Japan’s asset price bubble burst in the early 1990s, and its economy suffered three lost decades. It was overtaken by China as the world’s second largest economy in 2010. Population peaked in 2008 at 127 million and has continued to decrease. And post-Cold War defence reforms under the Article 9 ‘peace clause’ have hit a possible peak after the Abe government passed the September 2015 security-related bills recognising the right of the Japan Self-Defense Forces to engage in limited forms of collective self-defence.
Who would want it differently? Japan is in peak form — a prosperous, comfortable, secure society, plugged into the frontline of technological advance.
The latest issue of East Asia Forum Quarterly, launched today, examines questions about how Japan is managing these peaks.
At home, how has five years of Abenomics fared in revitalising Japan’s economy and how successful has it been in stepping up to the challenge of structural reform? How is reining in government debt being managed and the viability of the public healthcare system — one of the largest contributors to Japanese debt — in a super-ageing society with a shrinking taxpayer base being secured? What role can womenomics play in bolstering economic growth by increasing women’s participation in the workforce, and are conditions for working women really improving?
Externally, Trump’s ‘America First’ policy has opened questions about the US–Japan alliance and how Japan might take more responsibility for its own defence. Can Japan rely on the United States for its security or should it hedge its bets based on its own capabilities? What do Japanese defence planners need to prioritise as the security environment in East Asia changes? Can Japan stake out a more independent role in regional order building? Will the tentative Japan–China detente stirred by the advent of Trump turn into something more permanent? Where should Japanese policy on the Korean Peninsula head after the Singapore summit? Will the strong domestic public resistance to moving Japanese defence policy reform beyond the framework of Article 9 triumph over Mr Abe’s desire for constitutional change on the ‘peace clause’?
The way in which Japan manages these questions will profoundly affect the future shape not only of Japan’s own peace and prosperity but also of the East Asian regional order.
In this week’s lead article from EAFQ, Sheila Smith begins with the acknowledgement that ‘US foreign policy seems to have settled into a state of persistent flux, with longstanding diplomatic relations turned on their head. Allies have been dubbed adversaries, and adversaries described as friends’.
Abe has managed the turbulence that Trump has visited upon US partners better than most. He was quick to shore up the new administration’s commitment to the alliance and the nuclear umbrella. The bond between Trump and Abe remained strong despite abrupt shifts in policy. Last year, North Korea’s accelerated missile tests drew Abe and Trump closer together, beginning with Pyongyang’s decision to launch missiles over Japan just as the leaders were meeting in February that year. Before South Korea’s President Moon Jae-in was installed, Tokyo and Washington took the early lead in responding to the growing tensions around the Korean Peninsula. Security cooperation was front and centre when Trump visited Tokyo in November 2017. By year’s end, Abe and Trump had had more than 20 direct conversations on how to manage the diplomatic and military response to the heightened threat from the North.
Yet in Japan’s relationship with the United States too there have been serious setbacks that have encouraged Japanese reassessment and re-positioning.
A primary pillar in Japan’s economic and political security arrangements, additional to the US security alliance, is US support for the multilateral trade and economic order. With the corrosion of that rules-based system, in which China is also a centrally important participant, confidence in regional and global prosperity is weakened and the management of political tensions around economic issues is more problematic. Japan and China have built the third biggest trade relationship in the world, despite their awkward political relations, because both countries are signed on to playing within the global rules.
Abe and Japanese policymakers have put a huge amount of effort into keeping the United States–Japan partnership on an even keel, but have suffered serious setback after serious setback through unannounced shifts in Trump administration policies. These shifts have increasingly exposed the fragility in Japan’s core economic and security interests in the relationship.
On trade, Japan received no prior warning of the application on 23 March this year of US tariffs under Section 232 of the Trade Expansion Act on steel and aluminium imports on the grounds that they threaten national security. The tariffs potentially affect about US$2 billion of Japanese exports and there was no exemption for Japan, a trusted ally. More importantly, the illegality of these trade actions, as well as that of the sweeping actions against China, deeply shook the trust of Japanese officials in the Trump administration’s respect for the global trade regime.
On the security policy front, the Abe cabinet had no real warning of the announcement made by South Korean officials on 8 March 2018 that Trump had agreed to meet with North Korean leader Kim Jong-un. Abe’s readiness to run to Washington to patch up and paper over these and other shocks barely disguises the seething frustration in Tokyo with its erstwhile ally. The tactical rebuilding of relations with China is one outcome of this frustration.
As Smith concludes, ‘the alliance that has weathered the Trump era best is not immune to its growing liabilities’. And the shape of the East Asian order is shifting perceptibly under their impetus.
The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.