Port row reflects fragility of U.S.-Japan ties

By S.P. Seth

SYDNEY (JP): When George Friedman and Meredith Lebard wrote their book, The Coming War With Japan, early in the decade, it created quite a sensation.

Its echo was heard once again last month when the United States banned ships belonging to some Japanese shipping firms from entering its ports.

This ban was because the companies had refused to pay fines imposed on them in relation to Japan's discriminatory or restrictive conditions of entry into its ports for foreign ships.

The news reports of this dramatic development had the familiar ring of similar reporting early in the decade about an imminent trade war between the two countries. But, over the last two years (until the recent shipping ban), such alarmist reporting had died down. This was due to the improved performance of the U.S. economy, some corrections in Japan's restrictive trade practices and an upgrading of the U.S.-Japan security relationship.

The enhanced U.S.-Japan security ties are apparently designed to protect against a perceived Chinese threat, which recently led China's President Jiang Zemin to tell the Washington Post (during an interview in Shanghai before his U.S. visit) that the Chinese leaders were on "high alert" over the U.S.-Japanese security alliance.

Although the Chinese threat is important common ground between Washington and Tokyo, it has not replaced the old Soviet Union as the new evil empire. Indeed, China is keen to forge a new strategic partnership with the United States to manage world peace. The United States has not yet written off China as its implacable enemy either. Official Washington policy is one of "constructive engagement" with China. The recent U.S. visit of President Jiang Zemin was intended as an example of "engagement" at the highest level.

Against this backdrop, even though the enhanced U.S.-Japan security relationship is essentially conceived against China, its contours are still not fully determined.

Unlike in the Cold War when the Soviet Union looked like a permanent fixture in U.S. political and military strategy, China does not occupy that position. During the Cold war, Japan was an indivisible part of U.S. Pacific strategy against the Soviet-led threat to the free world.

In this partnership, the U.S. quid pro quo for Tokyo's cooperation, was to allow easy access for Japanese goods into the U.S. market. This enabled Japan to concentrate on building its economic strength, without the need to develop its own independent defense -- prohibited in any case under its U.S.- devised pacifist constitution.

However, Japan's free ride on U.S. defense coupled with its recurring trade surpluses, became an important issue between the two countries from the mid 1980s. By the late 1980s and early 1990s, there was a corpus of literature in the United States (with equally virulent Japanese versions) signaling a serious downturn in their relationship.

There were two important reasons for this surge in mutual bashing. First, the continuing economic advantages to Japan, like easy trade access to U.S. markets, without reciprocal obligations. Second, the U.S could simply no longer afford unilateral trade concessions for Japan.

The U.S. economy wasn't doing as well as hoped and Japan was surpassing the United States with its growing trade surpluses and large investments in U.S. securities and other assets. Japan indeed became the United States biggest lender. Washington sought to correct this imbalance by insisting on managed trade with export quotas for U.S. products.

It also demanded increased Japanese financial contributions for U.S. troops stationed in Japan. No wonder their relations started to deteriorate, with things seemingly getting worse by the day.

But in the last couple of years the downward slide in their relations was not only arrested, but seemingly turned around for the reasons already recounted. However, the looming threat of a trade war resulting from the U.S. shipping ban has once again highlighted the fragility of the U.S.-Japanese relationship.

Even though the issue appears to have been resolved for the time being, through Japanese concessions, there are nevertheless many other cases of restrictive Japanese trade practices (so the U.S. claims) just waiting to surface at any time.

Indeed, the problems are likely to get worse if the conservative backlash against Prime Minister Ryutaro Hashimoto's economy liberalization package (difficult to implement at the best of times) were to stymie this initiative.

The U.S. is seeking entry into closed or restricted sectors of the Japanese economy like banking and insurance. Furthermore, if the recent troubles in some Asian economies were to propel Japan into further pushing its export drive into the United States (to make up for lost ground in Asia), it would spell even more trouble by exacerbating economic friction with the United States.

Therefore, despite shared U.S.-Japanese concerns about China, it is by no means certain that their trade friction will be diverted by strategic imperatives, as was the case with the Soviet threat.

There are important differences between the two situations. China, for one, is no Soviet Union in terms of its threat to the free world. Japan is also now a stronger country, and might not so easily submit to U.S. dictates.

The Unites States is no longer economically so powerful that it can afford an economic trade-off with Japan for important strategic gains. Japan will increasingly be required to be much more responsive and accommodating to U.S. economic interests.

This might be problematic as Japan has a strong conservative political and bureaucratic tradition of protracted negotiations with minimal concessions.

There is one important cementing factor for a U.S.-Japanese security alliance with China as its focus. This is that unlike with the Soviet Union, where Japan at times appeared an unwilling conscript in the U.S. cause, Japan does have some real fears about China's growing regional power.

Therefore, even though Tokyo doesn't want to make the China threat a self-fulfilling prophecy, it is keen to have an active American presence in the region to deter such a possibility.

And for that, it will have to pay a price both in military and financial contributions, including trade concessions.

But this can only happen if both the United States and Japan heed the warning by George Friedman and Meredith Lebard who wrote: "By pretending that there is nothing basically wrong in the relationship between our two countries, by pretending that we can go on this way indefinitely, they (the leaders in both countries) are permitting the tensions that are driving our two countries apart to develop beneath the surface, out of sight and utterly out of control."

The writer is a free-lance journalist based in Sydney.