Event Recap: January 12 and 19, 2021 21JPSI/Brookings Special Two-part Collaborative Webinar Series “U.S.-Japan Relations: Policy Challenges for the Biden Administration”

On the eve of the inauguration of the Biden-Harris Administration, 21JPSI and the Brookings Institution Center for East Asia Policy Studies joined forces to convened eight leading experts from North America and Japan to discuss pressing foreign policy challenges for the U.S. and Japan under the new administration. The first panel focused on issues related to national security and domestic politics and was moderated by 21JPSI Director Adam P. Liff. The second panel focused on trade and other transnational challenges and was moderated by CEAP Director Mireya Solis. Both events were open to the global public, and attracted a combined total of over 400 attendees.

Full-length recordings of both panels are available at the following links, and concise summaries of speakers’ prepared remarks appear below.

• Panel 1: U.S.-Japan Relations: National Security and Politics (Watch the recording on YouTube) – January 12, 2021
• Panel 2: U.S.-Japan Relations: Trade, COVID-19, Climate, and Infrastructure/Connectivity (Watch the recording on YouTube) – January 19, 2021

Challenges from China

Andrew Erickson (U.S. Naval War College, Professor of Strategy)

As the Biden Administration enters office, the United States, Japan, and the Indo-Pacific face difficult challenges, particularly from the People’s Republic of China (PRC). The region is a very worrisome neighborhood for Japan, with direct implications for vital American interests. Beijing is attempting to carve out a zone of exceptionalism within which international rules and institutions—long taken for granted in Tokyo, Washington, and around the world—are subordinated to PRC policy preferences. The risk is greatest in what PRC strategists term the Near Seas—the Yellow, East, and South China Seas—home to all China’s disputed island and maritime claims. Here, Beijing continues to pursue coercive envelopment of claimed territories, together with the subjugation of less powerful neighbors. Of these three seas, the East China Sea contains the highest-stakes, most-intense risks: concerning both Taiwan and Senkaku Islands.

Major trends in the force structure China is developing and deploying to these ends pose particular challenges to Japan, the region, and the United States. China’s armed forces increasingly enjoy dominance in numbers and sufficiency in quality. Each of China’s three major armed services has its own sea force. The People’s Liberation Army Navy (PLAN), China Coast Guard (CCG), and People’s Armed Forces Maritime Militia (PAFMM) all answer to a military chain of command under paramount leader Xi Jinping himself. Each of China’s sea forces is the world’s largest in numbers of ships—by a significant margin. Regionally, the operations of these sea forces, as well as military flights, are significant and growing in worrisome ways.

As the U.S. seeks to confront the challenges posed by China, Japan is a uniquely important ally. Washington and Tokyo enjoy a comprehensive partnership built on a bedrock of shared values and highly compatible systems. When it comes to regional basing for U.S. forces, Japan with its archipelago of more than 6,000 islands is simply irreplaceable. The enduring nature of geography has positioned it astride both Asia-Pacific “island chains,” which strategists have repeatedly prioritized in great power competition over the past century. Upon that unparalleled foundation, Japan is enhancing its already formidable role in upholding power projection and regional access for U.S. forces as a comprehensive partner with growing capabilities and interoperability. Japan has unique opportunities to alter military dynamics in the Alliance’s favor through deployment of land-based conventional mobile missiles, both indigenously and in partnership with U.S. forces.

Going forward, the Biden Administration must prioritize the U.S.-Japan Alliance by leading from the front, firmly opposing and countering pernicious PRC behavior, and accepting friction and risk. President Biden should expeditiously appoint an Ambassador befitting the Alliance. This should be a senior professional with the President’s ear experienced in security and crisis management. Keeping Taiwan free, democratic, and part of an open Indo-Pacific is critical for the U.S.-Japan Alliance. The Biden Administration must recognize how vital Taiwan is to both American and Japanese interests in terms of values, politics, security, and such apex technologies as semiconductors and proceed accordingly.

Challenges in Emerging Domains: Space, Cyberspace, and Digital infrastructure  

Yuka Koshino (International Institute for Strategic Studies, Research Fellow for Japanese Security and Defence Policy)

There are three major challenges for US-Japan relations in the Biden administration as it concerns new and emerging domains.

The first challenge in new and emerging domains stems from China’s, Russia’s, and North Korea’s increasing development and use of asymmetric capabilities in new domains to undermine the more traditional deterrence created by the US-Japan alliance. The development of kinetic and non-kinetic anti-satellite weapons systems has transformed space into a warfighting domain that could disrupt US and Japanese military operations, which rely heavily on space-based communications and precision timing satellites. These other countries are also investing heavily in offensive cyberweapon capabilities, which could penetrate both government and civil networks--thus causing security and economic damage to society.

The second challenge is the rapid growth of China’s digital footprint in the region through its Digital Silk Road project—i.e., the digital dimension of the Belt and Road Initiative (BRI) designed to promote Chinese network infrastructure, e-commerce services, and smart cities across the region. A major focus is the 5G mobile network. The 5G network, which will see massive data flows, will serve as the backbone of the digital economy, transforming industries by connecting smartphones, cars, factories, and Internet of Things (IoT) devices. There are only a few 5G vendors in the global market, and Chinese firms dominate it—despite security concerns in the USA, Japan, and many other democratic countries. Specifically, these governments are concerned that the spread of technologies from untrusted vendors may undermine the rules-based free, open, and inclusive digital economy in the region.

The third challenge in these new and emerging domains is the lack of governance. There is no “arms control” agreement in the space or cyber domains, or even an agreed-to set of rules and norms on how emerging technologies – big data, artificial intelligence, quantum technologies, etc.— should be used. Moreover, the rapid spread of Chinese digital technologies is allowing the country to promote its model of digital governance with authoritarian and protectionist leanings. There is a growing need for a coordinated response from the US, Japan, and like-minded partners to prevent the spread of such a model, which could undermine liberal and democratic values.

In recent years, the US and Japan have steadily deepened bilateral and multilateral cooperation in the aforementioned new domains, including as part of the 2015 revision to Guidelines for US-Japan Defense Cooperation. Examples include efforts to enhance cooperation on Space Situational Awareness (SSA), improving resiliency in associated systems, and a statement declaring that the US commitment to defend Japan under Article 5 of the 1960 Mutual Security Treaty applies to state-sponsored cyber-attacks under certain conditions.

The Free and Open Indo-Pacific vision and agreement between the two governments to emphasize digital connectivity in strategically important regions also served as a catalyst to discuss cooperation on digital infrastructure financing in third countries and to jointly promote the development of multi-vendor 5G solutions (based on O-RAN) as cost-effective alternatives to Huawei’s offering.

Yet when it comes to how to deal with the China’s capabilities in these new and emerging domains, approaches have differed. The Trump administration’s unilateral measures to ban the use of Chinese technologies and services under the “Clean Network Initiative,” often without consulting with Japan and other U.S. allies and partners, have had significant economic consequences.  The incoming Biden administration is expected to reinvigorate U.S. engagement of multilateral forums to coordinate policy with like-minded partners and to manage the strategic and economic challenges from China.

Challenges from North Korea

Sheila Smith (Council on Foreign Relations, Senior Fellow for Japan Studies) 

Pyongyang's nuclear and missile program challenges the alliance in three ways. First, North Korea has demonstrated the capacity to deliver weapons of mass destruction to Japan, as well as approached the capacity to deliver them to the United States. The extended nuclear deterrence provided by the US to Japan must be enhanced and adapted in response. Second, Japan also worries that its defenses are increasingly inadequate compared to the upgraded missiles deployed by North Korea. Ballistic missile defenses may be sufficient to protect Japan from a rogue attack, but when Kim Jong-un fired a series of missiles, short and medium range, in Japan's direction and then demonstrated significant progress in the development of an intercontinental ballistic missile (ICBM) that could reach the continental United States in 2017, Japan’s ballistic missile defense (BMD) systems seemed inadequate to defend against a missile strike. Japan’s defense planners are now considering whether the ability to retaliate is required to deter a missile attack from North Korea.

Finally, the U.S. and Japan have at times been out of sync in efforts to negotiate with Pyongyang. Tokyo continues to advocate for a full denuclearization by North Korea, and openly acknowledging North Korea as a nuclear state is an anathema to Japan. President Trump's negotiations with Kim Jong-un, while endorsed by then Japanese Prime Minister Shinzo Abe, raised considerable concern about what terms the U.S. might be willing to accept. Many believe that Kim Jong-un has even less interest in negotiating away his arsenal now that he has a deliverable nuclear capability, and some argue that a moratorium on missile and nuclear testing may be the best chance of eliminating the threat to the region. A common approach among U.S. allies on how to achieve denuclearization is also complicated by the deterioration in relations between Tokyo and Seoul since 2017.

What's ahead for the Biden Administration? The new US administration will face a North Korea with demonstrably greater military capability, and it will also face deepened contention between its two Northeast Asian allies. Similarly, there is little common ground between any of these three governments and China on how to handle the North Korean nuclear threat.

Typically, efforts at alliance mobilization result in closer cooperation among the three allies when Pyongyang tests missiles or nuclear weapons or engages in other types of military provocation. Ensuring a robust allied military response to a military provocation by Kim Jong-un is a first step. But important too will be a North Korea policy review - with our two allies – to determine what, if any, outreach to Beijing is needed should tensions once again flare. In the absence of a North Korean provocation, the new U.S. administration would be well served by strengthening the international coalition imposing UN sanctions designed to limit the flow of money and technology to Pyongyang. Japan's role in sanctions monitoring has been active in the wake of 2017, along with partners in Asia and Europe.

Rethinking our diplomacy in the wake of the COVID-19 pandemic may also offer a new approach to talks with Pyongyang. The US, South Korea and Japan should share information on the state of the pandemic within North Korea and devise a common approach to humanitarian and scientific assistance that could provide a new opening with Kim Jong-un.

Challenges in Domestic Politics

Toshihiro Nakayama (Keio University, Professor of American Politics and Foreign Policy; Japan Institute of International Affairs, Adjunct Fellow) 

Former Japanese Prime Miniser Shinzo Abe successfully managed US-Japan relations under the Obama and Trump administrations. Not many leaders of Western democracies were able to do both. Abe saw the need to restructure Japan’s foreign policy and security policy due to new challenges surrounding Japan, and, despite the two being very different leaders, both Obama and Trump could be seen as a ‘retrenchers.' Abe’s priority was to convince both of them that Japan is a good alliance partner and that the US has to be a resident power in the region. He somehow succeeded in convincing both. This success was one of the reasons he was popular despite many setbacks domestically.

Current Japanese Prime Minister Yoshihide Suga will try to pursue an “Abe 2.0” foreign policy. However, this will be hard to do because of the COVID-19 crisis. He will have to focus on this issue. U.S. President Joe Biden will also have to focus on domestic issues.

A recent editorial carried by the Yomiuri Shimbun indicates that Japan is worried about the US becoming more reluctant playing a forward-leaning role in international affairs. The erosion of the foundation of domestic democratic governance is also of a huge concern. The end of the Trump era will not simply revive American global commitments. It is becoming difficult for American leaders to convince the American public of the need for a robust American internationalism. Perhaps this worry is an overreaction in the short term. But if strategic competition with China is to extend beyond the mid-21^st-century, this concern should not be dismissed as overblown.

The question then, is what should Japan do? We have yet to start asking this kind of question. Today, many agree that the US-Japan alliance rests on a firm foundation. But given varied challenges domestically and internationally, there are doubts about the sustainability of this foundation. To be sure, there is no sign of anti-Americanism or strong skepticism about America in Japan today. But these longer-term concerns are unlikely to go away anytime soon.

Challenges in Trade and Economic Cooperation

Wendy Cutler (Asia Society Policy Institute, Vice President and Managing Director, Washington D.C. Office)

The U.S.-Japan bilateral trade agenda is in relatively good shape. The Phase One trade deal which went into effect a little over one year ago provided important agriculture market access for U.S. farmers, as well as an ambitious digital trade agreement. While both sides agreed to launch Phase Two negotiations last spring, these talks never materialized. The official reason given was COVID-19, but it is no secret that there has been a lack of interest in continuing negotiations in both capitals. While bilateral irritants remain in such sectors as pharmaceuticals, agriculture non-tariff measures, and autos, these issues can be addressed bilaterally without the framework of a comprehensive free trade agreement (FTA). 

Japan remains very interested in the U.S. rejoining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Since the CPTPP came into effect over two years ago, no countries have expressed formal interest in accession, although the U.K. may do so soon. President Xi Jinping recently conveyed possible Chinese interest, although it’s difficult to see how Beijing could meet the CPTPP market access and rules commitments any time soon, particularly as the Chinese state continues to expand its role in China’s domestic economy. In Tokyo’s view, U.S. re-entry into the CPTPP would substantially increase the heft and influence of this high-standard agreement, at a time when the Regional Comprehensive Economic Partnership (RCEP) framework is gaining favor in the region.

Tokyo will undoubtedly want to explore the possibility of the U.S. rejoining the CPTPP with the incoming Biden Administration. But, it’s unlikely that they will be pleased with the response. The Biden team plans to focus on domestic recovery and competitiveness before entering into trade agreements. Moreover, the TPP remains controversial in the United States. It does not reflect the new trade paradigm that the Biden Administration plans to develop, which focuses on ensuring that trade agreements benefit American workers and communities.

Neither the lack of interest in pursuing Phase Two bilateral negotiations, nor the complications associated with possible U.S. re-entry into CPTPP, means that the U.S. and Japan cannot forge a closer economic and trade relationship in the coming years. Quite the contrary. Given the challenges facing the Indo-Pacific region because of China’s rise, as well as the crisis in the World Trade Organization (WTO), there is fertile ground for Washington and Tokyo to work closely together, while bringing in other countries, to address these and other challenges.

In light of this, narrower sectoral regional trade agreements, led by the U.S. and Japan, may be a more realistic approach—at least for the time being. Such agreements could also help lay the groundwork for U.S. CPTPP re-entry down the road, if that’s the course for the Biden Administration wishes to pursue. Regional deals addressing digital trade, medical supply chains, climate and trade, and anticorruption/transparency are examples of possibilities to consider.

The Biden team will be interested in working with Japan in a collective effort to address challenges posed by China, including in the trade and technology spaces. Close U.S.-Japan cooperation on this front becomes all the more important in light of the recent investment agreement concluded between the European Union and China. Such cooperation could involve rule making and standard setting, as well as coordination on defensive measures in such areas of export controls and investment screening.

U.S.-Japan cooperation on WTO reform will also be important. Japan can play a key role in working with the U.S. and others to launch industrial subsidies- and other non-market economy issue-related negotiations in the WTO, advance the e-commerce plurilateral negotiations, and repair the dispute settlement system.

Finally, the U.S. and Japan should consider hosting APEC back-to-back in an effort to replicate the accomplishments achieved in 2010-2011 during the Japan and U.S. host years, respectively. This forum could play an increasingly important role in laying the groundwork for developing rules and standards in key emerging technologies, particularly at a time when the U.S. will be reluctant to enter into major new trade negotiations. 

Cooperation on Infrastructure Finance and Regional Connectivity

Saori Katada (University of Southern California, Professor of International Relations)  

The world faces an estimated US$94 trillion in infrastructure investment needs over the course of the next two decades. Especially given China’s aggressive push into the developing world via its Belt-and-Road Initiative, it is vital that both Japan and the U.S. meet this challenge through better rules and higher standards.

Japan has taken the lead since 2015 by promoting its Partnership for Quality Infrastructure with US$200 billion in funding and an emphasis on life-cycle cost and debt sustainability, while the U.S. followed up with the BUILD (Better Utilization of Investment Leading to Development) Act that established the new International Development Finance Corporation. Following the declaration of the G20 Principles for Quality Infrastructure Investment at the Osaka G20 Summit in June 2019, the United States, Japan, and Australia launched the Indo-Pacific initiative called the Blue Dot Network with the goal of creating a mechanism to certify that infrastructure projects meet their high standards based on criteria including transparency, sustainability, and social/environmental impact.

As the world tackles the COVID-19 challenge, there are also concerns about debt sustainability. With declining economic activity both domestically and internationally, 83 countries around the world are currently receiving some kind of financial assistance and debt relief from by the International Monetary Fund. Even prior to this crisis, some borrower countries in Asia have faced repayment challenges, especially vis-à-vis China’s infrastructure loans. With the need for restructuring government debts under Covid-19 likely to expand, the G20 finance ministers recently agreed to establish a common framework among G20 creditors for a coordinated debt restructuring process. The U.S. and Japan are well-placed to take the lead in addressing this problem.

As many regions start to dig out from the crisis, the U.S. and Japan have to be leaders in promoting sustainable and high-quality infrastructure around the developing world, so that these societies can explore bankable infrastructure projects and make those projects the engine of economic recovery and growth. President Biden’s “Build Back Better” Economic Recovery Plan should include an international component to support infrastructure improvements in developing countries with the emphasis on inclusive development, and clean and sustainable growth. Japan should continue to be the leading voice in quality infrastructure and sustainable development through the Free and Open Indo-Pacific forum and in the context of Sustainable Development Goals. It is important for both Japan and the U.S. not to be tied to inward-looking recovery as both countries will face significant post-Covid fiscal challenges. Finding ways to channel private funds (which is fueling stock markets in both countries) into infrastructure investment in Asia and beyond will yield long-term benefits for both countries and the rest of the world.

Climate Cooperation: Opportunities and Challenges

Jane Nakano (Center for Strategic and International Studies, Senior Fellow) 

The United States and Japan have strong cooperation across a range of fields, including in energy. In the coming years climate change may become the dominant focus of bilateral energy engagement, as the Biden Administration is set to join Japan and nearly 100 other countries that have some form of mid-century carbon neutrality commitment. Innovation will be essential for the Biden Administration and the Suga Cabinet to reduce carbon emissions and transform their economies.

Although much of the bilateral energy engagement of the last four years has centered on the effort to increase energy security through hydrocarbon trade, there already is a strong foundation for bilateral cooperation in clean energy technology. This should be jumpstarted. As two leading global economies with strong scientific and technological capabilities, the United States and Japan have extensive clean energy collaboration at the government-to-government, business-to-business, and scientist-to-scientist levels. The two countries have much to gain by leveraging what they both can bring to the table, including smart grid, nuclear energy, hydrogen, energy storage, and carbon capture and storage technologies.

But climate cooperation will need to go beyond clean energy technology cooperation. The Biden Administration’s climate commitments include stopping China from subsidizing coal exports and seeking a G20 commitment to end all export finance subsidies of high-carbon projects. The Biden Administration appears resolved to follow up on China’s commitment per the Obama-Xi agreement of 2015 to “strictly controlling [sic] public investment flowing into projects with high pollution and carbon emissions both domestically and internationally.” Meanwhile, Japan in August announced that the Japanese government as a rule would no longer support coal plant exports, although with some notable caveats. The two governments should take care to align their coal export policies to ensure a united front in urging China to deliver on its climate commitments and  to facilitate  energy transitions around the world.

The Impact of COVID-19 on Asian Geoeconomics and US-Japan Relations

Yves Tiberghien (The University of British Columbia, Professor of Political Science; Co-Director of the Centre for Japanese Research)

COVID-19 has had several major impacts. First, in responding to COVID-19, East Asian countries, Australia, and New Zealand aced the health policy response. They clearly did better than anyone else, including the advanced economies of North America and Europe. Taking just the aggregate measure of total Covid-19 deaths per million on January 15, 2021, the worst 4 countries are Slovenia (1501), Italy (1345), the UK (1288), and the U.S. (1185). In East Asia, the numbers look very different: Indonesia is at 93 deaths per million, the Philippines at 90, Japan 33, South Korea 24, Malaysia 18, Singapore 5 (along with New Zealand), China 3, and Thailand 1. Even more impressive are Mongolia (0.6), Vietnam (0.36), and Taiwan (0.29). They punched way above their weight due to three key features: high institutional preparedness and reactivity; competent and centralized management that put health specialists in charge; and generally high social cohesion with respect to public health measures.

Second, due to their effective health responses, East Asian economies are bouncing back from the COVID-19 crisis faster than other regions. According to the Asian Development Bank’s December 2020 Development Outlook, Northeast Asia (not including Japan) is the only region that will end 2020 with a positive growth rate (+1.6%), to be followed by an expected bounce of 7.0% in 2021. China and Vietnam both finished 2020 with annual growth rates of +2.3%. Japan took a larger hit with an expected -5.4% in 2020, to be followed by a slower recovery in 2021 (+2.3%). One major consequence: COVID-19 is an asymmetric shock that accelerates the relative rise and regional integration of East Asia.

Third, 2020 was also marked by the failure of major institutions of global governance, particularly the G20, the G7, the UN Security Council, the World Trade Organization (WTO), and partially at least, the World Health Organization (WHO).

Fourth, regionalism picked up some of the slack, especially in East Asia, Africa, and Europe. The two most significant institutional advances of 2020 may well be the conclusion of the Regional Comprehensive Economic Partnership (RCEP) among 16 Asian and Oceanian countries in November and the EU-China Comprehensive Agreement on Investments (CAI) on December 30.

Finally, the Covid-19 crisis has accelerated the shift to digital technologies and mobilization around a green economic transformation. The green acceleration (including the Net Zero pledges by 2050 made by Japan and Korea and 2060 for China) opens the door to intensified competition for dominance of the new economy.

The start of the Biden administration offers great opportunities for cooperation between Japan and the US after years of stress in the relationship. Japan is a staunch supporter of the entirety of the liberal international order, including global economic institutions, rule of law, democracy, and human rights.  Emerging US-Japan priorities for cooperation under the Biden administration include: 

1. Health policy cooperation, including cooperation on reforming the WHO in the wake of the US return to the organization; 
2. A joint strategic vision for buttressing the liberal international order; 
3. Cooperation on reforming the WTO to ensure a return of the US to the adjudication body (and of course, if possible, renegotiating the Trans-Pacific Partnership to ensure the return of the US); 
4. Cooperation on innovative industrial policies to advance innovation and competitiveness in the US and among allies; 
5. Cooperation on digital governance to advance the Osaka track on data free flow with trust; 
6. Cooperation on green technology and planning for a green economic order in the 2030s that is not dominated by China. 
7. US Support for healthier Japan-Korea relations.