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December 2000

Time to Think the Unthinkable: Responding to Rich Armitage's Paper

Tomohiko TANIGUCHI (Fellow, GLOCOM)

Prior to the US Presidential election three papers had been published in the US, as noted at the end of this paper, all calling for a fundamental revision of US policies toward Japan. One of them, entitled The United States and Japan: Advancing Toward a Mature Partnership, especially deserves a response from Tokyo because it invites Japan to engage in a debate with the US to drastically reshape the bilateral alliance. "We see the special relationship between the United States and Great Britain as a model for the [US-Japan] alliance", the paper states.

Behind this never-before-heard statement lies a shift amongst US strategists in the manner in which they view the parameters shaping the East Asian geo-politico-economic environment. China's emergence as a possible, and increasingly likely rival to the US is just one of those changing parameters. In order for the US to secure order and prosperity in the ever fluid region where no institutional framework equivalent to, say, NATO exists, some in Washington think of the US-Japan relationship as a central pillar upon which further strengthening is badly needed. Hence the proposal emerged to make the bilateral relationship look more like "the UK-US Special".

The instinctive response to the authors of the paper in fact is clearly apparent. To say that it is highly unfeasible, as Japan has no interested, or like-minded parties for Washington to talk to is in no doubt. Indeed, the participants of the study group are all aware of that. "Let's put the bar high, and give Japan chance to catch up" was in fact the prevalent notion, as I learned from one of them.

At present, the ball they hit hard has fallen onto an empty court. It is doubtful whether Tokyo has even realised that the ball is on its own court, left largely untouched. Herein lies one of the most important tasks for Japan - all the current political mess notwithstanding, it urgently needs to build a brain centre in order for the nation to be constructively engaged in a debate such as this. It is not until the country equips itself with the capacity to respond that Japan can respond to a proposal like this, whether to agree or otherwise.

The case in point is that Japan is undergoing a once-in-a-century reshuffling of its government apparatus. The year 2001 will see the establishment of a refurbished Prime Minister's Office in which analytical as well as decision-making abilities are to be enhanced greatly. The office plans to recruit from the corporate sector a seasoned executive who will take on the long overdue role as the PM's strategist. It will also have a division specifically in charge of examining the geo-strategic information that the nation's own search satellite is supposed to gather. If this organisation essentially evolves to become the Japanese NSC, Japan's stake-holding countries, notably the US, can at last have a sounding board.

They say in Britain that the much-acclaimed UK-US special relationship is in fact a special illusion. Britain is at the moment increasingly in search of its own identity, sandwiched between Europe and America. Yet for a constructive debate to be held in Tokyo, it is noteworthy that the special relationship is multi-layered: its security alliance with the US is only a part of the entirety. To begin with, the UK has long been the single largest recipient of US investment that flows to Europe, both in terms of portfolio and foreign direct investment. The opposite is also true. In part because the City of London is amongst the largest financial intermediaries of the world, the UK is the largest provider of capital to the US, financing the latter's widening current account imbalance. Professionals such as accountants see no border in-between, for the way they do business resembles one another. More recently, industries in both countries have been merging to a greater degree, as evinced by BP-Amoco. If the International Republican Institute that has been committed to promoting democratic elections in a number of transitional countries (if not in Florida) is virtually unknown in Tokyo, the institute finds a sister in the UK's Westminster Foundation.

The implication for Japan's relationship with the US is now clear enough: it has a long way to go and there is much to be done before a "power-sharing" (in Rich Armitage's term) with the US can become possible, even acknowledging that this is the ultimate goal to be pursued. Top of the list of priorities for Japanese policy makers should be to accommodate as much US direct investment as possible. To the benefit of Japan, the Anglo-American way of business accounting has finally found leeway in corporate Japan. If Japan can claim to be a marketplace in which predictability and transparency are second to none, this in itself provides the country with a reliable insurance policy, for this makes the Japanese market too important to lose for any foreign national, be it American or Chinese. The long-talked about economic deregulation thus becomes of strategic importance. This must be implemented quickly.

Lastly, the notoriously piecemeal approach that Japan has long adopted when it comes to dealing with the US should be replaced with a comprehensive one, for one piece is closely linked to the other, as shown thus far. Now the time has come for Japan to think the unthinkable.

Richard L. Armitage,, The United States and Japan: Advancing Toward a Mature Partnership (October 2000, INSS Special Report, downloadable at

Bruce Stokes, A New Beginning: Recasting the U.S.-Japan Economic Relationship (A Council on Foreign Relations Paper, July 2000) downloadable at!3700)

Laura D. Tyson,, Future Directions for U.S. Economic Policy Toward Japan (October 2000, Independent Task Force Report, The Council on Foreign Relations)

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