April 2017

The Mt. Fuji Dialogue Special Task Force
Chairperson:
Akihiko Tanaka, President, National Graduate Institute for Policy Studies
Members:
Kazumasa Iwata, President, Japan Center for Economic Research
Shinichi Kitaoka, Emeritus Professor, The University of Tokyo
Takashi Shiraishi, President, IDE-JETRO
Akio Takahara, Professor of Contemporary Chinese Politics, Graduate School of Law
and Politics, The University of Tokyo
Heizo Takenaka, Professor, Faculty of Regional Development Studies, Toyo University
Motohiro Tsuchiya, Professor, Graduate School of Media and Governance, Keio
University
Hiroshi Nakanishi, Professor of International Politics, Graduate School of Law, Kyoto
University
Yoshiji Nogami, President, The Japan Institute of International Affairs
Yuichi Hosoya, Professor, Faculty of Law, Keio University
Satoshi Morimoto, Chancellor, Takushoku University; Former Minister of Defense
Tsuyoshi Sunohara, Visiting Professor, Sofia University; Chief Operating Officer, The
Mt. Fuji Dialogue（In the order of the Japanese syllabary）

“Toward a Greater Alliance”
A Policy Proposal of the Mt. Fuji Dialogue Special Task ForceIntroduction
Standing of the Proposal
Entitled “Toward a Greater Alliance,” this Proposal may be described as the Japaneseversion of the Armitage-Nye Reports (2000, 2007 and 2012) that summarized andpresented the discussions of US experts on the value and challenges of the Japan-US
alliance from a comprehensive and long-term perspective. With the birth of the
Trump Administration, however, this Proposal may now be of even greater
significance than its US predecessors.
Throughout the postwar period, Japan accepted the status of junior partner to theUnited States. Opting to be lightly armed and following economic-centered policies,
Japan successfully achieved reconstruction and development. At the same time, US
military bases in Japan became an indispensable element of the US military presencein Asia. Based on a shared value of freedom, the Japan-US alliance emerged as a link
between the overwhelming military power of the US and the complementary role
played by Japan, and has come to be highly appreciated in East Asia as a regional
public good. However, the newly elected President Trump publicly questioned someof these aspects of Japan-US relations throughout his election campaign, which heran under the aegis of “America first.”
Turning to the situation in East Asia, overwhelming US power has begun to recede
due to America’s own over-stretching and the emergence of China. North Korea has
made steady progress in the development of nuclear arms and missile technologies.
Meanwhile, Japan under the Abe Cabinet has undergone a series of changes that canbe considered to be epochal in the context of Japanese politics. These include theestablishment of a National Security Council and the partial revision of Japan’s
stance on exercising of the right to collective self-defense.
Given these developments, there is now a pressing need to re-examine and/or toreaffirm the value of the Japan-US alliance. The authors of this report participated in
the Mt. Fuji Dialogue, which launched in 2014 aspiring to strengthen bilateral ties bypromoting intellectual exchanges among corporate, political and academic leaders,came to believe that such a report needed to be written in light of the discussions
that had taken place through the Dialogue meetings.

Overview of the Proposal
The birth of the Trump Administration signifies the election of a leader who
unabashedly asserts the doctrine of “America first” and who has come to power
without making almost any reference to America’s political principles of1

commitment to freedom and democracy that have buttressed the postwar worldorder characterized by freedom. It can be said that this represents the injection of
the highest level of uncertainty to be seen in the world order since the end of theCold War. All the peoples and nations of the world are holding their breath as they
anxiously try to gauge whether President Trump will fundamentally alter the corevalues and principles of the United States.
Our fundamental position in publishing this Proposal is that both Japan and theUnited States should preserve without change the principles of liberalism thatguided the world in the Cold War Era and continued to give direction to the postCold War world order. It was based on these very principles of liberalism that Japanand the United States promoted the development of democratic domestic systems
and institutions, maintained economic prosperity, and fostered the technologicalinnovations and creative culture that have led the world. The two countries mustjointly endeavor to ensure that a liberal world order will continue to gain strengthand momentum in the future.
We also believe that it is essential to realize that the world has come to a criticaljuncture that requires the greatest “adjustment” ever in the post-Cold War period.
Of the various changes that have occurred in the world since the end of the Cold
War, special attention must be paid to the following four developments.
The first among these is the global spread of economic development. Many of theworld’s developing countries experienced remarkable economic growth during thefirst quarter-century after the end of the Cold War. The most dramatic reduction in
the ranks of the poor occurred in China and the countries of East Asia. Thisphenomenon generated a power shift of immense significance in the realm ofinternational politics.
The second development relates to the spread of freedom and democracy, andarrival of this process at its limits. Beginning the 1980s, the number of democracies
enjoying high levels of freedom continued to increase and exceeded 80 countries by
the end of the 20th century. However, this movement began to lose momentum
with the start of the 21st century and ground to a halt by around 2010. On the other
hand, countries such as China began to achieve remarkable economic growth
despite their low degree of freedom.
The third development pertains to continued instability in the vulnerable regions of
the world and the spread of terrorism. Once support was withdrawn from the US
and Soviet camps, many developing countries failed in maintaining and developing
their domestic political systems. Some countries descended into civil war. Terroristgroups were born out of this turmoil and have steadily elevated their level of activity.
Finally, there has been a resurgence of geopolitical military and paramilitary activity
among authoritarian governments. This too constitutes a trend that cannot be
overlooked in the post-Cold War Era.
2

Against the backdrop of these structural changes occurring in the global system, theemergence of the Trump Administration can be seen as the people’s pushback
against recent government policies and an expression of their deep sense offrustration. Even though the public statements of the President sometimes soundemotional, we accept that those are supported by the majority of Americans. Ourtask would then be to endeavor to understand the factors that provide thebackground for this support, and to seek out together with the US government apath to effective policies for addressing global challenges.
A quarter century after the end of the Cold War, the four trends outlined above havearrived at a juncture where they now demand a response from the United States andits allies. We believe the specific recommendations contained in the following
sections of this Proposal provide a roadmap for overcoming the challenges of this“Era of Adjustment,” for developing an even more robust Japan-US alliance, and formaintaining and promoting a liberal world order.
In that sense, we would like to make clear that the Mt. Fuji Dialogue highly
appreciates the achievements of Japan US Summit Meeting held between Japan’sPrime Minister Shinzo Abe and US President Donald J. Trump on February 10, 2017,
in Washington as well as the joint statement issued after the meeting, as theygreatly contribute to the strengthening of the Japan-US alliance.

Recommendations
A. Alliance Strategy[1] The Trump Administration should share the basic philosophy and principles of
the new National Security Strategy with Japan, its most important Asian ally.
In formulating its new National Security Strategy, the United States should seek toestablish a shared awareness with Japan’s new National Security Strategy. To
achieve this objective, the United States should maintain close exchange between
the staff of the National Security Council (NSC) and the staff of Japan’s National
Security Secretariat.
[2] Japan and the United States should share common China strategies.
China’s maritime expansion looms as a common concern for the Indo-Pacific region.
There is a need for powerful US strategies toward China, combined with Japan’s
close coordination based on shared foundations. Under US leadership, Japan-USAustralia and Japan-US-India should play a central role in formulating a regionalframework for the Indo-Pacific region, and cooperate with the ASEAN countries,
Russia and Mongolia to create a network of alliances and cooperation to ensure
regional stability and prosperity.
[3] Japan and the United States should jointly strengthen their capability tocounter the growing threat from North Korea.
3

To counteract the North Korean military threat, measures should be taken to
promote the Japan-US-ROK Regional Missile Defense Concept. As deterrence against
the threat of nuclear and ballistic missiles, Japan and the United States should
strengthen deterrence by denial, including the development and improvement ofballistic missile defense systems. Furthermore, Japan should consider developing
counter-strike capabilities with the deployment of early-warning satellites, electronic
warfare capabilities, precision-guided munition and other advanced assets without
delay.
[4] Japan and the United States should jointly act on the Republic of Korea toensure that it remains in the framework of Japan-US-ROK cooperation.
The Republic of Korea (ROK) is in the midst of an extremely serious political crisis.
Regardless of whether the current ruling party or opposition party comes to powerin the coming months, Japan and the United States must urge South Korea to staycommitted to deploy THAAD (terminal high altitude area defense), reinforce
sanctions on North Korea, and observe the Japan-ROK Agreement of December 2015
and keep improving relations of the two nations. Parallel to this, efforts must be
made to move forward on Japan-US-ROK security cooperation.
To ensure security and stability in the Korean Peninsula, a Japan-US-ROK military
information network should be created, and Japan-US-ROK “defense cooperation
guidelines” should be formulated in the future. Going forward, one of the challenges
will be to formulate concrete plans for cooperation and to conduct exercises basedon emergency situation scenarios. In preparation for such scenarios, it will benecessary to establish a consultative framework with related countries (including
China and Russia).
[5] Japan should foster frameworks for tripartite security cooperation, including
the Japan-US-Australia, Japan-US-ROK and Japan-US-India security cooperation.
US allies should avoid incongruous and incoherent responses to the Trump
Administration. Rather, it is desirable for allies to closely coordinate their response
and engage with the United States with a unified position. For this purpose, bilateral
security cooperation should be promoted, including Japan-Australia, Japan-ROK andJapan-India security cooperation.
[6] Japan and the United States should coordinate their Russia policies.
Dialogue with Russia is indispensable to realizing stability in the Middle East, the Gulfarea and South Asia. For this purpose, the development of a Japan-US-Russia
consultative framework should be considered. For Japan and the United States,
cooperation with Russia is also important in deepening ties with Central Asian
countries. Moreover, from the perspective of China strategies, it is desirable toengage in frank dialogue with Russia and to urge Russia to make positive
contributions. Reconstitution of Russia policies stands as an essential challenge for
the Trump Administration.
The Putin Administration is emphasizing economic and social improvement in the
Russian Far East. Procuring energy from Russia, particularly natural gas, will have the4effect of reducing Japan’s dependence on energy supplies from the Middle East. For
the United States also, cooperation with Russia in the energy field will help create amore solid foundation for resource development. Considering that the Japan’s
Northern Territories have important security aspects for Russia and building morestable Japan-US-Russia relations is an essential element of regional security, dialogue
should be promoted covering the regions encompassing from northern Japan,
Siberia, the Sea of Okhotsk, to the northern Pacific, and the Arctic Ocean.
[7] Cooperation in the areas of aerospace, cyber-security, and information must be
expanded and improved.
It is necessary to consult on and promote the respective roles and responsibilities
between Japan and the United States in space, cyber-security, and intelligence
related activities, nuclear power cooperation between the two countries and reformof the United Nations. In particular, Japan-US cooperation in cyber-security related
challenges constitutes an issue vital to national survival. In addition to cooperation
between national cyber-security agencies, it is important to create partnership
between the cyber commands of the two countries. Japan’s Cyber Defense Unit isabout one-sixth the scale of the US Cyber Command. As a first step, reinforcement ofJapan’s capabilities and technical exchange between the two organizations should
be promoted.

B. Asia Policies
1. China[1] Japan and the United States should take a cautious approach to security andeconomic issues involving China.
The China relations of Japan and the United States are characterized by two
simultaneous developments that are proceeding at high levels. These are growing
economic interdependence and strategic competition. In this environment, any
facile decision to advance either the economic or security aspect of the relationshipwhile sacrificing the other must be avoided. For each country, economic stability anddevelopment are very high priorities. In that sense, it would be an unwise policy tosignificantly restrict economic exchange. However, agreeing to a trade-off in termsof security and lowering one’s guard for the purpose of economic gain may lead todisastrous results.
[2] Japan and the United States should heighten the level of communication andmutual understanding regarding their China policies.
It is desirable to establish a mechanism whereby US China-policy personnel andChina scholars travelling to China stop by in Tokyo to engage in discussions andexchange of views. Such stopovers should take place either on the way to China, on
the way back from China or on both ways.
[3] Japan and the United States should promote dialogue with China and upgrade
public relation activities related to cooperation between both sides.
5Serious differences in understanding often emerge between Japan and the UnitedStates on one side and China on the other. Therefore, efforts must be made to avoid
China’s misunderstanding of the intent of Japan and the United States. To build
mutual understanding and foster trust, dialogue involving policy and military
personnel should be promoted. Additionally, it is necessary to promote dialogue andexchange among maritime law enforcement agencies. It is also important to widely
publicize and inform the public of the broad range of cooperation that already exists
in such areas as anti-piracy and anti-drug programs, and responses to environmental
pollution.
[4] In reacting to Chinese actions, Japan and the United States should calmly
demonstrate their principles through action.
While verbal dialogue is certainly needed to avoid misunderstanding of intent, it isalso important to exhibit one’s intent through action. Under the leader who shows apreference for action, China may begin constructing additional artificial islands in theSouth China Sea or ratchet up the level of provocation in the vicinity of the Senkaku
Islands in the East China Sea. To prevent to such situations, it is desirable for theUnited States to undertake Freedom of Navigation Operations in timely manners,
and for Japan to enhance the capabilities of the Coast Guard and the Maritime SelfDefense Force.
[5] It is desirable for the United States to maintain military presence in Southeast
Asia and for Japan to expand the scope of support for the US.
In order to uphold the rule of law in East Asia and to ensure the region’s steadyprogress, it is important to maintain US military presence in Southeast Asia based on
the foundation of the Japan-US alliance. Japan and the United States should
strengthen their consultation and cooperation in promoting social development inSoutheast Asia, and should thereby avoid economic stagnation leading to social
instability and a movement toward authoritarian regimes.

2. Korean Peninsula[1] In light of the unpredictability of the Kim Jong-un regime, the US and Japanese
governments should immediately renew the plan of Japan - US joint military
operations for an emergency situation on the Korean Peninsula.
Japan and the United States have crafted a joint plan to act swiftly and appropriately
in preparation for the emergency situation on the Korean Peninsula, but the rapid
progress of the North Korea’s nuclear and missile development and its unpredictable
leadership urge the Japanese and US governments an immediate response to renew
the plan. In 1994 the Pentagon considered the possibility of a surgical strike against
North Korea’ nuclear facilities in Yongbyon and they concluded that the tacticalforces of the North Korean army (missiles and artilleries) deployed near the military
borderline could launch an all-out attack toward Seoul, the Republic of Korea and thecasualties would exceed “500,000". If the warheads (nuclear and VX) were mounted
on newly developed ballistic missiles, the scale of ROK’s damage could be further
increased. Currently, it cannot be ruled out that not only ROK but also Japan and the
US forces in Japan will be subject to missile attacks by North Korea. Based on these6circumstances, Japan and the US should make a fundamental review on previous
joint operation plan and take all possible measures to overcome the new reality of
threat.
[2] Japan and the United States should strengthen their early warning andsurveillance systems by utilizing information gathering satellites and other assets.
On March 17, 2017, the Japanese government launched a state-of-the-art
information gathering satellite (IGS) Unit 5. The IGSs are Japan’s de facto domestic
spy satellites introduced in response to North Korea’s launch of a ballistic missile
towards the Japanese archipelago in 1998. Japanese government already has
deployed two radar satellites that can observe even in bad weather and at night, andtwo optical sensor satellites that can photograph at fine weather. In December 2015,
the Strategic Headquarters for Space Development at the Prime Minister's Officeannounced that the government would expand the IGSs to 10 units by 2024,
doubling both radar and optical satellites and adding two data relay satellites as well.
Both Japan and the US should strengthen the information gathering system further. It
is desirable that the US prioritize deployment of the most advanced IGSs in the
Northeast Asia or introduction of the early warning satellites in the region and theJapanese government draws the "blueprint" of the transition to 10 units of IGSs andbeyond without delay.
[3] The United States should put aside of the optimism regarding itself as an"offshore balancer" against the threat of nuclear weapons and missiles by North
Korea, and should strengthen the recognition of current situation that thosethreats are directing not only to Japan, ROK and the US military deployed in East
Asia, but also to its sovereign territory.
The Bush administration (43rd) put a label on North Korea as a "rogue state" andabandoned to explore a possible bilateral agreement on missile issues that was one
step further during the Clinton administration. The Obama administration placed the"strategic patience" in the main pillar of North Korea policy by rejecting to engage it.
The Obama administration refused to give a reward for “bad behaviors” typified by
nuclear and missile tests etc. and ignored them. Those responses could not stop
North Korea's nuclear and missile program, rather gave North Korea time fordeveloping even further. In the background of the two previous administrations’North Korea policy, there was an optimism that "North Korean missiles do not reachthe mainland of the US" (a former Bush administration's high-ranking official), inother words the US has a strong tendency to position the nuclear-missile threat ofNorth Korea as a "low dimensional level" which is different from that of Russia, China
and Iran. Now the US should fully understand the sense of urgency shared by Japanand the ROK, and that North Korea's nuclear and missile development is approachinga level of direct threat to the home land. It is necessary for the US to create a radical
solution of nuclear and missile issues by embarking on upgrading of regional missile
defense system in Northeast Asia and more stringent sanctions against North Korea.
[4] For the unification on the Korean Peninsula, the governments of Japan and the
US should initiate "highly confidential bilateral dialogue" at various levels such as
track 1, truck 1.5 and truck 2.
7

Currently several secretly-kept dialogues led by the US experts with the counterparts
from China, ROK, Japan etc. are progressing simultaneously to examine the future of
the Korean Peninsula. In a way to draw a clear line with those dialogues, it isdesirable to formulating a scenario of the reunification of Koreas by the Japaneseand US government officials, experts, former officials and others. What should be
frankly discussed in the scenario are not only the method of uncovering the wholetruth of the nuclear-missile program, scrapping it and relocating nuclear material to
the third country, but also investigation into the abduction of Japanese citizens,
calculation of the unified cost and funding with reference to the preceding exampleof East and West Germany and other wide range of issues. Japan and the US should
work in close coordination so that the coming "Unified Korean State" will sharecommon interests with the Japan-US alliance.

3. Southeast Asia and other regions[1] In Southeast Asia policies, the ASEAN framework should be effectively utilized.
Japan and the United States should support the principles of unity and integration of
ASEAN (Association of Southeast Asian Nations), should ensure that theirgovernment leaders participate in all East Asian summit meetings and various ASEAN
Plus meetings, and should utilize and reinforce these meetings as venues fordiscussing the common issues facing Indo-Pacific region.
[2] In the area of cooperation with Southeast Asian countries, emphasis should be
assigned to security cooperation centered on maritime security, and infrastructuredevelopment and other forms of economic cooperation.
In national security policies, the United States should steadily implement its military
rebalancing (pivot to Asia). Acting in concert, Japan should support Vietnam, thePhilippines, Malaysia and Indonesia in strengthening their coastal patrolling capacity,and should enhance security cooperation through the transfer of defense equipment
and other measures. In economic policies, realizing that China’s “One Belt, One Road”
economic cooperation is China’s response to the US rebalancing strategy, Japan andthe United States should jointly pursue economic cooperation in countries such as
the Philippines, Indonesia, and Myanmar where infrastructure development has
geopolitical significance.

C. Global Diplomacy[1] The United States should uphold the Iran nuclear agreement concluded withmajor countries.
Unilateral withdrawal from the Iran nuclear agreement or taking measures topractically invalidate it by the United States will only make matters worse in the
Middle East and Gulf countries and in the nuclear non-proliferation regime as well.
The United States should uphold the agreement, and begin with improving relations
with Israel, Saudi Arabia and Turkey.

8[2] Europe is a partner to both Japan and the United States in sustaining theinternational order. Support should be given to avoiding EU dissolution andpromoting its gradual reform.
For Japan and the United States, the sudden and rapid dissolution of the European
Union (EU) is something to be avoided. On the other hand, adjusting the trajectoryof the integration and raising national and/or regional autonomy to a certain levelwithin the EU are desirable options. Responding to the exit of the United Kingdom
from the EU can be seen as a touchstone in this process. Japan and the United Statesshould support the UK government to ensure a smooth exit, and should play a
mediating role between the United Kingdom and the EU. The G7 frameworkcomprising Japan, the United States, and leading European countries should be
utilized in managing the international political and economic systems. Furthermore,
the G7 should engage in separate dialogue with Russia, China, India, and others byinstitutionalizing a “G7+1” framework on a sub-cabinet level.
[3] Good political and economic relations with India constitute an important
strategic asset for both Japan and the United States. Efforts should be made tomaintain and strengthen these relations.
In light of the friendly relations that exist between Japan and India, the deepening ofdefense and economic relations with India will yield strategic benefits for both Japanand the United States. The two countries should strengthen their relations withPakistan, the neighbor of India. Moreover, Japan and the United States should
promote political stability in Pakistan, while seeking to secure the stable relations
between India and Pakistan.
[4] Japan and the United States should actively engage with African and Central
and South American countries to address global governance challenges.
African challenges include the achievement of economic growth and ending regional
conflicts, while the challenges in Central and South America are the achievement ofpolitical stability and restoration of public order. Tackling with those issues provide a
basic condition for the stability of American society in terms of migration of
populations. Both Japan and the United States should continue to promote close
cooperation in foreign aid.
[5] Neglecting the United Nations will have a negative impact on the United States.
The most significant challenges in the world today are the diplomatic relations
among major countries and global governance as a means to regulating cross-borderrelations. If the Trump Administration concentrates on the former, the United
Nations will have to play an even greater role than the past in addressing the latterchallenge. Given the importance of the United Nations in this regard, neglecting the
UN can only have a negative impact on the national interests of the United States.
The Trump Administration has identified eliminating the threat of the Islamic State(IS) and restoring regional stability as priorities of the highest order. To realize theseobjectives, major countries will have to work through the Security Council and otherUN agencies to provide a framework for peace building.

9D. Defense Policies
1. Strengthening Japan’s Defense Capabilities[1] Japan and the Unites States should cooperate in the field of the US “Third
Offset Strategy”.
The United States is moving forward on its Third Offset Strategy which aims toestablish deterrence by combining weapons, systems and strategies in new ways tocounteract the military superiority of adversaries and to ensure superior militarycapabilities. It is important for Japan to consider contributing to this process throughtechnological cooperation (cyber-security and aerospace-related technologies), andjoint-development and joint-production programs (unmanned systems including
various types of drones, anti-submarine systems, artificial intelligence, robotics,
materials, semiconductors, fighter aircraft, etc.). Japan possesses outstanding
technologies not only in basic research programs, but also in such areas as subsystems, parts and components, materials, manufacturing equipment and general
purpose technologies. These should be promoted as dual-use technologies that canbe utilized for both military and civilian purposes to enhance the comprehensive
capabilities of the Japan-US alliance.
[2] It is desirable to strengthen the functions and roles of Japan and the UnitedStates in defense cooperation.
Going forward, US presence in the Asia-Pacific region is expected to be further
reinforced and strengthened, including the deployment of larger numbers of
personnel and types of weapons. However, base force function to support themcannot be said to be adequate. Retrieval capacity and alternative facilities would not
be sufficiently available in case military bases are destroyed. It is necessary for Japanto enhance its support for US presence in Asia by capitalizing on its core logisticalsupport capabilities--such as supplies, repair and maintenance, communications andrefueling--and resilience. Japan should also engage in strengthening its necessary
defense capabilities. As a reference, member countries of the North Atlantic Treaty
Organization (NATO) have pledged to increase their defense spending to 2 percentof their gross domestic products by 2024. With these developments in mind, Japan
should steadily increase its defense spending during the next Medium Term Defense
Program (five years beginning in fiscal 2019).
[3] Japan and the United States should engage in peacetime joint operations andjoint training.
It is necessary for Japan to strengthen its capacity for defending remote islands andto enhance its capacity for responding to gray-zone situations. The defense budget
should be increased to cover the introduction of the following equipment andsystems: amphibious assault ships capable of carrying F-35B fighters, andamphibious warships to be deployed by the Self-Defense Forces; and large patrol
ships to be deployed by the Coast Guard. Parallel to this, legislation should beenacted to upgrade maritime patrol capabilities. For this purpose, it is desirable topromote the joint-use and enhancement of the survivability of bases and facilities
employed by Japan and the United States, and to engage in peacetime joint
10operations and joint training. In particular, expanding the joint-use of the US Marine
Corps bases and facilities in Okinawa where US presence is concentrated constitutes
a critical measure for Japan in preparation for emergency situations.
[4] A framework for Host Regional Support for fair defrayment of the costs of US
presence by allies and friendly countries should be considered.
The concept of “Host Nation Support” for defraying the costs of stationing US forces
should be expanded to create a framework for “Host Regional Support” forallocating the costs of US military presence in Asia among allied countries. Parallel tothis, it is desirable to pursue equipment inter-operability among allied countries.
[5] Joint Japan-US use of military bases in Guam should be promoted.
It is desirable for the Self-Defense Forces to partly lease and station personnel on US
military bases in Guam in order to promote participation in multinational exercises
and training in the Indo-Pacific regions. For this purpose, it is desirable to conclude a
new Japan-US Status of Forces Agreement. When Marines currently stationed in
Okinawa are moved to Guam, the Self-Defense Forces should construct a base in
Guam to be used in various types of training and joint operation programs (logisticalsupport base functions) involving Japan-US-Australia and Japan-US-India, as well as
involving various other countries of the Asia-Pacific region.
[6] The US military base in Djibouti should be expanded and improved, and joint
use by Japan and the United States should be promoted.
Djibouti is important not only for the anti-piracy operations in the Gulf of Aden, but
Djibouti also serve as a strategic foothold for Saudi Arabia as a demarcation between
the Red Sea on one side and the Gulf of Aden and the Arabian Sea on the other.
Recently, China has notably enhanced its presence in this area. Japan is currently
leasing portions of the US military base in Djibouti for use in transporting personnel.
In the future, this base should be used not only by the Self-Defense Forces but also
as a transit facility by Japanese government agencies for their activities in the Middle
East and North Africa. With this in mind, Japan should seek the cooperation of theUnited States in enhancing the capabilities of the base.
[7] Japan should expand its logistical support for the deployment of the US Marine
Corps.
Rotational deployment of the US Marine Corps from the US West Coast to the South
Pacific region will begin in the near future. As Japan will be used as a transit point for
the rotational force, it will be necessary for Japan to expand its capacity for providing
logistical support.
[8] Reallocation of the Kanto airspace and the use of Yokota Airbase should be
realized.
Commercial flights using the airspace over the Tokyo area are expected to increasesignificantly as the Tokyo Olympics approach. International flights landing and taking
off from Haneda Airport can only use a very narrow airspace that detours around theairspace under the air-traffic control of Yokota Airbase. It is desirable to take further
steps toward reverting the Yokota airspace to Japan. Furthermore, joint use of the11

Yokota Airbase should be increased and aircraft other than those specified under
Article 5 of the Japan-US Status of Forces Agreement (including commercial aircraft
carrying US government and government agency personnel) should be allowed touse Yokota Airbase.
[9] Japan-US cooperation in responding to major disasters should be promoted.
Japan-US cooperation in risk management during large-scale disasters occurring inJapan, the United States (Guam and other US Pacific territories) and the Asia-Pacificregion should be strengthened. A consultative framework for upgrading the level ofcommunication between the US Department of Homeland Security and related
Japanese agencies should be created. Both Japan and the United States should
exercise leadership in regularly conducting multinational disaster deployment
training.

2. Managing the Japan-US Alliance[1] The United States should utilize the channel of National Security Advisors incommunicating with allies.
Lieutenant General H.R. McMaster, the National Security Advisor of the Trump
Administration, should establish close communication and develop relations ofmutual trust with his Japanese counterpart Shotaro Yachi. This line of action would
facilitate the smooth and efficient implementation of Asia policies. Furthermore, inorder to effectively enhance the alliance and its influence in Asia, the United Statesshould establish lines of communication between its own National Security Advisor
and those of its allies.
[2] By maintaining close communication with the US National Security Council, theJapanese government should foster an appropriate awareness of the Trump
Administration’s national security priorities.
The Japanese government should utilize the National Security Secretariat toestablish communication with the White House. Insofar as the new administration ishoisting the banner of “America first,” Japan should endeavor to understand thenational security concerns of the new administration, and should then act within thescope of what is possible to cooperate in alleviating the fears and concerns of theAmerican people by bearing a fair amount of burden as an ally .
[3] Acting at the level of the Prime Minister’s Office, the Japanese government
should make full preparations on how it would respond if the Trump
Administration were to advocate national security policies that differ widely fromprevious policies.
It can be assumed that the US Department of State and Department of Defense will
follow policies that are more or less in line with existing ones. On the other hand, it
is very likely that statements from the White House, and particularly President
Trump’s Tweets, will contain pronouncements and policies that differ widely fromprevious policies. To develop an accurate awareness of the real intent of such12

statements, the Japanese government must maintain robust lines of communication
with the White House and engage in coordination and response on the staff level.
[4] Japan should develop its partnership with the Trump Administration so that it
can respond appropriately to the gray-zone security threats.
Japan should point out to the new US administration the importance and necessityof responding to the gray-zone security threats in Asia. Japan should also takeseamless approach to such threats by utilizing all available resources of the law
enforcement agencies and Ministry of Defense/Self-Defense Forces, while asking theUnited States to cooperate in these actions when necessary.

3. Cyber-Security Policies[1] Japan and the United States should work jointly to enhance cyber-attack
attribution capabilities.
Japan should act urgently to overcome legal obstacles to monitoring information andcommunication networks, and create organizational structures to take charge ofmonitoring. In addition to providing technical support to Japan, the United Statesshould cooperate with Japan in developing supervisory capacity to prevent rogue
activity by intelligence agencies.
[2] Cyber-offensive capabilities should be enhanced.
As indicated by its name, the Self-Defense Force’s Cyber Defense Unit is dedicated todefending against cyber-attacks, and the scope of its activities is restricted todefending the information and communication systems and networks of the Ministryof Defense and the Self-Defense Forces. However, cyber-defense and cyber-offense
are the two sides of the same coin, and developing a fuller understanding ofoffensive methods is indispensable to heightening cyber-defense capabilities. Japan
should enhance its capabilities through joint exercises with the United States andother means.
[3] Japan and the United States should extend the range of available sanctions
against cyber-attacks.
In order to deter cyber-attacks, it is important to prepare ahead of time a graduatedlist of available sanction measures to be implemented in response to cyber-attacks.
Japan and the United States should make it clearly known that prosecution andpunishment will be pursued whenever positive cyber-attack attribution is made.
[4] Multilateral cyber-diplomacy should be promoted.
Japan and the United States should heighten the pressure on countries suspected of
conducting cyber-attacks by building a loose multinational consensus on cybersecurity. In this process, Japan and the United States should utilize existing
multinational consultative frameworks, such as the international cyberspace
conference known as the London Process, and also examine the possibilities forcreating a new coalition of the willing.
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[5] Capacity to protect mega-events should be enhanced with priority assigned toresilience.
Large-scale and critically important events are attractive targets for cyber-attackers.
The 2020 Tokyo Olympic and Paralympic Games should be taken as an excellent
opportunity to sharply enhance Japan’s cyber-security capabilities. It is impossible tototally prevent or repel cyber-attacks, and it is more realistic to assume that someform of damage will be suffered through cyber-attacks. Acting under this assumption,priority should be assigned to achieving resilience, which is the ability to regain fulland normal operation as quickly as possible after an attack. Japan should seek thecooperation of the United States in considering measures for securing resilience.
[6] Reliable multi-tiered information transmission systems should be established in
preparation for “hybrid attacks.”
In addition to its traditional propaganda offensives, Russia is conducting “hybrid
attacks” that combine the intentional dissemination of false information withphysical attacks. Japan and the United States should prepare systems to be used forspeedy correction of fake news that the government determines has been
distributed.

E. Economic Policies[1] Changes in US policies should be realistic and predictable.
While the change in the US administration may underscore the American people’s
desire for a reorientation of policies, new policies should be pursued in a realisticmanner. For example, the revision and revamping of existing free-tradearrangements such as NAFTA and TPP will give rise to extreme confusion anddisruption if due attention is not paid to the fact that the pertinent regions havealready become highly integrated and complex supply chains are already in place.
Furthermore, economic activities will recede and atrophy unless the changes to be
pursued are made known in a manner that provides a comprehensive andpredictable vision of future developments.
[2] Japan should assist the United States in overcoming its economic problems andshould commit to “Make America Great Together.”
One of the challenges of the US economy is to reach out to those regions and strata
of people that have not been able to benefit from the global economy and havebeen left behind. On the other hand, Japan has clusters of companies that haveachieved high levels of efficiency in such areas as steel and energy. Realizing one-onone Japan-US cooperation in these industries will benefit both countries.
[3] The United States should cooperate with Japan in cyber-security and Japan
should consider introduction of the sharing economy using the United States as amodel.
The new tide of the so-called Fourth Industrial Revolution has gained momentum
during the 2010s and is generating heightened expectations for growth. However,Japan still has many challenges in these fields, in particular, cyber-security and14

sharing economy. US cooperation in training human resources in digital technologies
and overcoming related challenges facing Japan will provide US hi-tech industries
with business opportunities and will also prove beneficial to the United States.
[4] To appropriately address problems related to economic liberalism andglobalization, Japan and the United States should form a group of experts tasked
with early identification of problems and coordination of solutions.
The advantages and contributions of economic liberalism and globalization to
avoiding a secular stagnation in the world economy and capitalizing on opportunities
presented by the Fourth Industrial Revolution should not be underestimated. On theother hand, the negative aspects of these developments should be recognized andcorrective measures should be taken. Over the years, Japan and the United States
have engaged in robust and multifaceted intellectual exchange. Now is the time toutilize these assets and to create new channels for policy coordination.
[5] Effective policies should be implemented to overcome secular stagnation.
Tax cuts (reductions in corporate and personal income tax rates) and infrastructure
investment programs advocated by the Trump Administration and being discussed
by the Republican Party are effective policies for overcoming secular stagnation.
Among these, infrastructure investment buttressed by maximum utilization ofprivate funds and know-how corresponds to and is consistent with the Quality
Infrastructure Investment Project introduced by the Japanese government. Japanand the United States should strengthen their cooperation in increasing quality
infrastructure investment, not only in the United States but also throughout the
Asia-Pacific region.
[6] The United States should pursue an exchange rate regime that is consistent
with economic fundamentals.
The current upward trends in stock prices, interest rates, and the value of the US
dollar reflect the projected acceleration in US growth and widening of the fiscal
deficit. Aiming to control dollar appreciation, the US government should notunilaterally adopt protectionist trade measures, nor should it exert political pressure
on the Federal Reserve Board tasked with preserving price stability.
[7] The United States should not halt its advance toward a liberal trade andinvestment order and economic integration.
The United States has long been promoting the maintenance of a liberal trade andinvestment order and regional economic integration (NAFTA, TPP), and must not halt
its advance in this direction. With regard to the WTO, the United States should
engage positively in reaching an early conclusion to the Doha Round negotiations
and adopting a new agenda. Japan is situated at the nodal point of several megaagreements on free trade, and should endeavor as a bastion of free trade to realize ahigh standard of liberalization modeled on the TPP.
[8] Japan and the United States should act on China to abide by the rules of themarket economy.

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China has lodged protests with the WTO arguing that the reluctance of the UnitedStates and Europe to recognize it as a “market economy” constitutes unfair
treatment. Japan and the United States should act on China to restrain undue
government and party interference in private economic activities. If China applies for
TPP membership, the application should be accepted without hesitation, on thecondition that China continues to advance toward a “market economy.”[9] In order to prevent a rapid depreciation of the renminbi, Japan and the UnitedStates should jointly advise China.
The value of the China’s renminbi is facing downward pressure, which has become asource of instability, not only in Asia but also throughout the world economy. Japanand the United States should request the Chinese government to swiftly dispose ofexcess capacity in the industries and non-performing loans in the financial sector, torapidly lower the ratio of corporate debt to nominal GDP and to abolish capital
restrictions. Additionally, China should be encouraged to re-establish convertibilityof the renminbi and to transition to a floating exchange rate system over the
medium to long terms.
[10] Japan and the United States should consider introducing a carbon pricing
mechanism to counter global warming.
While Japan understands that the United States will be deregulating the energy
sector, at the same time, Japan and the United States should act to efficiently reduce
CO2 emissions by making full use of market mechanisms. To meet the obligations of
the Paris Agreement adopted in 2015, the greatest effort should be made towardutilizing such mechanisms as carbon taxes, emissions permits trading and bilateralcredit systems.

F. Japan-US Intellectual Exchange[1] Efforts should be made to continue, expand and enhance the quality ofintellectual exchange between Japan and the United States.
Japan and the United States should further strengthen platforms for intellectual
exchange, such as the Mt. Fuji Dialogue, through the active participation of the
President, Prime Minister, and other high-level government officials. Based on thediscussions that emerge from these exchanges, the two countries should avoid any
tendency toward mutual distrust or disparity in views, and should endeavor toformulate common strategic goals. At the same time, Japan and the United Statesshould aim to maintain the principles of the market economy, freedom of speech,
democracy and a liberal international order.
[2] Personal links between all strata and types of people should be promoted, notonly links between the elite.
The governments of Japan and the United States should constantly explain thesignificance of the Japan-US alliance to their respective people, while giving ear tothe voices of dissatisfaction that are rising from the “middle class” in advanced
democracies throughout the world. To achieve this purpose, policy dialogue should16

be strengthened and promoted, not only on an official level between the two
governments (Track 1), but also on a private level (Track 2) and on a semi-private
level (Track 1.5) including the Mt. Fuji Dialogue. By ensuring the participation of awide range of people from both countries, it is desirable to establish a broadly based
appreciation of the importance and uniqueness of Japan-US relations.
[3] Based on the framework of Japan-US dialogue, far-reaching networks should becreated throughout Asia.
Going forward, it is important for Japan and the United States to expand the scopeof intellectual exchanges exemplified by the Mt. Fuji Dialogue to friendly countries(India, Vietnam) and US allies (Australia, South Korea) in Asia-Pacific. By inviting thepromising people from the region to participate in these exchanges as observers,
efforts should be made to spread the shared understanding that exists between
Japan and the United States to all parts of Asia and to seek the appreciation andempathy of people throughout Asia.
[4] Measures should be taken to reaffirm the unusual character and uniqueness ofJapan-US relations and the importance derived from these qualities.
While mutually affirming their respect for the universal values of human rights,
freedom, and the spirit of equality, Japan and the United States should identify the“differences” and “commonalities” that exist in the culture, religion and philosophyof the two countries, and deal with each other with mutual respect. In so doing, afresh awareness of the importance and uniqueness of Japan-US relations should be
fostered, and the two countries should proactively put into practice the “harmony of
East and West” to thereby demonstrate to the world the true meaning andsignificance of globalization.

The Mt. Fuji Dialogue Secretariat
Koki Murai (Mr.)
Director, Japan-US Studies
Japan Center for Economic Research
1-3-7 Otemachi, Chiyoda-ku, Tokyo
100-8066 JAPANTEL +81 (0)3-6256-7715
FAX +81 (0)3-6256-7925
E-mail: murai@jcer.or.jp

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