Healing More Important Than Dealing in The Pacific

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Vice President Joe Biden’s visit to South Korea, Japan, and China during the first week of December was to have been about bilateral issues with each country, and the Trans-Pacific Partnership (“TPP”) with South Korea and Japan. The agenda, however, was hijacked by an urgent national security concern as Japan and China tested each other’s perceptions of sovereignty over contested islets and air space, and the United States reasserted its defense alliance with Japan by sending B-52 bombers into the area over which China unilaterally announced restrictions. Nonetheless, Biden did not abandon the original trade agenda in his meetings.

While Japan and China are contesting sovereignty over islets, so are China and South Korea over protruding rocks. Moreover, South Korea’s President Park has refused to proceed with a planned summit with Japan’s Prime Minister Abe because of Japan’s apparent refusal to address sufficiently, as Koreans see it, slave labor and “comfort women” during the Japanese Occupation and World War II.

There is growing alarm in the region about possible military escalation, born of historically-based mutual suspicion and hostility. The region lacks effective foundational institutions bringing Japan, South Korea, and China to a common negotiating table. They have not really settled World War II, and each of them carries grievances toward the others. All view history their own way.

The United States remains a critical broker preserving peace in the region, a role Biden was quick to invoke on his tour’s first stop in Japan. But the United States also shares a historical responsibility for the problems, which stretch back to World War II and even before. Whereas in Europe the Marshall Plan rescued and revived economies throughout Western Europe while American Occupation helped Germany reconcile with its foes and restore its place in the family of nations, in Asia the United States cultivated Japan as a bulwark against Soviet and Chinese Communism, did little to integrate the region and nothing to encourage Japan to reconcile with the countries it invaded and the peoples it conquered. Today, Japan is regarded throughout Asia with doubt and suspicion, creating an excuse for China to flex new muscles and South Korea to complain of inadequate apology and reparations.

Until Japan’s history, as seen especially by China and Korea, is fully acknowledged by Japan, Japan’s conflicts with China and South Korea will persist and grow more dangerous. Enhanced international trade is not a panacea, but it could provide the foundational institutions that could transition Japan into an accepted leadership role commensurate with its economic importance. Regrettably, the TPP is not likely to be the needed institution, and the United States will not be a successful broker until it fully appreciates the Chinese and Korean grievances.

TPP And China

Economic and trade relations often defer or overcome national hostilities. South Korea, Japan, and China are mindful of the importance of trade. They are heavily invested in each other’s economies as most FDI remains regional, and they are negotiating a trilateral free trade agreement, albeit fitfully, notwithstanding their security disputes.

The TPP, the central trade and economic item on Biden’s agenda, does not relieve any of the tensions among the three key countries in the region. To the contrary, the TPP was conceived originally to exclude China, and neither South Korea nor Japan was among its founders or early champions. South Korea has not yet joined the negotiations formally, even as the United States Trade Representative has declared the talks almost completed, and the United States is still pressuring Japan to satisfy the United States on old issues such as automobiles and agriculture, which Prime Minister Abe seems to welcome for domestic political reasons.

The small Asian countries that drew the United States into the TPP negotiations were reacting to the growth of Chinese power in the region. Their instincts were to combine their modest capabilities with the United States and effectively surround China, much the way George Kennan imagined “containing” the Soviet Union. It was not difficult to sound principled in excluding China as a non-market economy that could not satisfy the elevated standards of a twenty-first century trade agreement, but no one could miss the political overtones.

China responded cautiously, understanding the Cold War overtones but not wanting to appear as an opponent to trade liberalization. The United States, recognizing the potential contradiction between its support for China’s rapid development as an economic power and its exclusion from the TPP, declared that a China willing to embrace the new disciplines of a new agreement would be welcome.

China signaled an interest in the TPP during the Strategic and Economic Dialogue with the United States in July, and at the end of November, just as the United States repeated its objective to complete the multilateral deal by the end of 2013, China decided to call the apparent American bluff, indicating it wants to join the talks. With Japan admitted to the talks only in July and South Korea not yet formally in the multilateral negotiations, the United States would not seem to be in a position to deny China an opportunity to join. Moreover, as China is South Korea’s leading export market, South Korea probably would prefer to join only if China were included.

The United States is finessing the dilemma by postponing South Korea’s participation until after the conclusion of an agreement with the other countries. However, the Korean postponement has been based on an expected conclusion to the talks by the end of 2013, which will not happen. The longer the talks continue into 2014, the more the United States will have to confront the exclusion of China.

The late and uncertain addition to the TPP of the three most important economic forces in Asia can only push back the TPP calendar. The further into 2014 the talks go, the closer looms mid-term congressional elections in the United States. As the elections approach, the legislative calendar will fade away. Meanwhile, the very existence of the TPP dilutes any improvement of relations among South Korea, Japan, and China because the larger framework does not encourage them to resolve their more particular differences.

Odds Long And Unlikely

The odds for the TPP ever to come to pass remain long and the risks for the United States in promoting high expectations for the TPP very substantial. The United States seems to have convinced most of the countries in Asia that once they agree to terms, the deal will be done. Therefore, the United States is pursuing a “gold standard” for trade agreements, in which American preferences and values over all international commerce, including especially intellectual property, pharmaceutical products, agriculture, and virtually every other disputed sector, would be codified in a trading bloc representing more than half the global economy as measured by gross domestic production (but only if China were included).

The United States is asking its negotiating partners to make dramatic compromises they have resisted in the past, whether in bilateral trade with the United States or in the multilateral forums of Uruguay and Doha. In exchange for these concessions, the United States is promising economic renewal and a new prosperity for Asia.

The United States never mentions any doubt about enacting the TPP. Unfortunately, the President of the United States cannot bring about the TPP without the cooperation and consent of the Congress of the United States. There, the necessary support is improbable. One hundred fifty-one congressmen of the President’s own party have signed a declaration complaining about the secrecy of the TPP negotiations, while a bloc of Republican congressmen oppose virtually any legislation proposed and promoted by President Obama. They are determined to deny Obama “signature achievements,” which is what a successfully concluded and enacted TPP would be.

The TPP And The Trilateral Agreement

Optically, it is easier for the United States to be in pursuit of a broad regional agreement than to promote a trilateral agreement in which it would not be a member. It would seem more in the U.S. interest to pursue an agreement that would enhance U.S. trade directly, rather than promote an agreement that could improve trade for competitors. Yet, the regional tensions that are generating fear of military accident or confrontation may be more important than both trade deals, and management of the potential trade agreements could help bring calm to the region.

The United States still looks to its alliance with Japan and hopes that Japan will assume regional leadership. Unfortunately, the promise of regional leadership is interpreted by some in Japan, including especially the current Japanese Government, as a need to break free from constitutional constraints that assign Japan a pacifist role in world affairs. Japanese nationalist sentiment seems wedded to a certain militarism that translates into confrontation, whether with China over islets or Korea over history.

Regional leadership for Japan commensurate with its relative economic prosperity and heft will not be accomplished through reassertions of conventional power because leadership requires trust. The American goal of Japanese regional leadership requires, above all, better Japanese relations with Korea and China. A trilateral free trade agreement can build a foundation for a new friendship which an American-led TPP cannot.

Relentless regional pursuit of the TPP is also dangerous for the United States because failure likely would erode American credibility and stature. Confidence in the United States could be shattered by a loss of confidence through an American failure to deliver on the promise. The United States, by contrast, would not be blamed were the trilateral agreement to founder, but could be cheered were it to help bring it about.

Strategically, achievement of a trilateral free trade agreement among China, South Korea, and Japan would be of greater value to the United States than a negotiated TPP that Congress declines to approve. It would focus Japanese energy on reconciliation with its neighbors, a process indispensable to a trilateral agreement. It would reassure China that the United States is not seeking its isolation, something the United States could never accomplish in Asia anyway. And it would strengthen the Asia region as a trading and economic partner of the United States.

A trilateral agreement will be very hard to make happen. The three countries involved have talked about it for a decade, and each has blame for the others for the continuing failure to make serious progress. The concerted efforts around the TPP, however, do not help. The American energy and leadership devoted to the TPP could matter if redirected, and would have a greater long-term benefit, for the United States and for the world. China integrated into the region, Japan reconciled with its neighbors, South Korea entrenched in a process of reconciliation and extending benefits derived from its free trade agreement with the United States: such an agreement might not achieve a free trade gold standard, but it could augur a political transformation for peace.

Links And Priorities

The military tensions in Asia are rooted historically. When the United States pushes back against new Chinese declarations about air space, it is doing the bidding of Japanese nationalists who want dealings with China to be confrontational Yet, the United States could not maintain its own regional peace-keeping role were it to accept the Chinese steps passively. Biden’s diplomacy recognizes the dilemma, but it would be far more successful, and more in the American interest, were it also to recognize the longer and deeper history. It then could comprehend, too, that the confrontation between Japan and China is not wholly distinguishable from the confrontation between Japan and Korea, nor between Korea and China.

The United States owes it to Japan, and to the region, to retreat from Cold War imagery and philosophies that acquit Japan of its past and protect present-day Japanese militarists. The United States owes it to China to be reliably and consistently inclusive, giving no refuge to Chinese expansionists who appreciate little more than Japanese amnesia that licenses their own aggression. And the United States owes it to Korea to recognize Korea’s colonized past. The United States could help broker peace in Asia by sacrificing its own short-term aspiration for an unlikely multilateral trade agreement and committing itself to the region’s internal needs, just as it did in Europe after World War II. The moment of highest tension could not be a better time to start.