For Abe, a Chance to Take Washington's Temperature

6 MINS READFeb 10, 2017 | 09:04 GMT
For Abe, a Chance To Take Washington's Temperature
Prime Minister Shinzo Abe's first formal visit with President Donald Trump will offer the Japanese leader a chance to gauge the depth of the U.S. administration's positions on the two countries' economic and security ties.

Japanese Prime Minister Shinzo Abe is bent on proving that Washington and Tokyo are better together. He will get a chance to advance that goal on Feb. 10, when he arrives in Washington for the first leg of a two-day summit with U.S. President Donald Trump. The following day, the two leaders will travel to Trump's Mar-a-Lago estate in Florida for continued discussions on a range of issues related to U.S.-Japanese economic and defense ties. For Abe, the summit is an opportunity to gauge the Trump administration's position and level of conviction on issues including Tokyo's currency policies, the U.S.-Japanese trade balance and Trump's call for a border tax on imports of Japanese products manufactured partially in Mexico or elsewhere outside the United States. Just as important, it is an opportunity for Japan's leaders to further court the administration with promises of investment into U.S. infrastructure and manufacturing — and thereby to temper some of Trump's criticisms of Tokyo and ensure continued U.S. support for Japan's economic and strategic interests in Asia.

In the months since Trump's election, the Japanese government has moved quickly to ensure that the new administration sees its relationship with Tokyo as serving core U.S. interests, even as Trump and his advisers seek to recalibrate those interests. Abe was the first foreign leader to meet with Trump after his victory in November. This week, he becomes only the second (following British Prime Minister Theresa May a week ago) to pay a formal visit to Trump since inauguration. Last week, Abe met with U.S. Defense Secretary James Mattis and promised to increase Japanese defense spending.

Tokyo has been tailoring its outreach around Trump's domestic goals. For example, Japanese authorities are reportedly formulating a plan —  known as the "U.S.-Japan Growth and Employment Initiative" — to create as many as 700,000 jobs in the U.S. through investments in infrastructure and related industries. The plan, a draft of which was shown to Reuters last week, calls for $150 billion in new Japanese investment, both public and private, into projects such as proposed high-speed rail lines in Texas, California and northeastern states, renovations of subway and train cars in major cities, joint research and development initiatives in robotics and artificial intelligence, cooperation in cybersecurity and space exploration, and more.

The draft also floated the possibility of Japanese investments in U.S. "infrastructure bonds," possibly under the auspices of Japan's Government Pension Investment Fund, which is allowed to invest up to 5 percent of its $1.14 trillion in total assets in overseas infrastructure development. (Currently, the fund directs only a fraction of that quota to such projects.) This approach would play directly into the Trump administration's own infrastructure plans, which will likely rely on both private investment and infrastructure bonds. It could also support Tokyo's search for alternatives to its quantitative and qualitative easing.

Meanwhile, Japanese companies have also made a show of increasing U.S. investment. In early January, for example, Toyota promised to spend $10 billion and create hundreds of jobs in the United States over the next five years.

Speaking Trump's Language

For Abe, publicly floating all the ways in which Tokyo can help the Trump administration achieve its domestic agenda serves several purposes: To begin with, it signals that Tokyo does not take U.S. support for granted, but rather will work proactively to make sure the White House sees its relationship with Japan as mutually beneficial, both strategically and economically. A number of bilateral issues have found their way into the Trump team's crosshairs, including Tokyo's alleged currency manipulation (Trump has singled out Japan, Germany and China on the issue), U.S. companies' lack of market access in Japan, the broader U.S.-Japanese trade imbalance and Japan's supposed free-riding on U.S. defense support. Effectively framing Japan as part of the solution, not the problem, could prove crucial to the Abe administration's efforts to ensure that Trump's criticisms do not turn into concrete punitive measures — or to blunt the impact if they do.

This strategy would also further Tokyo's long-term goal of forging a bilateral free trade agreement with Washington. The prospect of a such a deal was foundational to Japan's participation in the Trans-Pacific Partnership. The Trump administration has said it likewise hopes to pursue such a deal, but it is unlikely to do so without first extracting concessions from Tokyo over some of the grievances Trump has voiced. Tokyo has little room to maneuver in many of these areas, and political concerns make it keen to deflect U.S. pressure to open up Japanese sectors such as agriculture. As a result, Abe is reportedly planning to avoid free-trade talks altogether on this visit. (In fact, Japanese Trade Minister Hiroshige Seko is not accompanying Abe, officially because Trump's own commerce secretary has yet to be confirmed.) Instead, Abe is expected to push for a Cabinet-level economic dialogue that would ostensibly lay the groundwork for trade talks at a less heated point in the future.

Meanwhile, Japanese leaders have similarly been emphasizing the benefits of the U.S.-Japanese defense alliance. Building on Abe's promise to boost defense spending, Japanese Defense Minister Tomomi Inada pledged to support U.S. initiatives in Southeast Asia through enhanced defense cooperation and training exercises with South China Sea claimant states like the Philippines and Vietnam. Inada also expressed support for U.S. freedom-of-navigation operations in the South China Sea, but she ruled out active participation in them.

Accordingly, Abe's discussions with Trump will also certainly touch on U.S.-Japanese security ties and the larger question of Washington's role in the Asia-Pacific region. During Mattis' visit to Tokyo, which he wrapped up Feb. 4, he reaffirmed the centrality of the U.S.-Japanese alliance and called Japan a "model of cost-sharing, of burden-sharing" — a departure from previous comments by Trump, who has criticized Japan for not covering its share of the costs of hosting U.S. military personnel on the archipelago. But during his visit, Abe will still be seeking a formal affirmation from Trump of Washington's treaty obligation to defend Japan in case of conflict.

Mapping the Future of the U.S.-Japanese Relationship

Ultimately, by outlining a number of possible avenues for U.S.-Japanese cooperation, the Abe administration can test the waters in Washington to get a clearer sense of the Trump administration's core priorities — and, in turn, which combination of measures best matches those priorities. This, Tokyo hopes, will make it possible to clear up what it sees as the Trump administration's misunderstandings of the goals of Japanese monetary policy or the causes and consequences of the U.S. trade deficit with Japan. And if implemented, Tokyo's proposed U.S. investment plan would likely be unprecedented in scale in the history of Japanese investment in the United States — a sort of smaller Marshall Plan in reverse.

The unique uncertainties ushered in when Trump took office may have added urgency to Abe's moves to court and accommodate the new U.S. administration. Tokyo cannot afford to let festering concerns held by Trump and his advisers get in the way of the two countries' shared strategic interests. Indeed, such moves should also be viewed as an extension and elaboration of the long-term trend of deepening U.S.-Japanese ties in the face of China's growing military power and accelerated security competition in the Asia-Pacific region.

Still, despite the economic and strategic interests shared by Tokyo and Washington, it will not be easy to bridge the divide where their interests diverge. If the White House seeks corrective measures regarding Japanese currency policies that Trump considers manipulative, for example, Japan may think it has no choice but to stay the course in its search for an escape from its prolonged economic slump. Thus, while Abe's visit will likely do much to cement his relationship with Trump and open channels between the two administrations, it will not fully resolve persistent tensions built into the structure of the U.S.-Japanese relationship.

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