An Outlook of Japan-US Relations Under the Bush Administration

Yoshihiro SUZUKI (Executive Advisor to NEC)

(written with the help of Katsu YAMANAKA, Manager, Washington D.C. Office, NEC USA, Inc.)

During his inauguration on January 20, President Bush stressed the importance of unity, civility and compassion. Although specific policy issues were not mentioned during this speech, the focus on values as well as comments made by the president and his advisers during the campaign and after have promised some changes to US domestic and foreign policy. On the foreign policy side, the Bush administration will conduct a humble foreign policy in which the US will lecture less and listen more. This is especially true in regard to Japan, which has been the target of considerable pressure by the Clinton administration.

Bush's early promises have given Japan hope that the relationship will become less confrontational and more cooperative. However, as Japan learns more about the new administration, it must also evaluate its own expectations for the relationship.

The Bush Administration's Policy Towards Japan

The Bush administration will probably modify Washington's constant stream of advice and its hard tone toward the government of Japan. In fact, Treasury Secretary O'Neil has already publicly promised to intervene less than his predecessor when dealing with the economies of other nations. Specifically focusing on Japan, O'Neil said that he would try to seek solutions with people from industry, while pursuing traditional conversations with Japanese politicians.

The new administration has also emphasized the importance of its key security allies, including Japan. It recognizes the necessity of renewed attention to improving, reinvigorating and refocusing the Japan-US alliance. In short, the new administration will be taking a substantially different approach to Japan in regards to security, economic and trade policy issues.

According to statements by members of the Bush team, the administration will look to its key allies - especially Japan - to play a more significant role in Asian regional security issues. The US could demand greater defense spending by Japan, an end to the remaining limitations on the role of Japanese military forces outside Japan, more involvement in collective defense initiatives, and possible deployments. The US may also want support for a regional defense system.

With the United States' interest in a healthy and strong Japanese partner, it seems more likely that the Bush administration will be interested in seeing a convincing economic recovery in Japan that will return it to position of economic strength in Asia. Thus, the Bush administration may be even more demanding than the Clinton administration when it comes to Tokyo taking real and decisive steps to jump-start its economy. Dramatic economic deregulation, abandonment of failed subsidy policies for protected industries, and implementation of real transparency in all sectors has been avoided by the ruling Liberal Democratic Party. Many members of the new Republican leadership have viewed this lack of action by politicians with considerable contempt.

Regarding trade policy, it is clear that the initial focus for the Bush administration will be on trade policy issues within the hemisphere. The Free Trade Agreement of the Americas (FTAA) will be the first major trade priority for Bush. The administration also will be struggling with Congress to achieve fast track negotiating authority in order to move ahead with any new trade agreements. Thus, the bilateral relationship with Japan will most certainly not be an early priority. While it appears that the Bush administration will eventually want to explore some type of bilateral free trade arrangement that could include other pacific nations such as Australia, Chile, New Zealand and Singapore, it is more likely to pursue sporadic bilateral trade disputes. This is due to the fact that there are many lingering issues such as auto parts, glass, and insurance, that are still on the policy agenda and are being pushed by disgruntled industry groups in Washington.

Japan's Expectations for the Bush Administration

Generally speaking, the Bush administration's approach to the Japan-US relationship doesn't seem to be as bad as the approach by the former administration. In fact, some of the emotional conflicts that came with the Clinton era may be removed. There are, however, still some issues that the Japanese government should carefully take note of:

• The US economy is rapidly slowing down. Maintaining a robust US economy is essential for a sound global economy.
• The US may take a hard position toward North Korea and Taiwan security issues. Japan prefers a stable transformation of the regimes in this area that avoids any unnecessary conflict.
• The US government expects robust growth of the Japanese economy. The US should remember to be patient while Japan is undergoing the transition of economic reform.
• Trade issues may be highlighted again as the US economy slows down. It is better to avoid too much intervention by the government in specific sectors. Section 201 should not be applied carelessly.
• There are sentiments against the WTO mechanism in the United States. Cooperation among WTO members is necessary to start the new round of the World Trade Organization successfully.

Before submitting a list of detailed requests to the Bush administration, it is important for Japan to decide what it wants for the Japan-US relationship. This clarity is especially true during a period of uncertainty in Asia, a new national leadership in the United States, and a continuing process of economic, political and social transformation in Japan.

Japan should be aware that the new administration could lose patience with Japan's continued economic weakness, and will desire a more vital and activist leadership in Tokyo. Keeping this in mind, Japan should be prepared to take more initiative and active leadership roles in Asia as part of its shared responsibility. Most importantly, Japan should be careful not to express its expectations for the new administration before it has acknowledged and accepted these responsibilities.