The Pandemic Depression
The Global Economy Will Never Be the Same
On January 19, 1960, Japanese Prime Minister Nobusuke Kishi and U.S. Secretary of State Christian Herter signed a historic treaty. It committed the United States to help defend Japan if Japan came under attack, and it provided bases and ports for U.S. armed forces in Japan. The agreement has endured through half a century of dramatic changes in world politics -- the Vietnam War, the collapse of the Soviet Union, the spread of nuclear weapons to North Korea, the rise of China -- and in spite of fierce trade disputes, exchanges of insults, and deep cultural and historical differences between the United States and Japan. This treaty has lasted longer than any other alliance between two great powers since the 1648 Peace of Westphalia.
Given its obvious success in keeping Japan safe and the United States strong in East Asia, one might conclude that the agreement has a bright future. And one would be wrong. The landslide electoral victory of the Democratic Party of Japan (DPJ) last August, after nearly 54 years of uninterrupted rule by the Liberal Democratic Party, has raised new questions in Japan about whether the treaty's benefits still outweigh its costs.
Back in 1952, when an earlier security treaty (which provided the basis for the 1960 treaty) entered into force, both sides thought it was a grand bargain. Japan would recover its independence, gain security at a low cost from the most powerful nation in the region, and win access to the U.S. market for its products. Without the need to build a large military force, Japan would be able to devote itself to economic recovery. The United States, for its part, could project power into the western Pacific, and having troops and bases in Japan made credible both its treaty commitments to defend South Korea and Taiwan and its policy of containment of the Soviet Union and communist China.
But there was also much to be unhappy about, especially for the Japanese. This was an agreement negotiated between a victor and an occupied nation, not equal sovereign states. The Japanese government, which had never in its history accepted foreign troops on its soil, was now forced to agree to the indefinite presence of 260,000 U.S. military personnel at more than 2,800 bases across the country. Practical arrangements for the troops' stationing were left to an administrative agreement that did not require the approval of the Diet, the Japanese parliament. This gave the United States the right to quell large-scale internal disturbances in Japan. Against their better judgment, Japan's leaders were also forced to agree to recognize Chiang Kai-shek's Republic of China on Taiwan as the government of all of China. Meanwhile, the U.S. government made no specific commitment to defend Japan and retained the freedom to use its troops anywhere in East Asia.
The United States also came to have misgivings about the terms of the alliance. Under Article 9 of Japan's 1947 constitution, which General Douglas MacArthur had forced on the country, Japan renounced "war as a sovereign right of the nation and the threat or use of force in settling international disputes" and undertook never to maintain "land, sea, and air forces as well as other war potential." The U.S. government soon regretted this language: Japan could invoke it as an excuse to stay out the United States' future wars. Indeed, Japanese Prime Minister Shigeru Yoshida found ways to resist Washington's urgings to build up Japan's army. Not only had the United States undertaken to come to Japan's defense in case of an attack while Japan had no reciprocal obligation, but Japan insisted that its constitution prohibited it from exercising the right of collective self-defense and thus from ever sending troops or vessels to help Americans in combat operations.
By 1957, buoyed by the country's rising prosperity and new nationalism, the postwar generation of Japanese college students, Marxist intellectuals, and labor unionists, among others, started to chafe at the inequalities embedded in the treaty. The U.S. troops living on bases in Japan had brought crime and caused accidents; the agreement still risked dragging Japan into war with China or North Korea or the Soviet Union. Kishi staked his political life on improving the agreement's terms for Japan. After three years of hard bargaining, a revised treaty, which could be abrogated after ten years, was hammered out. The U.S. government committed to defending Japan if it was attacked. It agreed to consult Japan in advance of any major changes in the deployment of its troops or equipment or in its use of its bases in Japan for combat operations.
Although the revised treaty improved Japan's leverage, Japanese left-wingers, among others, used the ratification process to express their disapproval of the entire U.S.-Japanese alliance system. Kishi battled his left-wing critics for months, melees broke out in the Diet, and thousands of Japanese protested in massive street demonstrations. On May 19, 1960, Kishi suddenly forced a vote to ratify the treaty in the lower house, calling on the police to remove his Socialist opponents for staging sit-downs and blocking the Speaker from calling the Diet to order. Too clever by half, the maneuver aroused even greater and more violent street protests, and a state visit by U.S. President Dwight Eisenhower, timed to coincide with the revised treaty's ratification, had to be canceled. The treaty was eventually approved, and it was ratified on June 23, but Kishi announced his resignation the same day. The Liberal Democratic Party, the dominant conservative party, had learned that it could not impose its will on the opposition on matters of war and peace.
The road ahead was bumpy, too. In the late 1960s, Japan was wracked by violent demonstrations opposing the United States' war in Vietnam. In 1971, angered by Japan's huge export surplus with the United States and by what he considered a betrayal by Prime Minister Eisaku Sato -- Sato had apparently promised to curb the flood of Japanese textiles into the U.S. market in exchange for the return of U.S.-controlled Okinawa to the Japanese -- President Richard Nixon delivered three blows to Japan. First, after pressuring Tokyo to support the government in Taiwan for years, Nixon, without any prior notice, sent his national security adviser, Henry Kissinger, to Beijing to discuss rapprochement with China. Then, again without warning, he took the U.S. dollar off the gold standard, causing the yen to surge in value and thus severely hurting Japan's export-led economy. Finally, citing the U.S. Trading With the Enemy Act of 1917, Nixon imposed a ten percent tax on imports from Japan. Those three actions, which are known in Japan today as "the Nixon shocks," shattered the image of the United States as Japan's benevolent protector.
The 1980s were ever more fractious. Growing concerned about continuing trade deficits, the dominance of Japanese companies in many U.S. markets, and the trade barriers that kept U.S. products out of the Japanese market, the U.S. government in 1985 forced an agreement on Japan that would limit the import of Japanese computer chips to the United States. The next year, it levied a fine on Tokyo for violating the agreement. Other countermeasures followed. On July 2, 1987, members of the U.S. Congress smashed a Toshiba radio with sledgehammers in time for the evening news to protest revelations that Toshiba had sold classified technology to the Soviets. A small group of revisionist writers spread the notion in the U.S. mainstream media that Japan was hell-bent on destroying the United States' industrial sector; according to this argument, Japan wanted to win through unfair trade practices what it could not win in World War II. By the end of the decade, wariness of Japan was intense. In a 1989 Gallup poll, 57 percent of U.S. respondents said they considered Japan to be a greater threat to the United States than the Soviet Union. It took the bursting of Japan's economic bubble and Saddam Hussein's invasion of Kuwait in 1990 to keep tensions between the United States and Japan from getting any worse.
When Bill Clinton came to power in 1993, he, as well as many members of his administration, had been much influenced by the notion that Japan was the enemy. But the value of the security treaty between the two countries was brought home to Washington after North Korea's testing of nuclear weapons in 1993-94 and the Taiwan Strait crisis of 1996. In a 1996 report, Joseph Nye, then the assistant secretary of defense for national security affairs, succeeded in getting a joint statement adopted that committed the United States to keeping 100,000 troops in East Asia and reaffirmed the United States' resolve to defend Japan. Still, there were misunderstandings and gaffes: President Clinton shocked the Japanese when he visited Beijing for nine days in 1998 and declared China a strategic partner, without so much as stopping for a day in either Tokyo or Seoul. New guidelines for defense cooperation were adopted in 1997-98, spelling out details about the United States' access to rear-area support in Japan and to supplies and airports in the event of an emergency. After North Korea test-fired a two-stage ballistic missile over Japan in 1998, Tokyo agreed to cooperate with Washington and share technology on anti-ballistic-missile defense.
COSTS AND BENEFITS
Despite some frictions, both the United States and Japan have found that the benefits of the treaty have generally outweighed its costs. Over the years, the treaty has evolved from being a statement of intentions to being a reasonably credible operating system. Certainly, the benefits for Japan always remained clear. Falling under the U.S. nuclear umbrella freed up Tokyo to carry out the so-called Yoshida Doctrine and focus on the country's economic growth; without the need to acquire nuclear weapons, Japan could almost always hold its defense budget to less than one percent of GDP. The treaty also preserved Japan's access to the U.S. market, which served as a life vest in a sea of sometimes serious trade disputes. All of this gave Japan a chance to nurture the fragile roots of parliamentary democracy, turning them into a robust and durable system.
For the United States, the treaty's long-term benefits included having the equivalent of an "unsinkable aircraft carrier" (as Japanese Prime Minister Yasuhiro Nakasone put it in 1983) to carry out its forward strategy in East Asia. The agreement gave the U.S. Navy a strategic advantage in observing the movements of Soviet warships and, in case of war, an easy way to bottle up the Soviet fleet in the Sea of Okhotsk. And Washington benefited from the comparatively low cost of basing troops in East Asia, which was especially advantageous in this case because Japan was committed to being a generous host.
Over the years, Japan has also taken a number of steps to alleviate the Pentagon's concerns that it was free-riding on the United States for its security. In 1977, it took steps toward making its equipment and communications interoperable with those of U.S. forces in the country, and it started to engage in joint planning and training exercises. In 1983, U.S. President Ronald Reagan and Nakasone reached an agreement under which Japan would exclude from its ban on arms exports defense technology exports to the United States. Japan has also gradually overcome its reluctance to send troops abroad. In 1992, after having sat out the Persian Gulf War, it passed legislation allowing its troops to participate in UN peacekeeping operations. Since 1992, Japanese troops have engaged in such missions in Cambodia, the Democratic Republic of the Congo, East Timor, Mozambique, the Palestinian territories, and Rwanda. From 2001 until mid-January this year, Japan kept naval vessels in the Indian Ocean to supply fuel to coalition forces fighting in Afghanistan; it also committed 600 troops to Iraq (albeit in a relatively peaceful zone), and it has (if grudgingly) allowed U.S. nuclear-powered vessels to dock at Japanese ports. Japan now has the seventh-largest military budget in the world.
One issue that remains sensitive in the relationship is nuclear weapons. Because of its understandable allergy to all things nuclear, after the bombings of Hiroshima and Nagasaki in 1945, since 1960 Japan has insisted that no U.S. nuclear weapon could be based on its territory. In 1967, Prime Minister Sato unilaterally declared his now famous three principles against nuclear weapons: Tokyo would not manufacture, possess, or introduce such weapons into Japan. This posed a problem for Tokyo. Could U.S. ships and planes carry nuclear weapons while in transit through Japanese ports and airports without violating that third principle? As it happens, a secret agreement signed in 1960 (and subsequently declassified in the United States) provided that they could. Still, the Japanese government continues to take the position that no such agreement exists: after all, it argues, an exchange of notes accompanying the 1960 security treaty required Washington to consult Tokyo prior to bringing any nuclear weapons into Japan, and Washington has never done so. Meanwhile, it is the policy of the U.S. government to neither confirm nor deny the presence of U.S. nuclear weapons anywhere at any time.
The new Hatoyama cabinet has appointed a high-level panel of respected outside experts to investigate whether secret agreements exist between the two governments. As of the time of this writing, the panel was close to announcing that such a deal does indeed exist -- thereby revealing that since 1960, successive Japanese governments have lied to the Japanese people. Other deals are also likely to be disclosed: deals about allowing the presence of U.S. nuclear weapons in Okinawa in times of emergency, about a joint-combat strategy in the event of a military conflict on the Korean Peninsula, and about an alleged payment by Japan to the United States to cover the costs involved in the formal return of Okinawa to Japanese sovereignty in 1972. Revealing the existence of these agreements at the time they were struck would have set off political fireworks; it might even have brought down governments. Today, the Japanese public has been sufficiently well informed by its media to take the news of their existence in stride. Still, the disclosures will only add to the cost side of the ledger for Japan.
A NEW LANDSCAPE
Japan's new prime minister, Yukio Hatoyama, is one of the more unusual and interesting Japanese politicians since the end of World War II. The scion of a political family -- his great-grandfather was Speaker of the House of Representatives, and his grandfather was prime minister -- Hatoyama studied engineering in both Japan and the United States, earning his Ph.D. from Stanford University. He once appeared to be headed for an academic career but then entered politics, in 1986, on the Liberal Democratic Party's ticket. In 1993, he co-founded the first Democratic Party of Japan, an opposition party that later absorbed or merged with several other parties to form today's DPJ. In the general election last summer, the DPJ's main foreign policy pledges included paying more attention to Japan's neighbors and withdrawing the Japanese ships in the Indian Ocean supporting the war in Afghanistan. Although the Hatoyama cabinet has already suffered a political scandal (involving illegal campaign-funding practices), the DPJ and its allies hold sufficient votes in both houses of parliament to retain power for a full four-year term.
But the U.S. government has been slow to adapt to the new political horizon in Tokyo. Hatoyama appears to want to reduce the U.S. footprint in Japan. In November 1996, he wrote in the monthly Bungei Shunju that the security treaty should be renegotiated to eliminate the peacetime presence of U.S. troops and bases in Japan by 2010. Hatoyama's political philosophy includes a vague concept of yuai (brotherhood) among neighboring nations. And at times he has spoken of forming an East Asian community that would exclude the United States. Americans who know him are quick to assert, however, that he is not anti-American but he believes in a more equal relationship.
The size and impact of the U.S. military footprint in Japan today is almost surely going to be a bone of contention in the months and years ahead. There are still some 85 facilities housing 44,850 U.S. military personnel and 44,289 dependents. Close to 75 percent of the troops are based in Okinawa, an island a little less than one-third the size of Long Island. Their presence is a continuing aggravation to local residents. In 2008, Okinawa Prefecture alone reported 28 airplane accidents, six cases of water pollution from oil waste, 18 uncontrolled land fires, and 70 felonies. And this is to say nothing of the emergence of red-light districts near the bases. U.S. military authorities are quick to point out that the crimes committed by U.S. soldiers can happen anywhere and that they occur at the hands of U.S. troops at the same rate as among comparable cohorts. This is beside the point, however: the Japanese who read reports of such crimes are wondering if the benefits of having foreign troops in their country outweigh the costs.
One particularly galling issue for the Japanese is the matter of "host nation support," or "the sympathy budget," which amounts to between $3 billion and $4 billion per year. Back in 1978, when it was eager to head off criticism from Washington for its mounting trade surpluses, the Japanese government agreed to pay for many of the labor costs of the 25,000 Japanese working on U.S. bases. Twenty percent of those workers, it turns out, provide entertainment and food services: a recent list drawn up by the Japanese Ministry of Defense included 76 bartenders, 48 vending machine personnel, 47 golf course maintenance personnel, 25 club managers, 20 commercial artists, 9 leisure-boat operators, 6 theater directors, 5 cake decorators, 4 bowling alley clerks, 3 tour guides, and 1 animal caretaker. As one DPJ Diet member, Shu Watanabe, put it, "Why does Japan need to pay the costs for U.S. service members' entertainment on their holidays?"
Soon after a 12-year-old Japanese schoolgirl was raped by two U.S. marines and a U.S. sailor in 1995, U.S. Defense Secretary William Perry set in motion a plan to reduce the U.S. military presence in Okinawa. The two governments worked out an implementation agreement in 2006. But rather than help resolve the problem, the deal triggered the first clash between Hatoyama and U.S. President Barack Obama.
One might have expected the two new administrations to hit it off admirably. Both Hatoyama and Obama came to power repudiating their predecessors and calling for change. For the past ten years, polls have consistently shown that more than 72 percent of Japanese view the United States favorably and that 80 percent of Americans consider Japan to be a trusted ally. Last fall, Obama's popularity in Japan exceeded 80 percent; Japanese readers have been snapping up his autobiography and collected speeches.
But both leaders have been extraordinarily ham-handed in their initial dealings. One issue involves the Futenma Marine Corps air base, in the town of Ginowan, in Okinawa, whose 80,000 residents are disturbed every few minutes by the deafening sound of U.S. aircraft taking off and landing. Under the 2006 agreement to reduce the U.S. troop presence in Japan, the Futenma base was to be relocated to the less populated Okinawan town of Nago, and some 8,000 marines and their dependents were to be transferred to Guam. The U.S. government demanded that Japan pay for a large portion of the moves' expenses. But Tokyo has repeatedly called for more time to study alternatives to the plan, and Hatoyama has said that Japan would not decide its position until May 2010.
Hatoyama is in a difficult position. His partners in the Social Democratic Party want the Futenma base out of Japan entirely and have threatened to leave the ruling coalition if the 2006 agreement is implemented. But he needs their support in the upper house, at least until July, when an election is scheduled to take place. Other opponents of the 2006 agreement argue that relocating the Futenma base to Nago could harm the coral reefs offshore and thus the future of the local tourist industry.
Okinawa is Japan's poorest prefecture; its history and culture are distinct from those of the rest of country, and its inhabitants feel like second-class citizens. They recall that Okinawa bore the brunt of the U.S. invasion of April 1945, and many believe that at the time the Japanese army forced Japanese soldiers to commit suicide en masse rather than surrender to the Americans. In a poll of Okinawan residents taken in November 2009, more than 52 percent of the respondents favored consolidating and reducing the number of U.S. bases in Japan, and more than 31 percent favored removing all the U.S. bases completely. Just under 12 percent wished to maintain the status quo, presumably because of the employment opportunities and rent that the U.S. presence provides them.
The U.S. military has largely treated Okinawa as its own fiefdom since 1945. Some 12,500 Americans died and 37,000 were wounded in the battle for the island. Until it officially reverted to Japan, in 1972, the U.S. military ran the place with a free hand, often defying the wishes of both the Japanese government and the U.S. State Department. In one incident, in 1966, the U.S. military secretly transported nuclear weapons from Okinawa to Honshu, Japan's main island, in flagrant violation of the 1960 agreement. The U.S. military also resisted Okinawa's reversion, and it continues to have a proprietary attitude about what goes on there.
Some knowledgeable observers, both American and Japanese, in government and not, believe that one good solution would be to combine the Futenma Marine air base with the U.S. Air Force base at Kadena, in an area that is less populated than Ginowan. But interservice rivalry stands in the way: the Marine Corps wants its own base. Other observers have asked, pointedly, why the U.S. Marines are in Okinawa in the first place. What threat is it that they would counter? But instead of answering such questions or addressing Hatoyama's concerns, U.S. Secretary of Defense Robert Gates showed up in Tokyo in October to demand that the 2006 agreement be implemented.
THE ROAR OF BLUNDERS
Washington should have given the new Hatoyama government more time to sort out its position on the issue of the Futenma base. More generally, the U.S. government should be celebrating the electoral victory of a strong second party in Japan as evidence that the seeds of democracy, which the U.S. government helped sow, have taken root. Doing so would mean no longer expecting Japan to meekly follow orders from the Pentagon. And it would mean recognizing the right of Japanese political parties to hold their own views on security matters. It is time for the White House and the State Department to reassert civilian control over U.S. policy toward Japan, especially over military matters. It was foolish for the Pentagon to try to bully Hatoyama just one month after he came to power into carrying out an agreement that the previous Japanese government had made with the Bush administration.
A wiser course would be to adopt what the Japanese call teishisei, "low posture." Washington and Tokyo should engage in a deliberate reconsideration of the entire range of issues raised by the security treaty. If there are strong strategic arguments for keeping the U.S. Marines in Okinawa, they should be aired publicly so that the Japanese people can decide if they are persuasive. The matter of the Futenma base is only a small part of the equation.
The U.S. government should respect Japan's desire to reduce the U.S. military presence on its territory, as it has respected the same desire on the part of Germany, South Korea, and the Philippines. It should be willing to renegotiate the agreement that governs the presence of U.S. troops in Japan, which to some is redolent of nineteenth-century assertions of extraterritoriality. It should be aware that, at the end of the day, Japanese voters will determine the future course of the alliance. Above all, U.S. negotiators should start with the premise that the security treaty with Japan, important as it is, is only part of a larger partnership between two of the world's greatest democracies and economies. Washington stands to gain far more by working with Tokyo on the environment, health issues, human rights, the nonproliferation of nuclear weapons, and counterterrorism.
In return for the removal of some U.S. troops and bases from its territory, the Japanese government should make far larger contributions to mutual security and global peace. It should explicitly state that it has the right to engage in operations of collective self-defense. Tokyo would be foolish to establish a community of East Asian nations without U.S. participation. It needs to work with Washington in the six-party talks on how to denuclearize the Korean Peninsula. The Japanese government should also stop protecting its uncompetitive agricultural sector and join in a free-trade agreement with the United States, an idea that has been kicking around for two decades and that the DPJ endorsed in its election manifesto.
Finally, in a grand symbolic gesture, President Obama and Prime Minister Hatoyama should visit Hiroshima together after the Asia-Pacific Economic Cooperation conference in Japan next fall and should issue a resounding call to end the manufacture and spread of nuclear weapons, a cause close to the hearts of both men. Then, they should visit Pearl Harbor and declare that no such attack should ever be carried out again. Such gestures could help finally soothe the wounds of war and cement U.S.-Japanese relations for decades to come.