The U.S.-Japan Alliance: More Important Than Ever
(スクリプト全文掲載)[Dr. Armitage]:
Good morning.
Thank you all for being here. I've got an announcement, first of all, that CSIS wants to put
out. I think you've probably seen a video streaming, in addition to welcoming you to the rollout of
this report. Before we get started I want to let you know that Mike Green and I are your“responsible officers” noted in the safety video that played before we walked in, so please look to
us for direction in case of an emergency and I'll be the guy running out back.
Thanks of course to CSIS for being our landlords here and giving us this great time and I
must say I'm delighted to be in the presence of my colleagues here and what turned out to be ourfourth Armitage-Nye Report. Never did Joe Nye and I think we were going to be seated here again,
doing yet another report. We were finished with that. We were going out the back door of ourreport writing days. But I think it's fair to say that as we started to think about the future, Joe andI, we had a conversation. We decided our future was a little unclear.
It was unclear for several reasons. One is the transactional America First attitude andorientation of this administration. It's the protectionist policies, combined with the questioning
about the value of forward basing and alliances. So, that began to unsettle Joe and I, and this is all
happening at the same time, that there seems to be a spreading of what we call 'authoritarian
capitalism'. And the fact that there are only two Asia experts - Randi Schriver and Matt Pottinger,
who are at high levels in this administration. So there are plenty of reasons for us to have that
unsettled feeling.
So we thought it appropriate to indicate that there is a future for our Alliance, we do want
to demonstrate to the world and to the region that Japan and the United States share values, weshare responsibilities, we share interests. We look at trade and defense alliances, these things that
add to us, that bring value to us, they're not something that makes us seem like chumps on theworld stage. So we've developed ten specific recommendations and they're in four different
baskets: economic, military, technology, cooperation and regional issues.
And we do this not because the eight of us love Japan, I think we all have a great affection
for Japan, for the people and for the nation, but we do it, because we love our country and we feel
this is so much in our interest. Japan is the most capable US ally in the world and Japan is in themost important area of the world, the most important region and we make the point that unless
we're moving forward we're falling behind, because standing still is falling behind. So with that
I'll ask my good friend, distinguished co-chair Dr. Joseph Nye. If you'd like to make a few remarks
and then we're going to work our way down the panel, five minutes max for each of us and then
we'll throw it open to you for Q&A. So Dr. Nye.
[Dr.Nye]:Thank you very much, Rich. It's interesting to start with the title of our report, 'More Important
Than Ever', and the reason that's interesting is that, when Rich and I first started cooperating on
this issue way back in the 90s, a quarter of a century ago, you could see the beginning of the riseof Chinese power. But in terms of the global balance of power, in America's position in theworld and in East Asia, this has continued and it's probably as important a strategic change as
you can see.
1When we designed policy at that time we decided we would try to engage China, but thecritical point was to reaffirm the US-Japan security treaty. And Mike Green and others helped as
we worked on that and I think that meant that we could shape the environment, in which Chinese
power grew, and that's more important than ever, in that sense the title of this is as relevant as
ever. Rich and I did our other three reports basically to show that there was a bipartisan
American support for this, that this was a very broad and deep based national interest and I thinkthat has been borne out over time through many administrations. But there has been concern in
the in the last year or two about whether we are seeing a situation, where the Alliance is called
into question.
There's particularly, president Trump, who is particularly focused on this issue of burdensharing and allies doing their bit and even during the campaign of 2016 raised the question ofwhether we should be involved in this.
I think what's intriguing here is that despite all that, this Alliance is in remarkably good
shape. But it could be in danger, both by the economic friction that we're seeing growing out oftrade wars, and also by failure to realize that in terms of burden-sharing Japan does anextraordinary amount. We have a phrase in the report pointing out that Japan provides about
three-quarters of the costs of American troops in Japan, through host nation support. That is very
impressive. If it's in our interest to be present in East Asia, to manage the rise of Chinese power,
having a significant ally like Japan, that is willing to pay 3/4 of the costs of our forward presence
is more important than ever.
So I would argue before we get into the detailed recommendations in the report, which
we will now hear, about the things we can do to strengthen the report, some of the problems weface, some of the things we do strengthen. So it’s worth remembering the truth that is embodied
in the title of the report – ‘More important than ever’.
[Dr.Armitage]:
Michael Green will give us a next position of regional issues[Mr.Green]Thank you. A number of us who worked on the report with Rich and Joe are going to provide somestrategic context and Zack Cooper will give some of the specific recommendations and I'm goingto say something about the broader balance of power, strategic setting in Asia, before turning toVictor to talk about the Korean Peninsula specifically.
I've been on the Nye-Armitage reports since the first one in 2000 and looking at thestrategic environment, it's interesting to look back at how things have evolved. In 2000, when we
issued the first report, the US was able to operate in the South China Sea with impunity. The East
China Sea saw virtually no Chinese Coast Guard or PLA Navy activity. North Korea had launcheda Taepodong, but the debate about the North Korean threat was more about American commitment
and intentions. There was not a substantial missile threat to Japan like we see today with hundredsof missiles and nuclear weapons. Japan was the second largest economy in the world, the US Air
Force and the Japan Air Self-Defense Forces enjoyed dominance in the tactical air over the region
around Japan.
All of those have changed, the South China Sea is contested, there are regular, almost daily,
if not weekly, Chinese Coast Guard and increasingly PLA Navy activities around the East China
Sea that North Korea threatens, as I said Japan's the number three economy and the PLA Air Force2

is positioned to possibly have more fifth-generation stealth aircraft operating in East China Sea
than the U.S. and Japan have combined, over the next 10 years.
There are some good developments though. In 2000, when we wrote the report it was verymuch a bilateral report. Japan's relationship with Australia was 99% a trading relationship. Since
then, we've had a trilateral and bilateral security relationship between Japan and Australia that'squite advanced, with more to come, but quite advanced. Japan's relationship with India and the
U.S. relationship with India was stuck on the nuclear test. India had conducted tests in 1998. Today
Japan-India relations are on a steady upward trajectory, the Quad has been mobilized, content tobe defined, but on a trilateral basis the US, Japan and India now do more, far more than before.
And maybe most importantly in 2000 the Armitage-Nye report was in some ways a plea orreally a pledge to bipartisan support for the Alliance before a major election, at a time, when there
was debate within both parties, not between the parties and there I think is very robust consensus
in public opinion polls in the Congress and among policy experts about the Alliance.
The balance of power challenges we face have also shifted in some important ways. As Joe
said, the original impulse of the Nye Initiative in the Pentagon and the Armitage-Nye Report was
positioning the US and Japan better to shape China's choices, China's role in Asia. In some ways,
we’re well positioned to do that today because of the relationships we have with Australia andIndia and all the major powers in the region. In some ways, we're worse off because the smaller
powers in Southeast Asia are not as resilient, and need, as Matt will discuss, Chinese infrastructure
help. We're in a much more challenging environment in a second area, I would briefly mention.
You know, we were focused in the earlier reports on shaping Chinese choices, which is, in the
military parlance, ‘Phase Zero’, peacetime. We increasingly have to worry about contingencies
and China's ability to pull off success in military contingencies because of the trends I describedin PLA military capabilities.
So you'll find in our report, we emphasize the strength of the Alliance, but also the need tomove faster in terms of jointness, efficiency, getting more efficiencies from jointness, sharedintelligence, shared capabilities. In part to shore up our ability to shape Chinese choices in Phase
Zero and peacetime, by working with other major powers, but also because we won't be able toencourage China to move in a positive direction, if the PLA can go into Zhongnanhai and say: ‘We
can win in a fight’, and so the military dimension is important not just for contingencies, but
because that's what backstops the peaceful intentions of the Alliance that Joe and I articulated andRich articulated almost twenty years ago.
[Dr.Armitage]:Thank you Dr. Green. I'd like to ask Dr. Victor Cha to give us some context on the peninsula, if
you would.
[Dr.Cha]:Thanks, Rich. So again, it was a pleasure to be part of this report, the second time I've had aprivilege to work on this report.
With regard to Korea, as you all know, since 1969, but even before 1969, when Nixon andSato signed a joint communique that has something called the Korea clause in it, Korea has always
been connected to Japan’s security and the security of the US-Japan Alliance.
Today I think the United States, Japan and South Korea share the goals of diplomatic
resolution of the North Korea issue, as well as the complete verifiable, whatever we call it now,3complete verifiable permanent denuclearization of the Korean Peninsula. But we are clearly
diplomatically moving into uncharted territory. Nuclear threats but also love letters that are being
sent back and forth.
But the threats are very real and, as Mike said, these threats are very real to not just South
Korea, but to the second and third largest economies in the world, the United States and Japan. So
it's important, as we move forward in terms of this uncharted diplomacy, that trilateral cooperationand coordination among the US, Japan and South Korea increase, not decrease, it has kind of
dropped off frankly, quite a bit, over the past couple of years. And this is not just trilateralcoordination for the sake of trilateral coordination, but really trying to align expectations and viewson things like verification and what we seek as the United States and South Korea enter thesenegotiations with North Korea.
It's also important, not only that there be coordination among Washington, Seoul andTokyo, but that there be better coordination between Seoul and Tokyo. The Japan-Korea leg ofthis triangular relationship. If the other two lines are solid lines, this has always been the dottedline and the more that we can do to fill in that dotted line with better information sharing, a better
coordination in terms of our militaries, would be something that would not just be good for Japanand Korea, but would be good for the overall state of both US-Japan and US-South Korea bilateral
Alliance relationships.
Again, even as the diplomacy moves forward, the threats are still very real. From the North
in terms of the ballistic missile, nuclear artillery threats, and for this reason, trilateral coordination
should not just be on diplomacy about what should be the line going into the next set ofnegotiations that are to take place, but it should also be about better trilateral exercising in termsof enhancing nuclear deterrence, extended deterrence, better trilateral coordination on missile
defense, as well as better coordination on counter proliferation of North Korean capabilities.
But I think probably the most important recommendation - going forward, because we don't
know where all this is going to go, but based on what we've seen thus far is that it is incumbent,
indeed, imperative that the Allies agree that as we move forward with negotiations with North
Korea, that we do not prematurely sacrifice any core alliance equities. Which you know, I thinksome would argue, was one of the things that happened in the last meeting, the Singapore Summit,
with this decision to suspend exercises. So, going forward, there are of course, things that we canlook for in terms of verification, of any denuclearization that takes place, but there should be reallyno premature surrendering of core Alliance capabilities, either between the US and Japan, the USROK, or trilaterally.
[Dr.Armitage]:Thank you, Dr. Cha. I've asked Dr. Sheila Smith to make some comments about the politics inboth Japan and here. So, Sheila.
[Dr.Smith]:
Kevin's helping me with my microphone, thank you. I'm delighted to be here, this is my first time
to participate and in five minutes I'll tell you all about the politics that surround this relationship.
Now to be serious here, obviously, how our citizens view the value of this alliance is thefoundational piece of the puzzle and we have had some unsettling politics in Japan over the last
decade, as well as here in the United States. And we, I would say, both of our democracies havequestions about some of the principles of our Alliance, they have questioned the way we
implement alliance cooperation, but I have pretty strong faith that we have the ability to speak to4new leaders, to speak to those who don't have expertise in the region, to advocate on behalf of thispartnership, which I think we all here believe in strongly.
The DPJ came into power in 2009 and many of you were here and know it rattled
Washington pretty significantly. Now we are seeing the same kind of reaction in Tokyo to ourpresidential election. Some of my friends said to me: ‘Japan is never in American politics, Japan
has never discussed any more. Does this mean Japan is not important to the United States?’ Well,in 2016 our Alliance with Japan was back in the spotlight in a rather uncomfortable way, but I
think since we have the new administration events have largely shaped public perceptions of thevalue of this partnership. Again, North Korea, the behavior also of China, both in the economic
and strategic realm have shaped American perceptions of how important these Alliances are to our
security and our well-being.
The Chicago Council just put out a poll, just this week in fact, and it is the highest numberof Americans who have responded that the United States should be engaged in world affairs, since
they began polling in the mid-1970s. So I think, just to reassure you here, I think our public has avery high regard both for Japan, but also for our Alliance with Japan and our Alliances more
broadly.
I think when we were having this discussion that led to the report, which I hope you will
read more carefully, we all understood that one of the pieces of the puzzle that has bothered us is
the lack of the emphasis of our shared values, the lack of the emphasis of the foundational aspectsof our democracy, rule of law, our commitment to the global institutions that we have led, Japanand the United States, over the last half century or more, but also that basically inform ourcollaboration across the Asia Pacific and indeed across the globe. And I think that's one of thepieces of the puzzle that we want to emphasize in this report. that regardless of how our elections
may go, one year or the next, that this partnership is based on profound belief in some of theunderpinnings of democracy and the rule of law.
I think the regard that many of us around the region and around the globe have for Prime
Minister Abe, in fact has been based on his continued behavior on the global stage as well as in
the Asia Pacific to make sure that these shared values continue to be at the forefront of the way wewould look at the world, but also the way we define our partnership.
Let me just say a couple comments about elections, we have had a couple in Japan, we areabout to have a big one here in the United States. In Japan, the LDP leadership election, the LDP
voted for continuity and stability. Prime Minister Abe now, will probably be the longest-serving
Japanese Prime Minister in post-war history, he obviously continues to make the Japanese people
feel that the Japanese foreign policy is one of the primary movers of their future security andstability.
In Okinawa too, however, voters also opted for continuity. The death of a governor in
Okinawa, Mr. Onaga, created a special election, the All-Okinawa Social Movement candidate, his
successor in some ways, was voted into office overwhelmingly on September 30th. So again, I
think our Alliance has to take care that we understand the sentiments in Okinawa and that we
continue to work on this particular focal point for our relationship.
We are going to have a midterm election in November, I don't think anybody in theaudience doesn't know that fact. It is not necessarily a referendum on our foreign policy, least of
all our relationship with Japan, but I do think it will be a referendum by the American people andthe ideas and the decisions that have been made by President Trump. I think it's a complex time in5

our politics, I wouldn't want to try to predict the outcome here or even to tell you how the outcome
might shape the Alliance, but I think it's important and in efforts like this that we continue to makesure that this conversation about the value of our partnership with Japan continues to be part of theway that the American people understand the decision-making here in Washington.
We have in the polling, I've noted earlier, a a pretty broad consensus in this country that
we must remain engaged in the world, we have in the Pew poll that was released and discussed
here yesterday I believe, also a suggestion that the Japanese people are increasingly worried about
our long term commitment and our long term influence in the region, although they
overwhelmingly support the Japanese partnership with the United States. So these elections matter,these efforts to speak more broadly to the American people and to the Japanese people about thevalue of our partnership also matter. And so, I'm delighted to be part of this effort. Thank you,Rich.
[Dr.Armitage]:Thank you very much, Dr. Smith. With the first and third largest economies in the world, it's clearthat economics and finance have to take a big spot in our report, so we've decided to have two
experts do the heavy lifting, so I'll ask Kevin Nealer, first of all, to start and then we'll go on to
Matt Goodman. Kevin.
[Mr.Nealer]:Thanks so much and thank you, Dr. Nye for your leadership once again and Dr.Cooper, for thediscipline he brought to this whole process and exercise without which it would not be possible.
Those of us, who had the privilege of participating since 2000 in the incipient stage of thisreport on the economic and trade policy side, I think we've achieved a kind of rough justice andappropriate modesty about our role and the role of those themes. We get that security diplomacy
are the bones and muscle of the relationship, but Matt and I, I think are prideful that economics
and the financial architecture is the skin that covers it and that presents the face to the world thateverybody in Asia and indeed globally sees of US-Japan relationship on a day-to-day basis. It's
sustained by American corporations, Japanese corporations and again by the financial architecturethat we share and have put together as a matter of self-interest.
Among the things that everybody knows is that we both lost ground to China's ambitionsin the region. I'd remind you that the United States invests roughly three times in Southeast Asia
what China does, Japan has a similar lead. And so, we set out to look at, as Sheila just said, lookat some of the advantages, to assess them and see what they mean for our shared interest inadvancing those interests, mindful of the fact that we've been chasing by the loss of two
foundational pieces of energy in the trade liberalization processes, both the Doha Round and the
TPP. So what comes next, how should we think about amplifying our interest and, protectively,
how should we think about making sure that we prepare for the inevitable next crisis?
We're looking at unacceptable mountains of debt in both countries, that's a risk we shareand we've actually seen trade growth level off in the last couple of months, which is, I’ll need Matt
to explain that, I can't, but I just posed you the question. What a different world it would have been
if the US and Japan weren't playing the role that they played in 1987 and again in 2008 to put afloor underneath risk in the world markets. So with that as a predicate and, I should be very clear,
Matt provided the intellectual leadership for this effort and a lot of and a lot of the language, soover to you, Rich.
[Dr.Armitage]:6

Matt.
[Mr.Goodman]:Thanks. Thank you. Honored to be part of this, my first time actually participating in this, although
I've been an avid reader of it for the last 18 years, so delighted to be part of it now.
I was told that my role was to explain what Kevin really meant, so. But seriously, I justwant to make two points.
One. Economics is at the heart of the US-Japan Alliance. I have a little parlor game that I
play with my National Security-oriented friends and ask them: ‘What does Article 2 of the USJapan Security Treaty talk about?’ and most of them think it has to do with military affairs or peace
related issues and in fact, it's about economics. In addition to talking about strengthening free
institutions, it says: ‘The parties will seek to eliminate conflict in their international economic
policies and will encourage economic collaboration between them’. So that's Article 2, not Article
22. So it's very much at the heart of what we're supposed to be working together on and both of
those points, eliminating conflict and working together in collaboration is really what has inspired
our work here and what we've said in the report.
So I think it's significant, the very first recommendation I want to steal, Zach's thunder,
because he's going to go through the specific recommendations, but the very first recommendation
is about economics and it's really about this point that we need to, in fact, the headline is, we needto recommit to an open trade and investment regime and I think that's really fundamental to making
the Alliance strong and on the back of that, we have other specific ideas but really what they're
about is extending our shared interests, values and our complementary skills in the now-named
Indo-Pacific region in particular, on economic rulemaking and norm setting and standard setting.
And so, a lot of our recommendations have to do first and foremost with finding a way
back to, for the United States, back to TPP. That's not going to happen in the short term, but I thinkgetting back to TPP is a critical issue. In the meantime, Japan can work to advance theunpronounceable new version of TPP, the Comprehensive Partnership, which was a showed
leadership in actually producing and getting other partners to sign on to. So there's a lot of work
to be done bilaterally, regionally, through APEC, with other partners like Australia and Korea, andglobally through institutions, like the G20 and the WTO and other organizations, where we areimportant, critical players.
And we talk about really the core substantive issues that we think we have particular stakein, together, and those relate to things like the digital economy and establishing the rules andstandards in that space is critically important to both countries, in disciplines on state-owned
enterprises and the role of the state in the marketplace is another critical interest for us, intellectual
property standards, market opening. These are all things that we have aligned views on and weshould be working more actively together to advance those things through all of those different
forums.
Then, on infrastructure, we have a separate recommendation, this is obviously something
where both the United States and Japan have a strong interest in - promoting high quality
infrastructure across the Indo-Pacific region and beyond and so we have thoughts on that as well.
Bottom line: though I think we need to avoid distractions like trade frictions that are notbased on true underlying interests and certainly not on false relations to national security issues,
which a lot of these issues have been linked to, and so we need to move on, away from those issues
7towards actually working together cooperatively in third countries on Economic Cooperation as
Article 2 mandates. Thanks.
[Dr.Armitage]:Thank you, Matt. Can I ask Dr. Zack Cooper to give us an exposé of the recommendations that wehave in our report, very briefly. You can read about them, but I think a little explanation from Zack
will be extraordinarily helpful.
[Dr.Cooper]:Great, I'll be as quick as possible. At first, I want to just say that I appreciate so much theopportunity to be in this group of mentors and role models, it's fantastic to get to work with people
such as those on this stage, and many of these recommendations come from people not only on
the stage, but also some in the audience and others who have worked on the Alliance over many
years.
In the pursuit of an ambitious agenda for the Alliance, we prioritized three imperatives andyou can see these in the report. The first is strategic effectiveness, particularly in terms of
warfighting and deterrence capabilities. The second is long-term political sustainability, and thethird is resource efficiency, because we know that just spending more isn't enough, we have tospend smartly. And with that in mind we came up with four broad buckets of ideas and ten specificrecommendations, which you can read about in the report. And they seek to strengthen bilateral
economic ties, to deepen operational coordination, to advance joint technology development andto expand cooperation with regional partners. So I'll walk through just each one of those briefly
and you can see much more detail on the report. I'm sure it'll come up in the Q&A as well.
So first, as Matt mentioned, to strengthen bilateral economic ties, we recommend that the
Allies recommit to an open trade and investment regime, and in particular, we suggest that the two
governments establish a business and government dialogue, bringing together American andJapanese CEOs with senior officials from both capitals to set a practical agenda, to address
remaining structural issues between the two economies. In addition, to deepen operational
cooperation, we recommend that the Allies operate from combined bases. This is something that's
been talked about in previous reports and we believe that this would minimize the impact on hostpopulations, whilst maximizing deterrence and warfighting capabilities.
We also recommend that the United States establish a standing Combined Joint Task Force,
which would focus primarily on the Western Pacific, and it would decrease the burden that's
currently on the Commander of the Indo-Pacific Command, and it would help give Japanesecommanders more clear lines for them to exchange information and operational details with theircounterparts.
We also recommend that Japan should create a Joint Operations Command and this would
decrease the burden on the Japanese Self-Defense Forces’ Chief of Staff and help its commanders
to better manage crises and the strain of increasingly high-tempo operations.
And then, finally, within the deepening operational coordination bucket, we recommendthat the Allies conduct combined contingency planning to respond quickly to acts of aggression
by improving the speed and coordination of allied decision-making.
In our third bucket, to advance joint technology development, we recommend that the
Allies build on the success of SM-3 block IIA by co-developing defense equipment. Potentially in8areas, such as advanced radars, anti-ship missiles, maritime domain awareness, undersea systems,
future surface combatants and amphibious vehicles.
We also recommend that the allies should expand high technology cooperation, particularly
by working more closely on intelligence-sharing, cyberspace and artificial intelligence, whichshould help both of our countries to lead eventually towards the world, in which we could imagine
Japan being included in the Five Eyes intelligence sharing arrangement. And then, finally, toexpand cooperation with regional partners, we have three recommendations.
First, we recommend that the Allies reinvigorate the trilateral security cooperation andVictor talked about this in some detail. We focus in particular on information sharing and theservicing of military equipment across all three countries, but also that we should look to expand
trilateral exercises, where that's possible.
We also recommend that the Allies should work together to launch a regional infrastructure
fund, to provide investment options that emphasize high standards, employment of local labor,social and environmental safeguards, open procurement practices and reliable returns on
investment.
And our final recommendation is that we forge a broader regional economic strategy byleveraging existing leadership in trade, investment, development and financial services to enhancerules on things like digital commerce, state enterprises and intellectual property protections. So
that's a very quick overview, but we think that put together, this isn't certainly an ambitious agendathat will take a certain amount of time, but we think it's necessary to prepare the Alliance for thechallenges that it will face in the years ahead.
[Dr.Armitage]:Thank you, Dr.Cooper. Now hitting cleanup. We have on a second Nye- Armitage report to Kara
Bue.
[Ms.Bue]:Thank you. What Zack just outlined is a tall order by any standard and as with most things,
however, real change happens in a step-by-step process. So, in that vein, we wanted to highlightsome potential specific next steps that should be considered.
The first has to do with, as Japan moves forward with its Mid-Term Defense Program andits National Defense Program Guidelines, we encourage the US and Japan to coordinate closely
during the process as a means to improve our joint ability to fight and defend. In connection with
our recommendation on combined bases, we suggest that the US and Japan should study thelessons from existing combined bases, such as Misawa, to identify and learn how to overcome
legal, operational and cultural challenges. To expand high technology cooperation, we encourage
Pentagon acquisition officials, including officials at DARPA, to work with Japan to quickly
identify a new project or even set of projects for joint development and acquisition.
With regard to bilateral contingency planning, we encourage elevating the level andexpanding the number of Japanese officers from the Self-Defense Forces, embedded withinrelevant US units, including the planning staff at the Indo-Pacific Command. And finally, while
many of our recommendations require action from the US and Japanese governments, the onus ofAlliance maintenance does not fall only on them. The private sector also has an important role toplay and we encourage its full consideration of the recommendations raised in the report,
particularly with regard to strengthening bilateral economic ties and joint technology development.
9

As an example of how the private sector can work together to better the Alliance, one of therecommendations in the report that Zack outlined, had to do with a business government dialogue
and we'd encourage the US and Japan to move forward on that score. So with those specific ideas
I'd like to shift the discussion back to ambassador Armitage and Dr. Nye and then to the audience
for any questions.
[Dr.Armitage]:Thank you very much, Kara, two final comments and then we'll turn it over to you. First, I wantto acknowledge that we have here today our good friend, my good friend, best career ambassador
we've ever had as a nation, Marc Grossman, who's here and I welcome you, Marc, and thank youvery much for your presence here. I think you by your presence bestow on the US-Japan
relationship an idea of the importance of that relationship force, so thank you.
Look, we're not naïve, we're not foolish, we know what we've done with theserecommendations. These are hard, these are farsighted. Some are just aspirational right now, likethe adding to Five Eyes and having Japan, that will be Six Eyes. It means Japan has to do a lot
more. What they've already done in the protection of their technology. But we are about todetermine as far as we can make humanly possible to push the boundaries. Look, in our Defense
Department, except for the two officials Pottinger and Schriver, whom I’ve mentioned, we don't
have officers, who have served their careers in Asia, like we had in the past. We have officers,
who know a lot about the Middle East, about Afghanistan, about Iraq, about Syria, but they've notserved in Asia. So this is why we’ve made it so bold - to give them what we think is kind of afarsighted outline, realizing that they're going to have to really stretch themselves and our Japaneseallies are going to have to really stretch themselves to reach these. But if we do, we'll be muchbetter able to do, as Joseph and Mike suggests, to deter, and to shape, but if necessary to fight, toprotect our interests, so I'm going to turn it over to you. As usual, we'll have folks with microphones,
I think. And there's first and I'll feel the questions and sort them out to our staff.
[Intel Analyst]:
I'm Peter Humphrey [phonetic], Intel analyst and a former diplomat. I see nothing that would stop
China from loading up an expeditionary force with 50 barges, full of concrete, going out to the
Senkakus and creating a base by next weekend. And I don't see under any circumstances the UnitedStates is going to war to defend Japan's ownership of those islands. So this, you know, this, we
keep ignoring this, but what's the bottom line here, when Japan goes by itself to defend its territory
calls the US and then the US says: ‘I don't think so’.
[Dr.Armitage]Thank you. Dr. Green.
[Dr. Green]:
It's a more complicated problem today than it was three years ago, the East China Sea will be more
complicated three years from now, but I see a lot of things that stop the PLA from loading up
barges, starting with the Seventh Fleet, the Maritime Self-Defense Forces and the geopolitical andeconomic consequences to China of taking on the 1st and 3rd largest economies in the world, at atime, when China has no shortage of internal challenges of its own. So I think the cost to China
would be enormous and that will be the case for a long time and if there's any doubt about US
intentions, the fact that every administration since Bill Clinton, including President Obama himself,
has stated that Article 5 of our Treaty applies to the Senkakus, that's a pretty clear message. That's
why I think, you see, China maintaining a high level of operations but careful, and where Beijing
is probing more is in the sort of soft underbelly of the first island chain, which is in the South
10

China Sea, that's where I'd be more worried. But I think in the East China Sea, there's a pretty
robust series of military, political and economic obstacles to Chinese ambitions.
[Dr.Armitage]:Thank you, Mike. Could you identify yourself? We've got one down front. Please, lady.
[Audience member]:Thank you very much for an informative forum. China's power play in Asia. They've chosen the
One Belt One Road as one of their major vehicles for international viability and visibility, and anumber of us believe, in the West and the South Asia and Europe, that these are the trade that's
going to lead to country dependence, then that means that China is going to move to protect theirinvestments and invariably leading to expansion in their influence and domestic policies, related
to these countries. And then eventually an increase in the presence in those particular countries.
How do we restrict Chinese imperialism, if we will, and promote economic and international
development in the world by US-Japan Alliances.
[Dr.Nye]:
One has to be careful to take One Belt One Road and separate the advertising function and theslogan from the reality. When you look at One Belt One Road, people sometimes say it's like theMarshall Plan: trillion dollars of investment, and so forth. That's nonsense. The Marshall Plan infact had the Europeans come together on a coherent program and the Chinese don't want that atall. The Marshall Plan was grants. Chinese program is loans. The net effect of this is you have ahodgepodge of different projects, which lead to indebtedness on the number of countries, whichleads to local reactions. Look at Sri Lanka, look at the airport where nobody flies in, the port where
nobody sends ships. This has created a reaction, You're even getting a reaction from Pakistan aswell. So you have to, you have to separate the sloganeering of One Belt One Road from the reality.
Will China have influence through spending money on infrastructure in a lot of countries,
not just in the Belt Road countries? Yes. Can we do something about that? Yes, we can expose
what it is and second, as we recommend in the report, the more we, the US-Japan and allies,
provide help with infrastructure in these countries, the more you can provide an alternative. So,
my first point is that discount One Belt One Road for all the hot air that's in it and you'll find there's
a lot less there than meets the eye.

[Dr.Armitage]:
Matt did you want to revise and extend your remarks.
[Mr.Goodman]:
Sure. Joe has said it well and I would just say, I think that’s a big misunderstanding about Belt andRoad is that Xi Jinping put this banner, this headline on top of something that was really a bottomup phenomenon of Chinese state-owned enterprises and construction and steel and concrete andthings that needed outlets for their excess capacity and so they were pushing projects and trying to
get funding from Beijing, from the China Development Bank and China Export Import Bank andgoing out and doing these projects really initially for that reason. And I think Xi Jinping saw anopportunity to brand this as something that was a big Chinese contribution to the world, to create
a community of common destiny, I think that is the slogan that's attached to it.
What was missing was in between - a lot of coordination and you know, real planning, as
Joe implied. And they've gotten themselves into some real problems in terms of projects that aren't
generating return and they say they want to get a return on their investments that are creating these11various forms of blowback. And so, it's going to be a lot smaller and more troubled. Infrastructure
investments are difficult everywhere, if you've rode the metro to get here, I think you have someunderstanding of that. But imagine, in that part of the world, how much additionally difficult it is.
So it's a tough business.
But you know, China's going to continue doing it, it's a legacy item for Xi Jinping and I
think they will continue to do it and we have to have a response and pushing back and stoppingthem is not going to be the answer, because the recipient countries want infrastructure. But we canbring things to the table. We bring great companies with great products and services that areembedded in that, the rule of law and we bring capacity, training, we bring high standards of socialand environmental safeguards, debt sustainability, approaches and norms, open procurement
practices and various organizations that we lead and drive that promote those things. So I think
there's a lot we can bring to the table and if we can liberate pension monies and insurance monies
that are looking for long-term investments, that'll far trump what China is doing in terms of, youknow, the supposed trillion dollars.
[Dr.Armitage]:
Your question has provoked quite a response. Kevin, do you want to pile on?
[Mr.Nealer]:I do, but I'm mindful of our time. Thank you for the question. With just two quick footnotes to Joe
and Matt's views. One is that the country that is reacting very badly to a lot of the packaging ofand where antibodies are being generated to Belt and Road notions is China. This is a country
where in no major city can you drink the water from the tap. You might be surprised to know
Chinese citizens have noticed this. So and not completely unknown in our political culture, there's
starting to be in the netizens world a real conversation about what if you want to improve thequality of life. I can't breathe the air, I can't drink the water and so forth. Those of you who dowork and travel there a lot know exactly what this is about.
The other thing is, as our firm does a lot of deal-based work in emerging markets and I've
got to tell you, the list that Matt just ran through, it's tempting in the policy community to say:
‘Yeah, there's all that financial architecture stuff”, that matters enormously, as does branding,predictability and those notions like rule of law, to whether or not you can get a deal done. And tohow, Rich and I were just out in Indonesia together, to how people perceive Japanese andAmerican companies and what they bring to the game. It would be a serious mistake as a practicalmatter to undervalue that.
[Dr.Armitage]:
Right here, second row, please. We've got time, we'll get to you. Would you identify yourself
please?
[Audience Member]:Good morning, my name is Gerald Han [phonetic]. I've come from Boston, of New England. Uncle
Sam has always been dispassionate about anything, about foreign policy, about public affairs,
domestic policy, until the Japanese attacked Pearl Harbor and then we know we got Hiroshima
and Nagasaki. When General MacArthur laid down the peaceful Constitution for Japan, he
preserved the Emperor so that they can continue to worship the Emperor and build their Japanesesociety as is and not as in the past. So finally what happened was, now at this time, Premier Shinzo
Abe has got what we called the Rearmament Acts of the Japanese Diet or Parliament. Strangely
but paradoxically, in Okinawa we have an Uncle Sam marine son, who ran for election andfollowing a page of speaker Tip O'Neill: ‘All politics is local’, he won the election. He won the12election in Okinawa Island on a single principle: ‘Remove the military base! Remove Uncle Sam's
military base!’ So my question is, would all of this position, Shinzo Abe's position and this young
marine sons’ position, would it enhance the Alliance between the USA and Japan in relationshipwith the ASEAN countries, who suffered terribly during the Japanese war?
[Dr.Armitage]:Thank you, thank you. The troop presence in Okinawa has been difficult for a long time now.
More broadly, in Japan our troops are fairly welcomed. If you look carefully at therecommendations we have, we are looking for ways to relieve burdens on places, which are
crowded. I noticed that the new governor has now said he's willing to talk to the government inTokyo. We don't want to be, that is the United States, the meat in the sandwich between Tokyoand a prefecture, which happens to be the poorest in Japan. And I suspect we’ll avoid that, but
Sheila, would you like to…
[Dr.Smith]:
So, there's a lot I could talk about in your comment, but let me just focus in on two pieces. One is
the Constitution and the LDP proposal, which was passed by the party this summer. It has four
elements, one of which you’ve pointed to, it was Article 9 and Prime Minister Abe, as we all know,
has suggested adding a third paragraph to Article 9, with a sentence that would simply say: ‘The
Self-Defense Forces are constitutional’. I suspect this came out of the 2015 experience of his party
and him, when the new legislation was passed, that he felt that it needed to be said straight and to
the point, in the constitution. But you will also be aware that there are many people in the LDP
and outside, who actually think that more ‘wholesale’ rewriting of Article 9 would be a better idea.
So, I think we're going to watch this Diet session into the spring and then obviously in next
summer's Upper House election, how that conversation unfolds. I don't think we should assume
that Mr. Abe is the only driver of the debate on constitutional revision in Japan. If you look at the
public opinion polling on this, you will see that there's a pretty broad appetite in Japan for thisdebate. Now, not everybody endorses the LDP's four suggestions, other parties have other ideas.
Privacy protections for example, environmental protections, what I would call more 21st century
ideas about what needs to be added to the Constitution. But I think you're about to see the Japanesepeople have a very serious conversation about the document. And they want the imprimatur of aJapanese voice on that conversation.
Now, whether it ends up being a referendum, I don't know. Whether it gets out of the Diet,
who knows, and I don't think we'll actually know what the Japanese people think until and if we
see a national referendum in Japan.
But I think it's important, whether we're sitting in Washington or we're sitting in Beijing or
we're sitting anywhere around the world, that we understand that the Japanese Constitution is theJapanese Constitution and our policymakers here may have opinions on what they'd like to see theSelf-Defense Forces do, but ultimately, it's a debate that will happen across Japan and will be
resolved by the people of Japan. I think it's a fascinating time to be watching Japanese politics, but
I don't think we should be fearful of the process.
[To Dr.Armitage] Did you want me to speak about Okinawa? No? Very briefly, I can. I'll
just, very briefly, on Mr. Tamaki. You know, he was a member of the Liberal Party, for those of
you who don't know, this is the new governor of Okinawa. He was elected to the Lower House in2009, he is the son of a US marine and an Okinawan mother. He is bicultural in every way. He’sa very interesting man. I'm sure that when he comes to Washington, which all Okinawan governors
do, we will all enjoy meeting him and getting to know him better.
13

I do think though that the conversation between Tokyo and Naha is an important one and I
agree actually with Rich that we shouldn't insert ourselves in the middle of it, but I think we should
respect it and we should understand that he didn't win by a narrow margin. He won by a significant
electoral margin. And for me, leaving the base issue aside, he's an important new next generation
face in Okinawan politics. And it's not just on the main islands of Japan, where you're seeing new
people come into politics, a new generation of leaders in Japan, you're also seeing it in Okinawa
and we need to learn a little bit more about what they think.

[Dr.Armitage]:Thank you, Sheila. Mike.
[Mr.Green]:
The question also raised Japan's relationship with Southeast Asia and I wanted to briefly point out
one more change, important change from the 2000 report to today. And that is, in virtually every
poll you look at, Japan is listed as the most trusted country in Southeast Asia, ahead of Australia,
the US, China, which is a remarkable change, an asset for the US, frankly, and for Japan. There
was a Lowy Institute poll in Australia recently that asked: ‘What leader do you trust to do the rightthing?’ and they had our president and many other leaders. After Malcolm Turnbull, who wasPrime Minister at the time, Australians said they trusted Shinzo Abe the most, to do the right thing.
So that's quite a transformation, it doesn't mean history's over, doesn't mean there are sensitive
issues, that are not there. But that's an asset for Japan and therefore for the US. By the way,
Malcolm Turnbull is speaking here tomorrow at CSIS, for those of you who like Australian politics.
[Dr.Armitage]:
We have two here and then I'll get back over to the middle. Chris Nelson.
[Chris Nelson]:Thanks so much, Chris Nelson, Nelson Report. As usual, fantastic report, so many possible
questions. But, I found myself worried increasingly about the trilateral aspects of it, with our
Korean friends especially. I would like to hear more, especially from Mike and Victor, who havebeen on this kind of thing. What are the potential disconnects you're worried about, with the next
set of things, with the North, of the North and between the North and the South and how can we
fit the management of those potential disconnects into what we're talking about here, because you
know you can't get there if you fall into a hole there.
And I worry about domestic political will. You know, we're all the pros, we do all the trade
and all the military and all this stuff, so you don't have to sell us on the Alliance and we don't selleach other, but you look at the absurdities, like, you know Osaka, you know ‘defriending’ San
Francisco, right? And you go, what the hell is going on here? Are there any adults in charge? And
our South Korean friends, similarly. Do they really actually want to be tight with Japan? You
worry about that, it isn't just us elites, it's actual real people. So two separate questions. How do
we compensate for, and what do you see as potential disconnects that have to be managed? Thanks.
[Natividad Fernandez]:Thank you very much, my name is Natividad Fernandes, Georgetown University, and my questionis related to the situation in Korea, so I wonder how far or how close is the reunification of Korea,
because according to some political statements, somedays it seems that is very close. So myquestion is, how will this reunification will impact on the relationship, on the US-Japan Allianceand also on the trilateral relationship? Thank you.
14

[Dr.Armitage]:
Dr.Chan, would you like to field the first and then Dr. Green.
[Dr.Chan]:
So I think that it's important to remember that for the three, for Washington, Seoul and Tokyo, we
have to look at this problem in terms of the full spectrum of threats that are presented. I mean, thisis not simply an issue of some recently tested missiles that are not even in the production phaseyet. And it's not only about artillery. It's about everything in between those things and, presumably,
if these negotiations move forward, as people talk about them moving forward, any sort ofsettlement would be addressing not just one aspect of the threat, but multiple aspects of the threat.
Now, is there a chance for delinking or decoupling? Certainly, there is. You know, there isthat chance. But that is why trilateral coordination is so important. That is why this has to be notsimply something that is on the to-do list that you just checkoff, like mowing the lawn, but it's
something that becomes a normal part of practice of doing diplomacy, doing this nuclear
diplomacy in Asia. And there are benefits to it, it's not just the negative side of avoiding decoupling.
Japan, if there is any solution that includes the lifting of sanctions on North Korea and the provisionof assistance, Japan would be an integral part of that, Japan and South Korea would be an integral
part of that. It would be hard to imagine that they wouldn't be in an integral part.
On the notion of a peace declaration, again, I think this is something, where we could
potentially see delinking. But then it's also in none of the countries’ interest to see a peacedeclaration for a bad deal. A peace declaration in return for something that does not meet minimum
standards of verification, minimum standards of whether it's on the nuclear side or conventional
force threat reduction, on the conventional side. So there, I think, there's a lot more in common
among the three countries, than we normally think of, because everybody's focused on one party
moving very quickly, while the other party, the United States, is sort of trailing behind except forthe president, who says we've achieved everything we haven't yet negotiated. And then there's
Japan that seems to be very far back. I think actually if you look at this, if you lay out what theinterests are, there's a lot more commonality than it's generally appreciated.
And then, finally, in terms of the domestic will of a progressive government, the firstprogressive government in South Korea in terms of Japan-Korea relations. As Rich said at the endof the initial remarks. You know, we're not naïve, we know some of the things that we look for inthis report are not easy. But in the long term, whether you're talking about a united Korea or a
Korea that is trying to reconcile with North Korea, the relationship, backstopping any of that flux
with strong trilateral Alliance coordination, there is no downside to that that I can think of. And
while progressive governments are generally less willing to engage in sort of bilateral and trilateralcoordination, they also understand it's a necessity. Whether we're talking about security
agreements or we're talking about economic agreements going into the future.
[Dr.Green]:
The atmospherics and the pageantry around South Korean president Moon Jae-In’s Pyongyang
declaration and summit with Kim Jong-un evokes all of the Korean people's natural desire forunification, singing Arirang, the flag with the Korean Peninsula. But the reality is, the South
Korean Constitution says: ‘there will be one Korea and South Korea's in charge’ and the North
Korean Constitution says: ‘there will be one Korea and North Korea's in charge’ and the possibilityof this leading to a peaceful unification or even confederation is, in my view and I think Victor
would agree, very very remote. But change can come very quickly to the Korean Peninsula andwhen it does, it will likely not be controlled, it will likely be very quickly. And when that happens,there's a scenario, where it leads to cooperation among the big powers, to peacefully unify the15peninsula and make sure it's denuclearized and make sure that there's a multilateral framework for
confidence-building and trade and everything else. But there's also a scenario where the suddenchange on the Korean Peninsula brings out all the worst geopolitical rivalries of three millennia
between Japan, Russia, China and the US.
So one more reason that the trilateral US-Japan-Korea is relationship is so important, isbecause, I think, it stabilizes that, it makes it less likely there will be the geopolitical rivalry. Polls
pretty consistently show most Koreans want a US-Korea Alliance after unification. China's
position is that unification should be what Beijing calls ‘independent unification’, which means
the Korean Peninsula is independent from the US, there no Alliance. So that is going to be the cruxof the matter. And if there is not a relationship between Japan and Korea that's positive, between
the US-Japan Alliance and US-Korea Alliance that's positive, that's going to leave open a kind ofwedge or an opening, where Beijing will be tempted to try to push for independent unification. So
I think it's in Korea's interest ultimately to demonstrate - not containment of China, but a solidarity
with Japan, just to dissuade China from thinking it can push for what it appears most Koreans don'twant, which is a separation from the US after unification. So in the long run, all of this trilateral
stuff matters a lot.
[Dr.Chan]:Just a quick, I mean just a quick data point. One of our projects here at CSIS, something called‘beyond parallel’ looks at the question of unification, where we've interviewed a whole bunch ofexperts in government affairs, maybe some of you in the audience have filled out our surveys, if
you have, thank you very much, if you haven't, shame on you. But one of the things that we foundfrom that, when we asked experts and officials from all the countries in the region how they felt
about unification, the alignment of US Japan and South Korean views on all sorts of questions,
ranging from denuclearization to health conditions, to infrastructure, there was more alignment
among those three countries, than any others in the region.
[Dr.Nye]:
Chris, let me just go to your second point quickly. On public opinion, the thing that strikes me isthat how much more resilient it's been than we might have expected. A lot of people interpreted
the 2016 election as a populist reaction against American Alliances, where we've been taken
advantage of. And what's intriguing and, remember, this is in the context of candidate Trump
telling David Sanger that maybe Japan and Korea should get their own nuclear weapons, that is
totally vanished. There's no public opinion in support of that and what's more, when you look at
public opinion in support of the US-Japan Alliance, it's proven substantially resilient. And I thinka lot of us are going to be in Tokyo next week for the Mount Fuji Dialogue and the Nikkei events.
But when Rich and I did this a year ago, I was amazed at how strong the support was for the
Alliance. I don't think that's changed. So, in a sense of the most intriguing thing about public
opinion might be the old Sherlock Holmes saying the dog that didn't bark.
[Dr.Armitage]:
Can we go to the middle here, someone in the fourth row? One two three four. You've been very
patient. And then we'll go to Keio University.
[Satoru Nagao]:
Thank you very much, my name is Satoru Nagao, Hudson Institute. This recommendation
mentioned the conduct combined.
[Dr.Armitage]:
I don't think we can hear you
16[Technical issues][Satoru Nagao]:
Thank you very much that I will speak from the beginning. My name is Satoru Nagao, thisrecommendation mentioned the conduct combined contingency planning. This recommendationis very important I think, but at the same time with all respect, it looks like this recommendation
only applies in the Northeast Asia, so if Doklam-type incident in the Indochina border area was acrisis, happening in the Maldives, what kind of combined contingency planning the United States
and Japan can conduct? It’s my question, thank you very much.
[Dr.Cooper]
A great question and Dr. Nagao, thanks for your work on Japan-India relations.
I would say we do think combined contingency planning is important, but we have tounderstand that there are legal restrictions in Japan to the scope of that kind of contingency
planning. And we want to be very respectful, as Sheila said, to Japan deciding where and how it
wants to interpret its own rules and legislation. And so, we have not been specific about where the
combined contingency planning should occur, I would say, I think as a first step that the East China
Sea is the place to begin simply because that's where we're under the most pressure and that's themost important place for the Alliance to be particularly strong. There's no question that we've been
doing more outside this China Sea, you know, we've been talking a lot about South China Sea andwe've seen Japan operate there into the Indian Ocean as well. But I think as a beginning point,
what we would say is, let's begin in the East China Sea and be able to respond quickly to any kindof Chinese escalation there and then we can see where things go, depending on how Tokyo andWashington believe the matter should be settled. Thanks.
[Dr. Nakayama]:
My name is Toshi Nakayama, from Keio University. I am now at the Wilson Center until next
summer.
One short comment and one short question. Despite what Professor Nye said in the first
and the second and third report, which came out, we were quite confident that it was an allAmerican voice. But this time around I think there's doubts. And yes, I do agree that most of theJapanese people support the Alliance. But there's this sense, I call it ‘Shyou ga nai’ realism, it's
there's no other option realism, so I have I think you have to sort of you know take into accountthe Japanese doubts, to a certain degree. And I'm sure all my friends are watching this event, backhome on the website, I hope you can address… on this specific point, you recommended that
including Japan into the five eyes and in the first report you said the Japanese intelligencecommunity has to do more. So are you now confident that you could sort of propose, you know,
including Japan into the Five Eyes? Because we don't see the intelligence cooperation, when we'reoutside. Is there a sort of common feeling that intelligence cooperation, at least between the US,
has sort of you know, been improved and you're comfortable that you, now you can propose
including Japan to the Five Eyes? So that would be my question thank you very much.
[Dr.Armitage]:
Dr. Nakayama, as I understand it, you want to know how serious we are about Five Eyes, adding
to it, and what is the realistic possibilities? Let me be clear. It is our view that just doing what
we've been doing for the past several years is not sufficient. We make the point that if you're
standing still, you're falling behind. And I made the comment that part of what we talk about, likeFive Eyes, is aspirational. There has to be a lot of change on the Japanese side. But from my point17

of view and knowing what I know about the intelligence sharing between the United States andJapan, we're pretty far along, we're pretty far along. Now, I think, some of the other members of
the Five Eyes would have some questions. Not everybody would immediately come along, but I
don't think anybody would question what we say in the report that Japan is our most important allyin the most important region of the world. Therefore, I think policymakers in the United States andintelligence officials in the United States could make a very good case, if Japan has all theprotections necessary in place to really make a good argument for Six Eyes for Japan.
[Mitsuo Nakai]:Thank you. My name is Mitsuo Nakai, Reagan Foundation.
This one is for you, Rich. I want to talk about the balance of power in the Asia Pacific. I'm
talking about China now. The security treaty that was signed between the two countries helped
protect Japan, as you know. However, Japan was up here but now China is up here, spending
military budget, something like 7.9% of their GDP. And now because of North Korea Japan is
beginning to spend more money in the military to protect themselves, I know that. This is for you,Rich, can you talk about China and balance of power?
[Dr.Armitage]:
I'm probably not the best suited but I can talk to it. First of all, it is right that Japan is spending
more on defense, as you suggest. But the Abe Administration for the past several years has been
adding the defense budget, not just about North Korea, more generally. And when we look at Japan,
when we think about it, we don't look at Japan standing alone, we see Japan with the United States
and the combination is able to deter, we have been able to deter. And that is the view of all of ourfriends. Mike talked about the view in Southeast Asia, they all have that view. And that doesn’tmean that we should slack in the efforts or anything like that.
We have to also not see China, I think, as 10 feet tall. My personal view is, Xi Jinping is
powerful, he's secure in his position but he's brittle. There are questions in this society about how
he's spending his money, there are questions in society about OBOR, which has been spoken about
up here. There are questions about why the people's armed police are growing a pace, why do you
need so many for domestic enforcement. So we have to do the best we can with our relationship,
not see our possible adversary and I'm not right yet calling China an adversary, if we do our job
and if great diplomats like Marc Grossman do their job, we will prevent a China from becoming
an adversary. But it's not for sure, it's not for sure. Mike or anybody, want to add?
[Henry Newsom]:
Henry Newsom. People can hear me? Central Gulf Lines are CJL's partners, NYK, Japanese based
global shipping giant, I’m also a Seventh Fleet veteran. Japan has a chronic energy thirst and it's
particularly acute post-Fukushima. The US is experienced in energy renaissance, blessed withshale and we’re on route to becoming a dominant global natural gas exporter and also a strong oil
exporter. Why was energy cooperation not addressed in the report, in addition to energy andeconomic implications, an energy agreement might be linked to strengthening American Sealift,
which is critical to our lives, and it has been in long-term decline.
[Mr.Green]
In the previous report, I think the previous two reports, we emphasized energy, in particular LNG
and recommended, in effect, an LNG Alliance. The way the rules work in the US, as you know,
you have to have a free trade agreement to get the permits to, you know, import LNG from the US
and we recommended moving ahead with an agreement that would be something like what you're
describing, with the benefits you described. Secure sources for Japan, the basis for cooperating on
18

merchant marine transportation and security through the MSDF and the Navy. And helping Japanwean from its own dependence on less secure areas of the world for natural gas. You know, we try
to keep the report brief, I think, it's fair to say but all of us, who participated, last time made that a
key point and I think you're right to raise it. It's an area where we should be cooperating.

[Dr.Armitage]:
I’d like to make a point here, if I may. I was talking about the aspirational nature of at least one of
our recommendations and the difficult nature of a lot of them. But if you were to look at all threeof our reports and look at all the different recommendations, at the time people were saying: ‘ohit's too difficult, can't be done’, and I don't think any of them have failed to be accomplished. And
I'm looking forward to the same happening over time, to this. I’ll just put that out there for you.
We've got about three more questions.
[Audience member]:
Steve Winters, independent consultant and formerly foreign researcher at Kyoto University.
The US military doctrine has evolved towards an emphasis on joint force operations. I've
seen the comment made many times that in terms of the Japanese Self-Defense Forces, they don't
have that level of integration in their operations that the US forces do. So when you're proposing
joint commands and so forth and so on, have you addressed the issue that the actual military
doctrines would need to be reconciled more than they are now?
[Dr.Cooper]:Yeah, I think that's an absolutely critical point, you know, over the last 20 years the United States
has done an immense amount of work to make the US military much more joint. And Japan has
been working on jointness for the last decade as well, but has a lot farther to go. And we certainly
recognize that and I think that's part of the idea behind the Joint Operations Command. Part ofwhat's been so valuable in, say, Australia, where they actually have a Joint Operations Command,is that they've been able to deal not only with some of the challenges relating to actual day-to-day
operations, but also to training, to readiness issues, by having more innovative command structures.
So part of our recommendation for the Joint Operations Command isn't just to- many
people often think of this as something like the INDOPACOM Command. That's not what we'retalking about, we're talking about something that combines both operations and training andexercise to get at the underlying jointness that we need to see from Japan. And that also will help
them be able to work more easily with US forces, which are extremely joint and still working to
get more so.
[Mr.Green]:
And there is no real doctrinal or legal barrier to jointness among the three Japanese Self-Defense
Forces, and in fact in recent years there's been a joint base in Djibouti, there's been a Joint Missile
Defense command, and the Joint Staff in Japan has actually put forward, for the first time, joint
requirements, Global Hawk, that are not service-specific. So within Japan it's really more of acultural issue, which you know is understandable. We have not since Goldwater-Nichols
completely gone ‘purple’ ourselves.
Bilateral jointness, the biggest obstacle is probably the ban on collective self-defense andthe change in interpretation a few years ago has helped to remove that. So I'd say it's mainly culturaland to some extent budgetary. That's why we're pushing this Joint Operational Command idea alittle bit, because there are supporters within Japan but the obstacles are more budget and culture.
19

We have a paper we did here at CSIS, put out by an Australian Colonel, on their experience with
their JOC and they had cultural and budgetary issues too. It's doable. This is not the most ambitiousof our recommendations, I think.

[Phyllis Yoshida]:
Thank You. Phyllis Yoshida, Sasakawa USA, a retired US Department of Energy. More probably
to Matt, as he and I have spent many years of our career negotiating bilateral trade agreements andtechnology cooperation agreements. If you could speak a little bit more I think than the panel has,to the recent announcement of renewed bilateral trade negotiations, pros/cons, outcomes. And thensecond, given that that will probably be a time of a little bit more escalating bilateral tension, as
those of us who worked in the 80s saw. What are some of the good merging, good news, issues
that perhaps the panel sees to offset some of that, sort of that likely-ed [phonetic] science in the
90s. Thank you.
[Mr.Goodman]:Well, I think in the current environment, here, in Washington it strikes me that we're always
looking kind of through a second-best lens at these issues and so I'd say, first best is the US
shouldn't have pulled out of TPP and we should have been working with Japan on these issues inthat context. But given that we did do that and we're where we are, I think this agreement withJapan is not bad. At least it protects against some of the things that we were all worried about, atleast it seems to for now. Like the prospect of applying tariffs on automobiles from Japan andelsewhere, for supposed national security reasons, which is going to be interesting to see how theCommerce Department, where you used to work, I’m sure you feel for your successors there, how
they're going to justify that. But it seems like Japan's dodged that bullet, Japan's also protected
some of its red lines on agriculture and so forth.
But the US has gotten what it wanted, which was a bilateral discussion. And so we'll see
where that leads and we do mention it, it was the last thing we added to the report. We had to stop
the presses to make reference to this deal and we said we're not sure where it's going to go, but it's
not a bad thing. And then I don't know whether your question was about other irritants that are
beyond economics, just other good news opportunities like science, medicine, other things? I mean,
I think there's lots of good stuff there and that's the kind of thing we ought to be promoting, but I
don’t know whether…
[Mr.Nealer]:Yeah, I mean if we haven't emphasized this enough, I would just add Japan's leadership in picking
up the broken shards and pieces of TPP and moving forward. That was not inevitable, was it?
We're grateful, hopefully you can leave part of the door open. One cautionary note on both theJapan agreement and the Europe agreement. I would just note with concern, this is the trade lawyer
in me, that February of next year is the deadline, the notional deadline on the ‘232 process’. I don't
think we've heard the end of this. I thought it was interesting that in whatever we're calling NAFTA
2.0, it included protective language for Mexico and Canada in the event of auto trade limits. Well,
you're a trade negotiator, why do you put those kind of things in, in the belief, if not certainty, thatthe risk persists?
[Dr.Armitage]:
Two more, you sir and then over there and then we'll call it a day. Right up here please.
[Vago Muradian]:20

Hi, terrific panel, Vago Muradian from Defense and Aerospace Report. Rich, I want to pick up ona point that you made about the use of language, right? It is not an adversary, whereas thisadministration looks like it's leaned a lot further to label China as a potential adversary. Whichthen colors everything. The economic conflict now, the Chinese feel like they can't back downbecause that's still a proxy confrontation with the United States. What is the role of language inthis? And more broadly, what do you think the strategy has to be, because all of you have addressed
different elements of this from the economic to the strategic, not to invoke Graham Allison in the
Thucydides Trap here a little bit, but you know there's a little bit of a concern about that. But you
can address that anyway, I know what your thoughts on that are, but I do that was just to give youa chance to address that. But more broadly, what does the language need to be here, do we need to
be a little bit less strident on the language in order to be able to get all the lines of national poweraligned, what's the role of rhetoric here?
[Dr.Armitage]:
Well, to me language does matter. I won't say that China will never be an adversary, but I think
my colleagues have all dedicated ourselves to do what's reasonable, logical and supportive of ouralliances to keep them from becoming an adversary, so I do use terms as a competitor, sometimes
we can cooperate. But if we see them as an adversary, we do tend to put them in a box, we tend tosee, for instance, this tariff regime, which I'm not opposed to correcting the economic playing fieldor leveling the playing field and certainly I'm not opposed to protection of our intellectual property
rights, there's no question about it.
But there's an irony in my view, my colleagues may not share this, in our tariff approachto China. If China were to do everything that we asked China to do economically, China would bemuch stronger. China would be economically more powerful. China would be able to put moremoney into security. So, it's a matter of emphasis, it seems to me, rather than just blanket
approaches…Joe, you look like you're going to jump on.
[Dr.Nye]:I take your point that language is important. We've got to learn to walk and chew gum at the sametime as a country, and we seem to always have to have a pendulum, either they’re a total adversary
or they’re a close partner. That's ridiculous, they're going to be both and what we have to learn isthat we're going to have areas, where we need to cooperate with them and areas where we're going
to compete. You're going to have fall outs and cooperation on climate at the same time, because
those are both things that are important and we should in principle be able to do both.
The danger I see is we get too hung upon language or metaphors, like the Thucydides Trap.
We get ourselves into a trap. Thucydides Trap is often used to say: ‘Well this is going to be likethe way Germany caused a threat to Britain at the turn of the last century, which created anxiety
in Britain, which led to World War I’. Well, there are two things to note about what the Thucydides
said: one was the rise of a new power, the other is the fear it created. And if we let ourselves
overstimulate the fear, we can have a self-fulfilling prophecy. It's worth remembering that
Germany had already passed Britain in industrial strength by 1900, 14 years before World War I.
China has not passed the United States. You know, purchasing power parity, you don't import jetengines at purchasing power parity, and if you look instead at exchange rates we're still a twenty
trillion dollar economy, they’re about a 12 trillion dollar economy.
It doesn't mean Chinese power isn't growing and won't continue to grow, but if we getourselves into you know, a dither about ‘China's passed us!’ and ‘The threat is here!’ so forth. We
can talk ourselves into something we don't want. What we're saying in this report is working withJapan and Australia and India and others, we can shape the environment, where China has to21

moderate some of its power ambitions. That's perfectly doable. This is not like World War I, it's
not a Thucydides Trap. People say they're going to drive us past the first island chain. Excuse, me,Japan is part of the first island chain. So, the language we use can get us into deeper trouble than
we need, as I said we're going to have to learn to walk and chew gum at the same time.
[Dr,Armitage]:
We have one last question.
[Audience Member]
Jun [inaudible], a visiting scholar at the George Washington University. I'm from the Korean Eximbank. Well, we are witnessing the negative side effects of China money invading small and poor
states with no further consideration of the synergy effects after investments. Well, the small andpoor states need to stop this at least for the development of their domestic consumption market
and trading partners’ relations. How can you make your infrastructure investment fund or regional
economic cooperation plan more attractive than China money plan over those small states?

[Mr.Goodman]:Well, I mean I think you know, money isn't everything. Money is important, but I mean, we doneed to spend more money and I think some of the things that the Trump administration is doing,working with Congress and encouraging it in this regard. There's a piece of legislation called the‘Build Act’, which is basically doubling the size of the OPIC, where Kevin used to sit on the board,
he can talk about that if he wants, and allowing them to take more active positions in some of theseprojects.
So we're doing little things, we have a USAID, Japan has JICA that does a lot of work, that
isn't that expensive [in terms of] capacity building and training. If you go to Myanmar as I did last
spring, and you go to the Development Ministry there, and you visit this Former General, who's
the guy everybody tells you to go and see, because he's the smart guy, who's kind of figuring all
this out for Myanmar, a really impressive guy. You walk past the JICA office, where there's aJapanese man I think, his name is Mr. Ueda, who's wearing a sarong and he gives you his card andhe's embedded in this Ministry, trying to help Myanmar plan and execute its development strategy.
This is something China doesn't do. We do this well and I think we can do more of that together
without spending huge amounts of money, so I think there's a lot we can do.
[Mr.Nealer]:Yeah, indeed, Matt’s right money isn't everything, but as my favorite economist Madonna says:‘Money changes everything’ and everything that Matt talked about in response to your question,
it's yes, but we, and I mean US and Japan, have to adequately resource these efforts, it's not justabout financial architecture and technology and whatnot. The money does have to be there in theend in order to create the energy in the interest and to sustain the way we want to be doing business.
I think we have a tremendous advantage, it would be up to us to lose it by the indifference, andthat's part of what this report is about, I think indifference or inattention could create that problem.

[Dr.Armitage]:
Well, it remains to me to first of all, along with Dr. Nye, to thank our panelists for their activities.
Great to work with and I can't promise you we won't have a fifth Armitage-Nye. But some of us
are getting a little longer in the tooth, so I think it's unlikely. Second, I'd like to thank CSIS for
their stewardship of this, they're putting together this excellent report and for their generalhousekeeping for the last hour and a half. But most of all I want to thank all of you who had enough22

interest, enough kindness to stay here for an hour and a half and listen to us. And hopefully if you
agree, disagree, that's all fine as long as we've all thought a little bit about this issue. So, thank youvery much.

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