Shinzo Abe: Japan's trade policy is not negotiable. (Image credit: AFP/Getty Images via @daylife)
Is the United States finally -- after fifty years of constant disappointment -- on the verge of blasting open the Japanese market? The Washington Post seems to think so. Under the headline, "Japan’s economic turmoil may provide an opening for the U.S.," the Post's international economics commentator Howard Schneider recently suggested that Japan was being propelled toward free-trade negotiations with the United States.
Not a minute too soon, you might think, given America's unemployment rate (which is more than twice Japan's) and the fact that none of the flashpoint issues of U.S.-Japan trade diplomacy in the 1980s -- not cars, not rice, not even financial services -- was ever resolved.
So is Japan really changing? Unfortunately, no. Underlying Schneider's argument is the same old wishful thinking that has constantly discombobulated American attitudes for generations.
Schneider keyed his article to the fact that Japanese Prime Minister Shinzo Abe was scheduled to meet President Barack Obama in Washington last Friday. As a newcomer to the Japan story, Schneider can be forgiven for imagining that big things might have been afoot but in reality such meetings never live up to American expectations. They are merely a rite of passage for new Japanese Prime Ministers and, irrespective of what the usual sources tell the American press, Japan's mercantilist trade policy is not negotiable.
Of course, Schneider believes that "this time it's different." Tokyo, he says, needs America's natural gas. Moreover it craves American support in the Sino-Japanese dispute over the Senkaku/Diaoyu islands.
Thus for the first time in generations Washington has the Tokyo tiger by the tail. Sounds great -- until you look at the facts. In reality Tokyo has never been less in awe of Washington or less in need of American policymakers' help. Let's take energy first. To say the least there is little evidence on the ground in Japan that Japanese officials feel the least bit dependent on America for energy supplies. For a start the U.S. oil majors -- giant corporations that have a large footprint in most of the more important gasoline markets of the advanced world -- are nowhere in Japan. Chevron and ConocoPhillips have long been almost completely excluded. As for ExxonMobil, it once had a toehold but under the weight of unreasonable regulation and a generally hostile attitude to foreign corporations, it has now pulled out and the Japanese rights to its Esso and Mobil brands have been taken over by Tokyo-based TonenGeneral. The strongest international major in Japan is Royal Dutch Shell but even it is marginalized as its participation is limited to a minority stake in Tokyo-based Showa Shell Sekiyu. Schneider may be right that Japan is set to import more natural gas but this hardly means it has to go hat in hand to Washington. After all, from a Tokyo point of view, American natural gas seems an awfully long way away, and the transportation costs alone would appear to be a deal breaker. In any case where basic commodies are concerned, Japanese officials insist on holding the whip hand and they enjoy nothing more than playing off countless suppliers against one another. In this sense the United States seems far less important to Tokyo than say Saudi Arabia, Indonesia, or even Iran. In fact Japanese officials have long cultivated particularly good diplomatic relations with the world's energy exporting nations, not least the Muslim world.
Now for the Senkaku/Diaoyu dispute. Everyone in Washington seems to think the Chinese and Japanese are on the brink of war. And yes, of course, at a superficial level Sino-Japanese relations seem bad. Many ordinary Chinese are genuinely hostile to Japan. Meanwhile a tiny, if visible, minority in Japan has been staging anti-Chinese demonstrations. But neither Japan nor China is exactly democratic in spirit, so the feelings of ordinary people count for little in influencing the key bureaucracies that steer their nations' course. Certainly if you look below the surface at how the Beijing and Tokyo establishments deal with one another, relations could hardly be better (consider, for instance, the two nations' ties in trade and technology transfer -- ties that are among the closest of any two nations in the world).
It should be noted too that there is less to the hotheads' rhetoric than meets the eye. The fact is that protagonists on both sides keep the discussion within "thoughtful" limits. Thus the Chinese show remarkable discretion in avoiding taboo issues that really would anger Tokyo. Top of the list of never-discussed issues is the Japanese government's persistent refusal to compensate Chinese citizens (as well as countless citizens of other nations, not least the United States) for Imperial Japan's wartime atrocities. The Japanese government has not paid a penny even in the case of the so-called comfort women, whose grievances gained such prominence a few years ago. As for other victims, they may be long gone but millions of their heirs are still alive and have solid claims. In reality, it is understood throughout East Asia that Tokyo does not brook discussion of the compensation issue and expects officials in every regional capital to rein in activists. (Even Beijing cooperates and throws anyone who raises the subject in jail.) Journalists on all sides, not least in the United States, are also expected to button their lip. As the late, brave Iris Chang learned to her cost, the Japanese establishment cracks down hard on anyone who doesn't cooperate.
On the Japanese side too, there is much less to the protests than meets the eye. Certainly if Japanese activists were serious about making trouble for Beijing, they would be less interested in spouting empty rhetoric about a few remote, utterly uninhabitable islands than in cutting off the Chinese military's access to high-tech components, materials, and machines. Such supplies are essential in building a state-of-the-art defense and Beijing sources them largely from Japan (by contrast the United States withholds them). Tokyo's willingness to equip the People's Liberation Army is in fact one reason why Japan, with little more than one-third of America's workforce, is by far China's largest source of imports (as the China page of the CIA Factbook testifies, China at last count spent 65 percent more on imports from Japan than from the United States).
If Schneider is really interested in telling the American public what is going on in Japan, a plethora of opportunities await him. He could start by inquiring why the U.S. energy industry's footprint in Japan is so light. He might also ask why Japanese leaders seem so relaxed about arming China. And if he is angling for the journalistic equivalent of a Purple Heart, he might inquire why Japan's not-a-penny war compensation policy has received so little attention in his own newspaper.
Eamonn Fingleton is the author of In the Jaws of the Dragon: America's Fate in the Coming Era of Chinese Hegemony.
