Why reassurance is needed
The upcoming summit meeting between President Obama and Prime Minister Abe offers a good opportunity to inject a healthy dose of reassurance to allay two fundamental concerns that worry not only the United States and Japan but also many other countries in the region: 1) the ability of the United States to successfully execute its policy of rebalancing towards Asia, and 2) Japan’s ability to stay the course on a pragmatic foreign policy that avoids forays into historical revisionism and attaches the utmost priority to the task of economic revitalization through ambitious structural reforms. These are no small feats and there are limits to what a leaders’ summit can achieve, but the best way to get there is through actual deliverables.
The economic agenda—in particular the bilateral market access talks in the Trans-Pacific Partnership (TPP)—is the obvious candidate for both governments to aim for for a significant breakthrough. An agreement in principle in the trade negotiations would boost confidence in the American commitment to remain a Pacific power and the Japanese resolve to tackle the sources of its economic stagnation and remain an influential actor in international affairs. There are of course other areas of promising bilateral cooperation, such as the drafting of new guidelines for defense cooperation, but these will not be ready by the time of the leaders’ meeting.
Trade, therefore, looms large in the success of the Obama-Abe summit. The key here is that the TPP agenda opens a new chapter in U.S.-Japan relations—not only because of the unprecedented ambition in the economic sphere (across the board tariff reductions, tackling of non-tariff barriers, and drafting new rules of trade and investment for the Asia-Pacific), but also because the outcome of the TPP talks has emerged as a focal point in solving the foreign policy credibility problems that both countries face. Trade can no longer be considered “low politics” when it figures so prominently in the final outcome of a bilateral summit meeting with important ramifications for core priorities in each country’s foreign policy: the American rebalance and Japan’s economic rebirth. This coming Obama-Abe meeting is a fresh and eloquent reminder of the growing importance of geo-economics in world affairs.
Trade as the politics of credibility
The Trans-Pacific Partnership is an integral pillar of the rebalance because it offers a richer strategy of U.S. engagement with the region, one that captures the deep and multi-dimensional ties in U.S.-Asia relations. The TPP guarantees that the American rebalance will not be perceived as a narrowly defined shift in military strategy. But more importantly, it is the TPP leg of the rebalance that can accomplish the most important task of all: to reassure Asian nations that the United States is not interested in fueling a Cold War in Asia by isolating its most important security competitor in the region. At the core of the American TPP policy lies an inducement—not containment—strategy towards China. The bet is that China, working of its own volition and setting its own pace, will find the TPP a useful lever to accomplish the set of ambitious economic reforms that it admits are essential to re-launch its development model.
Critics of the rebalance toward Asia point to the lack of military resources (both because of the need to address pressing crises in other regions of the world and because of the budgetary cuts imposed through the sequester) and the weakening effect of polarized domestic politics (for example, the government shutdown that prevented President Obama from attending the APEC summit last October) as indicators of the rhetorical nature of the rebalance. They even question American resolve to enforce its own red lines in Syria or prevent further Russian encroachments in Ukraine. Hence, at this critical juncture the U.S. government can ill afford to let the TPP talks stall. Securing a market access deal with Japan and passing trade promotion authority will be two essential tasks in rescuing the Asian rebalance.
Prime Minister Abe received high marks at home and abroad when he emphasized economic revitalization as the central priority of his administration and hinted at a pragmatic approach to foreign policy. However, his visit to the controversial Yasukuni Shrine last December and hints about possibly revising the Kono statement (which offered remorse for the plight of comfort women) caused concern for alliance managers on both sides of the Pacific. More recent statements from the Abe administration that the war apologies will stay in place are certainly a positive development, although the task of historical reconciliation is still a long way off. However, the Abe government should also redouble efforts in displaying its resolve to tackle the politically painful structural reforms that will determine the ultimate success of the economic revitalization strategy—popularly known as Abenomics. For “Japan to be back” success in the economic front is the first priority. But when Japan doggedly plays defense in agricultural liberalization, it undermines confidence in its ability to carry out bold reforms.
In order to grasp the importance of the TPP in the bilateral and regional agenda, we must also avoid overselling it. The TPP will do nothing to boost the credibility of America’s military deterrence in the region, will not help in healing the wounds of history, and will not be the main driver in many of the structural reforms that Japan needs to implement (for instance, in the labor market and health care). But it is certainly true that the TPP is an integral component of the American policy of rebalancing towards Asia, and Japan’s ability to exert international leadership by arresting the narrative of economic decline. A bilateral understanding on tariff liberalization would be a significant deliverable for this summit meeting and would also help reenergize the broader TPP talks. American and Japanese trade negotiators have engaged in marathon negotiations, but we are running out of time. The market access talks are important in their own right, but they hold a larger meaning in reassuring us that the United States will remain a fully engaged Pacific power and that Japan will leave economic stagnation behind.