Israel and Japan’s Rising Sun Relations

After nearly 70 years of cautious, arm’s-length relations, Israel and Japan have recently moved to significantly upgrade diplomatic and business ties. Over the past several years, the two countries have entered into a number of important political and economic agreements, transforming their once limited bilateral relationship into one more characteristic of allied partners. From a series of high-level dialogues on national security and cybersecurity to their first bilateral investment agreement, Israeli-Japanese relations are flourishing.

Despite Israel’s and Japan’s shared democratic values, open trade policies, complementary business and industrial environments, and close alliance with the United States, relations between the two countries have long remained strikingly underdeveloped. But today, three forces are driving their rapid improvement: fundamental changes in the global energy market, developments in Japan’s domestic political and economic landscape, and shifts in the distribution of geopolitical power. Together, these have led policymakers in both countries to push for closer cooperation. Although complex historical anxieties will continue to temper this change in foreign policy direction, Tokyo and Tel Aviv’s new “rising sun relations” mark a turn away from the isolationism that had come to define their bilateral ties since the end of World War II.

A NEW JAPAN

The origins of Israel and Japan’s rocky relations can be traced to the oil crisis of 1973–74, when the Arab nations of OPEC declared an oil embargo against the United States and a number of its allies, including Japan, in response to U.S. support for Israel during the Yom Kippur War. Japan, a resource-poor nation heavily reliant on oil imports, chose economic pragmatism over ideals and alliance interests, dissociating itself from U.S. policy in the Middle East and condemning Israel’s role in the war. Japan’s powerful industrial organization Keidanren even lobbied for an economic and political boycott of Israel. Although the government did not officially implement a boycott, many Japanese companies nonetheless refrained from doing business with their Israeli counterparts. The legacy of this de facto boycott has haunted diplomatic and trade ties ever since.

The origins of Israel and Japan’s rocky relations can be traced to the oil crisis of 1973–74.

Yet in recent years, Japan’s foreign policy calculus has changed. The first major driver of this change has been the transformation of the global energy market. OPEC’s influence has declined with the growth of alternative energy and the U.S.-led shale gas revolution, both of which have put downward pressure on oil prices and given rise to a more decentralized network of energy production. Since the 1980s—and in particular since the earthquake in 2011—Tokyo has been diversifying its energy sources in a concerted effort to free itself from dependency on oil imports. In 2015, for instance, it announced a long-term plan to transition from a national energy mix of 1.7 percent nuclear and 14.9 percent oil in 2013 to 20 percent nuclear and three percent oil in 2030. And with both its domestic population and industrial output in decline, Japan is seeing a decline in demand for energy. The country is less reliant on oil imports today than at nearly any time over the past half century: in 2000 Japan's petroleum consumption stood at approximately 6,000 barrels per day; last year it fell below 4,000. Now that Tokyo’s foreign policy interests are no longer subject to the whims of OPEC, it is able to pursue policies once considered untenable, such as building relations with Israel. 

As Japan’s energy sources have been transformed, so too have its domestic politics. The rise of Prime Minister Shinzo Abe—set to become the longest-serving prime minister in postwar Japan in 2019—and his administration’s “proactive peace” agenda (which calls for increased engagement in world affairs) have ushered in an era in which Japan is no longer willing to sacrifice its international prerogatives to guarantee its oil supply. Abe, elected with large majorities in 2012 and 2014, has fashioned a powerful political coalition that commands a supermajority in both houses of the Diet—a rarity in Japanese politics that has expedited the prime minister’s agenda.

The country’s current political alignment, underwritten by a strong leader and unified coalition, has allowed for the emergence of previously taboo debates concerning Japan’s place in the world. These debates have resulted in an official reinterpretation of Article 9 of the Constitution (which renounces war as a means of international dispute settlement) to allow the Japan Self-Defense Force to fight in defense of allies; they have also led Japan to proactively build strategic bridges with states once eschewed because of the country’s preoccupation with natural resource scarcity and antimilitary sentiments.

In short, Abe’s Japan is adopting a “new realism” foreign policy—a turn away from the country's post–World War II pacifist identity toward a more power-centric view of the international system—and reinventing itself as a “normal” middle power, ready to wield all available diplomatic instruments to secure its national interest. Expanding strategic relations with Israel, a country at the frontier of both security and technology, is a natural result of this drive for a more independent and influential international presence. And Israel’s reputation as a "start-up nation," rich with scientific know-how and technical expertise, harmonizes well with Abe’s economic agenda (“Abenomics”), which sees innovation as a key to generating growth.

Even as Japan’s domestic politics have freed up its foreign policy, a systemic shift in the global distribution of power has also driven Tokyo's realignment. As Western economies stagnate while industrializing economies continue to grow, and especially as China becomes a major world power, geopolitical influence is rebalancing away from the United States and Europe. Beijing, for instance, has increasingly sought to assert itself in the Middle East in recent years, jockeying for position in the vacuum left first at the close of the Cold War and then by a relatively coy U.S. presence under former President Barack Obama. Indeed, China has aggressively forged closer economic and political ties with the key players in the region, including Israel.

As part of this drive for regional influence, China has made big investments in Israeli infrastructure, such as the new harbor in the city of Ashdod and light rail projects in Tel Aviv, as well as in Israel’s high-tech sector, into which it has poured $10 billion over the past three years. This cooperation has opened the door for a political realignment between Beijing and Tel Aviv. In March, Israeli Prime Minister Benjamin Netanyahu styled Chinese-Israeli relations as a potential “marriage made in heaven.” In this, Washington and Tokyo may find common ground for concern, and whereas historically Japan faced the binary choice of accommodating OPEC’s demands or those of the United States, today it is willing to pursue an independent course. And as regional security concerns persist in both the Middle East and the Asia-Pacific—including ongoing reports about Iranian collaboration with North Korea on nuclear and missile technology—Japan increasingly sees Israel as a potential ally with shared interests.

A HISTORY OF SILENCE

After hitting a low point in the 1970s, Israeli-Japanese relations have been partially thawing since the 1990s. At the time, Japan was seeking to brand itself as a global player by facilitating peacemaking efforts between Arabs and Israelis while the Gulf War was threatening the stability of the Middle East. In the mid-1990s, Israeli Prime Minister Yitzhak Rabin and Japanese Prime Minister Murayama Tomiichi each became the first head of state from his country to visit the other's, and in February 1996, Japan for the first time sent abroad a peacekeeping force to Israel’s border with Syria. Economic ties between the two countries also warmed during this period. A delegation of the Keidanren visited Israel in April 1993, and an agreement to open an office of the Japan External Trade Organization in Israel was signed in 1995.

But despite these earlier efforts to build rapport, Israeli-Japanese relations remained limited until recently. The breakthrough came in the form of a May 2014 summit meeting in Tokyo between Abe and Netanyahu. Good chemistry between the two leaders ultimately resulted in a joint statement on their desire to“build a new comprehensive partnership.” The statement in turn birthed a host of corollary agreements and high-level dialogues on defense and cybersecurity, trade, and economic issues.

Cooperation has been most pronounced in security. Israeli and Japanese diplomats now routinely hold national security dialogues in Tokyo and Jerusalem covering strategy, counterterrorism, and military technology, and a bilateral exchange initiative between defense establishments geared at knowledge and skill transfer, first adopted in December 2014, has contributed significantly to building networks between personnel and solidifying relations between security apparatus. Since 2014, the two countries have held a series of ministerial dialogues on cybersecurity and in May issued a sweeping joint statement announcing a “Japan-Israel Innovation Partnership,” which will extend cooperation into joint trainings and workshops for officials, deepen the linkages between the countries’ public and private sectors, and forge new bilateral research and development networks. 

Israeli-Japanese economic relations have also been rapidly improving. High-profile visits to Israel by officials from Japan’s Ministry of Economy, Trade, and Industry resulted in a bilateral investment treaty, signed in May 2015. The treaty’s impact has been immediate: since its enactment, foreign direct investment from Japan to Israel has increased 20-fold, and leading Japanese technology companies, including Dentsu, Mitsui, Rakuten, SoftBank, and Sony, have invested and opened research facilities in Israel. Bilateral trade has spiked, too. Between 2010 and 2015, Israeli exports to Japan doubled to $1.5 billion, and in 2016, Japanese exports to Israel reached $2 billion, twice their level in 2000. More improvement is expected in the near future: in May, the third ministerial-level Japan-Israel Economic Dialogue resulted in the aforementioned joint statement as well as a memorandum of cooperation, which brings together Japan’s New Energy and Industrial Technology Development Organization and Israel’s Israel Innovation Authority—each country’s largest innovation-focused institution—to work together on cybersecurity, joint investment, and research into artificial intelligence and robotics.

HERE COMES THE SUN

Although Israeli-Japanese relations have developed to a considerable degree over the past several years, hurdles remain. Historical misgivings about investing in Israel remain pervasive throughout Japan, Inc. These will take time to overcome, as will Tokyo’s uneasiness about getting involved in the Middle East’s complex sectarian conflicts. In addition, there is still long-standing diplomatic friction over issues such as Israel’s policies in the West Bank, which the Japanese government has repeatedly criticized—a source of angst for Israeli elites. If Tokyo continues its criticism, its efforts to forge bonds with these same Israeli power brokers will likely receive significant pushback.

There are, finally, other risks that Japan must bear if it wants rapprochement with Israel. In developing relations with Tel Aviv, Tokyo opens itself up to a host of both traditional and nontraditional security risks that it has largely thus far avoided. In 2015, for instance, the Islamic State (also known as ISIS) kidnapped and eventually beheaded two Japanese citizens, in retaliation, it claimed, for the Japanese government’s pledge of $200 million in aid to countries fighting ISIS. This was Japan’s first up-close brush with Islamist extremism. The more it gets involved in the Middle East, the more brushes it is likely to have.

Indeed, despite blossoming Israeli-Japanese relations, in order to realize the full potential of bilateral cooperation, both countries will need to work toward overcoming the historical apprehension that has characterized their relations for over half a century. Otherwise, today’s sunny relations may turn cloudy once more.