. These have generally been organized along functional lines rather than combining economic and security goals.12 All were collectively
presumed to be fostering closer state-to-state ties through the socialization of members,
the development of epistemic communities and the regularization of institutionalized
processes to which members would adhere. Regional institutional cooperation, it wasincreasingly assumed, would foster a reduction in security tensions and an ability tokeep collective economic growth moving forward, unimpeded by security challenges.13
But these bodies have enjoyed widely different degrees of success.
At the heart of the difference between them is the fact that most economic
and financial institutions in the region have been able to emphasize cooperation in theinterest of a “common good.” Particularly since the Asian financial crisis of 1997-98
they have emphasized the ways in which East Asian financial and economic interests
are often collectively different from the global interests pressed by the US, the IMF and
the WTO along with the interests of hedge fund operators, currency manipulators andother non-Asians whom many Asian leaders were convinced had been responsible forthe devastation brought to the region’s prior economic development in 1997-98. Suddenly, East Asia had a collective exogenous challenge against which they collectively
sought to securitize the region. That common sense of purpose has given considerable
energy to the financial and economic institutions forged in the wake of the Asian financial crisis.
The states of Northeast Asia have also been moving in many common directions and closer cooperation in the area of finance. China, Japan, Taiwan, the ROK andeven Southeast Asian states such as Vietnam have opted for strategies of expanded foreign reserve holdings in the aftermath of the Asian Financial Crisis, a move that Gregory Chin has labeled “self-insurance’’ and “regional insulation” against the previously
12
13

The East Asian Summit might be offered as a partial exception.
For example, see: Alastair Iain Johnston, “Treating International Institutions as Social
Environments,” International Studies Quarterly 45, no.4 (2001): 487-515; Amitav Acharya, “Ideas, identity, and institution-building: From the ‘ASEAN way’ to the ‘Asia-Pacificway’ ?” The Pacific Review 10, no.3 (1997): 319-346.

39

disruptive forces of global capital and “hot money” that challenged so many economies
across East Asia in 1997-98.14
Such measures are, as noted, predicated on some element of collective cooperation against a (real or imagined) exogenous challenge. That commonality of interest has
been far less in evidence in the area of security where in fact there is no agreed-uponexternal challenger to East Asian security. Virtually all of the security threats perceived
by governments in the Asia-Pacific are endogenous to the region (taking the US as aregional player). The guns in East Asia are aimed, not at potential enemies outside theregion, but at other countries within the region.
Not surprisingly, national governments have not all engaged this embryonic regional order with compatible goals or equal political enthusiasm. Indeed the very thinness of most security arrangements reflects the wariness with which governments havebeen approaching formal institutional cooperation. Moreover, the extent of a country’s commitment to regional multilateral bodies undulates with the shifting climateof regional geopolitics and geo-economics. Again, national commitments to regional
institutions remain primarily instrumental; regional institutions are still seen by mostparticipant countries as means to particularistic national goals rather than as ends inthemselves. Regional institutions continue to be seen as providing opportunities for‘forum shopping’ by governments in pursuit of their discreet national foreign policy
agendas.

JAPAN’S BALANCE OF SECURITY AND ECONOMICS,
BILATERALISM AND REGIONALISM
How has Japan been operating within this changing environment? Japanesepolicymakers have long anchored their country’s foreign policy around one central
pillar — the US-Japan security alliance. That security alliance has brought with it closebilateral ties on a multiplicity of dimensions. Prior to the 1970s and the ebbing of regional bipolarity, Japanese policymakers kept considerations of security and economics
in sync with one another — security and economic ties with the US, few or none with
communist regimes. Meanwhile, bilateralism under America’s hub and spoke system
was the only viable option available to Japan on security even as active participationin such global multinational institutions as the UN, the IMF and the World Bank contributed greatly to postwar Japan’s global rehabilitation and subsequent positioning.
Important to note, during the Cold War, Asia-Pacific or East Asian regional institutions
were all but nonexistent.
Japanese ties to the US were thus robust in both their economic and security dimensions. The military component of the relationship took center stage as US bases in
14

Gregory T. Chin, “Remaking the architecture: the emerging powers, self-insuring and regional insulation,” International Affairs 86, no.3 (2010): 693-715.

40

Japan provided rear base support for American combat missions in both the Korean and
Vietnam wars as well as allowing ongoing demonstrations of the naval predominanceof the US Seventh Fleet. The US nuclear umbrella also bolstered Japanese perceptionsof security in a neighborhood rife with unfriendly nuclear powers (the PRC and theUSSR). Important as these security connections were, the bilateral relationship was
equally welded together by means of economic linkages. US Cold War considerations
underwrote generous one-way access to the US market for the exports of Japan (andother of America’s East Asian allies). Even as late as the mid-1990s, Japan sent roughly
30-35 percent of the nation’s exports to the US while its second largest export market(variously Germany and South Korea) rarely received more than 5-6 percent.15 Japan’s
postwar economic success depended greatly on easy access to the US market.
Political relations across Northeast Asia had been fraught with deep security fissures during the Cold War. However, normalization of ties between Japan and China in
1972 and between China and the US in 1979 put a blunt, if temporary, end to the mutual
animosity, mistrust, and saber-rattling of each toward the other that had followed thecommunist victory in 1949 and the decades of regional bipolarity fostered by the Cold
War. Without glossing over many profound security differences among states sincethen, it is fair to say that regional relations warmed for most of the next three decades.
Japan reembraced its close prewar ties to China offering massive packages of foreign
aid along with investment and trade by Japanese corporations. According to Japan’s
Ministry of Foreign Affairs, from 1979 to early 2016, Japan sent approximately 3.3164
trillion yen in loan aid (yen loans), 157.2 billion yen in grant aid, and 181.7 billion yen
in technical cooperation.16 For the period 2005 to 2012, for example, Japanese FDI to
China ranged between $5 billion and $15 billion per year.17 Equally, and as a consequence of Japanese aid and investment, China soon replaced the US as Japan’s mostsignificant trading partner. These diplomatic and economic improvements ushered in athirty year period of bilateral congeniality that only began to chill around 2010.
The US, like Japan, embraced China’s “peaceful rise,” both predicating theirembrace on the assumption that the country was moving in the direction of becoming
what then Deputy Secretary of State, Robert Zoelick, called “a responsible stakeholder” within the American dominated global and regional order.18 During the early 2000s,
for example, the US supported China’s accession to the World Trade Organization andthe creation of Permanent Normal Trade Relations (PNTR). A growing financial andtrade interdependency across the region was enhanced, as were US-China economic
15

For details see T.J. Pempel, “Trans-Pacific Torii: Japan and the Emerging Asian Regionalism,” in Beyond Japan: The Dynamics of East Asian Regionalism, eds., Peter J. Katzenstein, and Takashi Shiraishi (Ithaca, NY: Cornell University Press, 2006), 47-82.

16

MOFA web site at http://www.mofa.go.jp/policy/oda/region/e_asia/china.

17

http://www.bloomberg.com/news/articles/2016-05-30/southeast-asia-is-winning-more-japanese-investment-than-china.

18

https://www.ncuscr.org/content/robert-zoellicks-responsible-stakeholder-speech41

ties quite specifically. The US also deferred to Chinese leadership in multilateral cooperation efforts to check North Korea’s nuclear program through the Six-Party Talks.
Despite Japan’s deepening economic ties with China, and despite the rise in thenumber and agendas of regional multilateral bodies, Japan’s central foreign policy focus has remained unshakably focused on retaining close ties with the United States.
Thus when it appeared during the late 1980s that the US was toying with a reduction of
its presence in East Asia, Japan along with Australia, took an active role in creating andpromoting APEC and the ARF as institutions that would operate to keep the US deeply
engaged in the region. APEC presented a stark contrast to proposals by some East Asianleaders such as Mahathir Mohanmmed of Malaysia for institutions that would represent“Asia for the Asians.” Japan, in contrast, was insistent that new regional institutions
such as APEC and the ARF represent the “Asia-Pacific,” preventing what US Secretaryof Defense James Baker once called “a line down the middle of the Pacific.” For muchof the 1990s — largely until the Asian Financial Crisis of 1997-98 — both the Japaneseand US governments collaborated actively with other APEC member economies inlaying the groundwork for an interwoven nexus of policies aimed at enhancing regional
economic cooperation.
Japan did much the same with the ARF despite an initial concern that it might
compromise its commitment to the US-Japan security alliance. Although initially greeted with skepticism by the United States and ASEAN, the Japanese proposal gained
traction, including the endorsement of the new Clinton administration in July 1993.
The US ultimately declared that “a multilateral forum for security consultations” wasone of the ten major goals for US policy in the Asia-Pacific region.19 Though scorned
by officials in the Bush Administration, the Obama presidency has seen a consistentengagement and the presence of high level officials in ARF meetings.
Both institutions had to confront diminished credibility, however. The Asian economic crisis diminished APEC’s stature, even though the institution had never claimed
a mandate to deal with problems of finance. Even more damaging was the Bush administration’s actions in the aftermath of 9/11 when it sought to securitize APEC in
its “global war on terror” and to eschew regional bodies in favor of creating ad hoc“coalitions of the willing.” However, Japan drove its own nail into the APEC coffin by
its refusal to collaborate with Early Voluntary Sector Liberalization (EVSL) efforts due
to domestic interest group pressures.20
19

T.J. Pempel, “Japan: Dealing with Global Forces: Multilateralism, Regionalism, Bilateralism,” in Governing the Global Economy: Politics, Institutions and Economic Development, eds., Dag Harald Claes and Carl Henrik Knutsen (London: Routledge, 2005),
213-214. See also Kuniko P. Ashizawa, “Japan, the United States and Multilateral Institution Building in the Asia-Pacific,” in Beyond Bilateralism: U.S.-Japan Relations in the
New Asia-Pacific, eds., Ellis J. Krauss and T.J. Pempel (Stanford: Stanford University
Press, 2004), 248-271.

20

Ellis J. Krauss, “The United States and Japan in APEC’s EVSL Negotiations: Regional
Multilateralism,” in Beyond Bilateralism, eds., Krauss and Pempel, 272-295.

42

If Japan’s engagement with regional institutions was driven heavily by its efforts
to keep the US engaged in Asia, a rupture of sorts occurred during the Asian Financial
Crisis when Japan, in an autonomous effort aimed at assisting the countries in trouble,
proposed a substantial Asian Monetary Fund (AMF) to be 50 percent funded by Japan.
The US, the IMF and China all recoiled at what appeared to be a challenge to the global
financial balance. Yet in the end, the crisis and the stringent IMF conditions imposedon the countries that received its aid packages spurred a widespread conviction acrossmuch of Asia, often led by Japan, that regional financial solutions could serve as analternative and that the global financial architecture should be reconfigured to takegreater account of the growth in financial power of the Asian economies. A series ofmoves toward intra-Asian currency swap arrangements followed with the Chiang Mai
Initiative of 2000, then subsequently expanded and multilateralized as the CMIM. Also
created in large part through Japanese initiatives were two Asian bond markets andeventually the East Asia Summit (EAS). Yet the EAS hardly represented abandonmentof the US by Japan. In its effort to check the rising regional influence of China, particularly in the ASEAN plus Three (APT), Japan pushed for the EAS and its expanded
membership as a body that would dilute the influence of China and other authoritarianregimes with an EAS membership that included Australia, New Zealand and India. And
as is well known, the Obama repositioning eventually led the US also to join the EAS
in 2010.
Within Japan, any enhanced embrace of regional institutions has thus continued
to be counter-balanced by overwhelming efforts to ensure close security relations with
the United States. Hence Bush’s shift away from multilateralism and demands to be“with us or against us” spurred Japanese Prime Minister Koizumi, among other things,
to alter a series of security laws allowing direct Japanese cooperation with US military actions in Afghanistan and Iraq; he forged a New Defense Planning Guidelines
around cooperation with the US; joined with the US in introducing a ballistic missile
system into Japan; centralized Self-Defense Forces command and control operations
and integrated them with US operations; and upgraded the Japanese Defense Agency
to ministerial status. Japan also worked with the US under the Six-Party Talks format
to confront the challenge of North Korea’s nuclear program and entered the US-created
Proliferation Security Initiative (PSI).
Closer bilateral security ties have continued and been expanded as part of the
Obama repositioning. In recent years, China’s rise, the US pivot/rebalance and the assertive behavior of China in the East China Sea and the South China Sea have led to afurther strengthening of defense linkages in the region, particularly between Japan andthe US (but also of many other US allies and security partners). Of particular anxiety
to the current Abe government is Chinese behavior in the Senkaku/Daioyu islands, forwhich the US and Japan have made clear that the US-Japan Security Treaty will be
operative and bring the US to Japan’s defense in the event of any Chinese efforts at a
military takeover. With these radical revisions of its post-war defense posture, Japanis now playing a more active military role and has strengthened its military assistance43

and co-operation with several countries in the region, generally against the interests ofChina.21
Equally promising in tightening US-Japan bilateral connections has been theTrans-Pacific Partnership (TPP). Following years of reluctance in opening certain “sacred” areas of Japan’s domestic market to foreign competition, Prime Minister Abe
finally in 2013 announced his country’s willingness to join TPP negotiations. That decision followed his predecessor, Prime Minister Noda’s announcement at the Asia-Pacific Economic Cooperation (APEC) in 2011 that Japan was “interested” in the TPP
negotiations and almost two years of discussions between the Japanese government
and the other TPP parties on their expectations should Japan join the trade negotiations.
But once in the negotiations, Japan embraced the TPP both as a major cudgel withwhich Abe could bludgeon domestic resisters to deregulation and structural reforms
and also as an economic mechanism by which to strengthen bilateral US-Japan ties.
And certainly for the United States, the inclusion of Japan in TPP negotiations wasseen as a major reinforcement of US regional economic engagement. Multiple delays,
widely attributed to Japanese reluctance to go far enough in agricultural liberalization,
delayed final agreement, as a series of promised deadlines came and went. Yet, a bevy
of enthusiastic statements by trade negotiators followed the LDP electoral victory inDecember 2014 on the assumption that enhanced power for Abe would allow his government to enact powerful steps to make enough concessions to ensure TPP agreement.
Indeed, the TPP was signed by all twelve participants in February 2016 following five
years of tough negotiations and promising to include roughly 40 percent of world trade.
But ironically, now that an agreement has been reached that is being highly touted bya once skeptical Japan, it is the US Congress that has become the major roadblock tomultilateral ratification and implementation.

CONCLUSION
The Asia-Pacific is in the midst of a transformation of its regional economic andsecurity order. For the moment, these two sectors have been evincing very different
levels of cooperation and competition. Economics and finance continue to show an
expanded integration and are increasingly organized though regional multilateral institutions.22 Regional security institutions on the other hand have been far thinner intheir ability to forge common agendas agreed to by large numbers of countries. Instead,
21
22

https://globalasia.org/bbs/board.php?bo_table=articles&wr_id=9090.
I do not wish to discuss here the apparent institutional contestation between the AsianDevelopment Bank (ADB) for example and China’s Asian Infrastructure Investment Bank(AIIB). As of this writing even though Japan and the US have not joined AIIB it is clearthat the ADB and AIIB are joining forces in a number of projects and that early US opposition to AIIB has begun to wane.

44

security relations remain structured in large measure by a deep residue of unresolved
territorial issues, by longstanding alliances, and by increased tensions surrounding
the toxic combination of China’s military expansion, the DPRK’s nuclear and missile
threats and the US repositioning.
Japan has been an active and enthusiastic member of multiple regional institutions, particularly in the economic and finance areas. At the same time it has worked
energetically to keep its close bilateral ties to the US from eroding in any way. To thisend it has bolstered the security links and has negotiated TPP. But the TPP raises a final
point about the emerging order, and one that is of considerable concern to Japanesepolicymakers, namely concerns about the potential staying power and commitment of
the US. How longstanding, they ask, will the Obama repositioning prove to be?
American policymakers articulate a strong intention to remain engaged in Asia.
Yet wars in the Middle East continue to drain the American treasury and the attentions of policymakers. And economic engagement through the Obama administration’s
showcase piece, the Trans-Pacific Partnership, faces the high probability of non-passage by the Senate as well as vocal opposition from both presidential candidates. Furthermore, sustained US engagement now confronts rising American populist demands
for greater budgetary constraint and increased policy and budgetary attention to domestic problems. In addition, the US public — joined by many policymakers — showsa growing reluctance to support overseas military actions after fifteen years of costly
wars in the Middle East and Central Asia. Thus, it may become more difficult for US
policymakers to marry tough regional actions to the best of intentions.
It is worth noting in this regard that Asia has been compelled to deal with earlier
periods of reduced US focus on Asia such as the Nixon Doctrine, President Carter’splans to reduce US troop levels in Korea, and efforts to take advantage of the “peace
dividend” in the early 1990s. US engagement levels may go through ebbs and flows
but in the long term its engagement in the region has remained high. This is likely tocontinue.
At the same time, worries about possible US disengagement remain strong among
Japanese analysts and policymakers. They express their concerns about America’s staying power, especially under a possible Trump administration, a prospect that has worried policymakers across East Asia. Equally worrisome to many Japanese is their belief
that the US is trapped in its relations with China between economic interdependence
and strategic competition. As a result, many Japanese officials worry quietly that theUS, in their eyes, has been too tepid over the past few years in its responses to China’s
military assertiveness, particularly in the East China Sea.
An ongoing concern about abandonment is one with deep roots going back to
the 1950s albeit in slightly different form today. Would the US, in the face of a DPRK
nuclear threat, be willing to risk Los Angeles to save Tokyo? (Such worries extend to
South Korea as well: many there ask whether Japan would be willing to risk Tokyo toaid South Korea from a similar threat). From this perspective it remains likely that Japan, along with other counties in the region, will pursue their own best strategies going45

forward, always less than 100 percent sure of US strategic assurances.
A concluding point on the emerging regional order involves the recognition that
any Asia-Pacific security order will depend on two things: 1) a balance of power; and 2)
an accepted set of norms. At present, the Asia-Pacific has some semblance of a balanceof power but it lacks agreement on a comprehensive set of norms. Regional security
institutions have thus far been unable to develop confidence in even the most basic
agreement on norms of security conduct. As a result what are now most needed acrossthe region are rules that can be commonly accepted by all players. That such a set ofrules could be agreed upon, however, almost surely remains a long way off.

46

JAPAN’S TRADE WITH MAJOR PARTNERS

47