Author: Hitoshi Tanaka, JCIE

US-Japan relations gained momentum with Prime Minister Shinzo Abe’s US visit in late April. Abe’s historic speech to a joint sitting of the Congress was well received. The two countries also announced the first revision of the US-Japan Defense Cooperation Guidelines since 1997, based on the understanding that the Japan Self-Defense Force (SDF) will take on a larger role and US-Japan security cooperation will be expanded.

This evolution in US-Japan alliance relations has taken place as the regional balance of power shifts. Emerging economies such as China, India, and ASEAN countries are rising; Asia’s middle class is growing; and US defence spending shifting toward a more sustainable, ‘lean-but-mean’ posture. Thus as the Abe administration struggles over the next couple of months to pass legislation to expand Japan’s security role, structural shifts in East Asia are making it clear that the next step for Japan and the US must be to transform the alliance into a more multifaceted partnership.

Japan must strengthen regional trust. The 70th anniversary of World War II offers an opportunity to affirm Japan’s peaceful postwar identity and to mend ties with South Korea and China. In his anticipated August statement, Abe must unequivocally face up to Japan’s historical wartime transgressions without dropping any of the key elements of the Murayama Statement. At the same time, Abe should set out Japan’s defence policy in a forward-looking way — clearly stating that it is aimed solely at defending Japan and contributing to the peaceful enhancement of the regional security environment — to dispel any misperceptions in China and South Korea that the revised US-Japan Defense Cooperation Guidelines or Japan’s new security legislation to allow limited forms of collective self-defence represent a return to a more aggressive regional posture.

A change in the US mindset is needed so it may truly act as a resident power in East Asia. Current projections are that Asia will be home to two-thirds of the global middle class by 2030 and will account for more than half of global GDP by 2050. As the regional order evolves to reflect these shifts, it is critical that the US become more intimately and directly involved in the order-building process. This requires the US to move away from its tendency to act as an external balancer and toward a more engaged day-to-day involvement and leadership role in the region across political, security and economic dimensions. One channel for the US to project such political leadership would be to spearhead the establishment of a four-party China-Japan-ROK-US confidence-building mechanism. Such a mechanism would be well positioned to foster reassurance diplomacy regarding the evolving role of the SDF and the US-Japan alliance, and to promote agreements on military-to-military hotlines and crisis management procedures to reduce the risk of accidental collision and to mitigate damage in the event of a crisis.

The US and Japan should strengthen trilateral security cooperation with partners such as South Korea, Australia, India, and the ASEAN nations. In particular, deeper US-Japan-ROK trilateral cooperation, including contingency planning, is urgent given the uncertain situation on the Korean Peninsula. Trilateral cooperation directed toward North Korea should take into account the need to engage China and Russia, make preparations to steer the situation toward a soft-landing unification, and utilise Track 2 diplomacy to inject fresh ideas from academia to ensure the long-term stability of the Korean Peninsula.

The forward deployment of US troops throughout East Asia needs to be re-examined regularly — through intensive consultation with alliance partners — to ensure it is politically sustainable and able to meet contemporary challenges. While the US forward deployment is a critical regional public good, it must be re-considered whether maintaining US forces in such a high concentration in one area of the region, as they currently are in Okinawa in the face of strident local opposition, is the best strategy over the long term to fulfil US-Japan alliance goals. Advances in new military technologies and the changing nature of regional security challenges make it increasingly desirable to establish a broader and more dynamic forward deployment posture where US soldiers are more evenly distributed and rotated across the region — a trend that is already underway with increased cooperation with partners such as Australia, India, the Philippines, Singapore, and Vietnam. At the same time, as the SDF continues to expand its roles and functions to engage in limited collective self-defence, there will be greater potential for joint US-Japan basing arrangements, which should be utilised as an opportunity to deepen US-Japan security cooperation.

Finally, Japan and the US would be wise to complement their security cooperation with more vigorous efforts to constructively engage with China in key areas, including on multilateral financial institutions, mega-regional trade agreements, and energy and the environment.

The Asian Infrastructure Investment Bank (AIIB) presents a litmus test of how the region will react to the rise of China. Major democratic economies (including Australia, New Zealand, and South Korea, France, Germany, Italy, and the UK) have signed on as founding members. The two prominent absences are the US and Japan. Japan should join the AIIB promptly for three reasons. First, by participating in its formative period, Japan will be better positioned to promote high performance standards on governance and transparency from within. Second, Japan’s participation is important in order to foster ADB-AIIB cooperation. While China can self-finance its own infrastructure development, it continues to go through the ADB (including US$1.49 billion in 2014) because of the accompanying expertise, quality control, and environmental standards it brings. ADB-AIIB cooperation would help to establish similar measures in the AIIB, thereby improving its ultimate impact. Third, the AIIB calls for a 25/75 percent split of funding between extra-regional and regional members. The addition of Japan, Asia’s second largest economy, would diversify the sources of Asian funding and mitigate the risk of Chinese dominance.

On mega-regional trade agreements, the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP) risk dividing the region into competing US- and China-led trade blocs if not carefully managed. In moving toward final TPP and RCEP agreements, it is important that a pathway be created allowing for their future amalgamation as a steppingstone toward the establishment of a Free Trade Area of the Asia Pacific. Over the long term, the TPP should be utilised as a vehicle to stimulate cooperation with China. As such, it should include an open accession clause to establish a clear and transparent process by which China (and other RCEP members) can join the TPP in the future after reaching predetermined economic benchmarks. At the same time, the RCEP should be utilised as a vehicle not just to deepen economic integration among the ASEAN+6 countries but also to bridge the gap between advanced and developing countries within the region.

Regarding regional energy and environmental cooperation, the demand for energy will continue to grow exponentially over the coming decades in Asia’s emerging economies. Joint efforts are needed, such as on energy exploration, development of new extraction technologies, and strengthening of nuclear safety measures, to ensure that the energy demands of all nations are met. Japan and the US can cooperate in pushing the East Asia Summit or other regional forums to take up these issues in a more serious manner. At the same time, the unabated use of fossil fuels will cause environmental damage that is detrimental to sustainable economic growth and poverty reduction, not to mention the ecology of the planet. In order to meet the growing regional energy demand in an environmentally sustainable manner, the US and Japan — as global leaders in technology development — should coordinate and invite all like-minded nations to promote cooperation for jointly funded and developed green energy technologies.

Recent successes in bolstering US-Japan security cooperation are important for the alliance to meet post–Cold War challenges. However, the US and Japan need to take a multifaceted approach in order to steer the evolving regional order in a positive and inclusive direction. Such a multifaceted approach to regional cooperation will go a long way in helping to ensure the peace and prosperity of the Asia Pacific throughout this, the ‘Asian Century’.

Hitoshi Tanaka is a senior fellow at the Japan Center for International Exchange and chairman of the Institute for International Strategy at the Japan Research Institute, Ltd. He previously served as Japan’s deputy minister for foreign affairs.

This article is an extract from East Asia Insights Vol. 10 No. 2 July 2015, which is available in full here, and is reprinted with the kind permission of JCIE.

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The next step for the US-Japan alliance