Tags: Japan | US | trade | ambassador

We Ignore Japan at Our Peril

Thursday, 15 Aug 2013 07:52 AM

By Neal Asbury

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A few weeks ago, I wrote about the deepening rift between the United States and Japan, and the folly of appointing a completely unqualified Caroline Kennedy as the U.S. ambassador to Japan. If there ever was a time to have an experienced ambassador with solid credentials, it is now.

Just as the U.S.-led effort to create the multi-lateral Trans-Pacific Partnership (TPP) — the largest free-trade agreement in history — is gaining traction, which would open Asia for U.S. exports and create millions of jobs, U.S. union autoworkers have started delivering to Washington petitions demanding trade concessions. This on the very day that Japan formally announced it will join the TPP initiative, which would cover 40 percent of the global economy.

Writing for The Wall Street Journal, William Mauldin quoted U.S. Trade Representative Mike Froman, who suggested that "Right now all foreign penetration of the Japanese auto market is 6 percent, and so everyone believes there's a long way to go before we can really say the Japanese market is open. The concern with Japan isn't tariffs but 'a number of voluntary measures that have been employed over the years that have had an adverse effect on auto imports, whether it's from the U.S. or Korea or Europe.'"

The TPP is such an important trade initiative that we cannot allow auto unions to derail it. Instead of building cars that American consumers want, Detroit is worried that moves to eliminate U.S. tariffs will boost sales of Japanese cars.

The solution? Build better cars at competitive prices that will meet the demand of U.S. consumers with wages and benefits that can be justified. We can then export them, as TPP eliminates current trade barriers. The economic ramifications are enormous. Do we want Caroline Kennedy to manage this?

In my book, Conscientious Equity, I noted that burgeoning trade deficits put us in a tenuous position with countries like China and Japan. This threat looms as large as any military threat we face and may even present a weak spot where damage could be inflicted on us suddenly and devastatingly.

The U.S. goods trade deficit with Japan increased from $63.2 billion in 2011 to $76.3 billion in 2012, an increase of 20.3 percent. This underscores the powerful impact a free trade agreement with Japan would have, as expanding U.S. exports would dramatically reduce the trade deficit, or even reverse it.

Throughout most of the 20th century, Japan and the United States were among the world's largest economic powers. Together they account for over 30 percent of world domestic product.

Although Japan remains important economically to the United States, its importance has slid, as it has been edged out by other trade partners. In 1989, Japan was the largest source of U.S. imports and the second largest U.S. export market. By the end of 2009, Japan was the our fourth-largest merchandise export market (behind Canada, Mexico and China) and the fourth-largest source for U.S. merchandise imports (behind Canada, Mexico and China) and remained so in 2012.

And this comes on the heels of a report by the Council on Foreign Relations, which noted in the World Policy Journal the "rising threat perceptions of North Korea and China," including Pyongyang firing missiles over the Japanese mainland.

North Korea remains a big risk for Asia and the entire world as Kim Jong-un continues to engage in "nuclear brinksmanship." Japan is rightfully concerned about its security, and has launched Iron Fist, a ramped up military exercise to address these threats.

The danger is that if Japan no longer depends fully on the United States as a safeguard, Japan may begin accelerating its military preparedness, leading inevitably to an arms race with neighboring states, including China, North and South Korea and Russia. This would surely raise the spectrum of a potential armed conflict.

Since 1947, Japan's constitution has forbidden the formation of a traditional military force. The country has maintained only a Self Defense Force (SDF), the mission of which has been to protect the Japanese mainland. Even within these limitations, the SDF has performed a supporting role for U.S. troops based in Japan in exchange for promises of protection. Some experts now see this dynamic shifting.

The Council on Foreign Relation also suggested that "there are increasing concerns from within Japan that the United States might not always embrace its role as Japan's protector, should the political landscape in East Asia begin to crumble."

"There is some concern that the U.S. might not be there when Japan needs its support," said Yuko Nakano, research associate at the Center for Strategic & International Studies. "When there was a [North Korean] Taepo Dong missile launch in 1998, a conspiracy theory appeared in the Japanese press that the United States was aware of the launch but didn't inform Japan in a timely fashion. So yes, I think this is a concern of the Japanese."

If the looming threat of a trade war and possibly a real war in the balance doesn't get the attention of congressional leaders to appoint a credentialed U.S. Japanese ambassador, we may look back at this as a pivotal moment in the history when the United States failed to protect its economy and its peace.

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