Monday, 30 January 2012
Japan, China and Korea: Territory versus Trade
Sunday, 11 December 2011
East Asian Free Trade Area is looking more likely!
This year has seen significant progress in negotiations, the outcome of which were only revealed at the ASEAN Plus Three summit in November. Early indications that an agreement might finally be reached occurred in August at the 14th ASEAN Economic Ministers Plus Three (AEM+3) Meeting in Indonesia. The final communication of which welcomed “the joint proposal by China and Japan, ‘Initiative on Speeding up the Establishment of an East Asia Free Trade Area (EAFTA) and Comprehensive Economic Partnership in East Asia (CEPEA)’.
Until this joint proposal by China and Japan on the future of an East Asian Trade Area, the whole process had been held hostage to the Sino-Japanese strategic rivalry. This deadlock was eventually broken by the worsening global economic situation and, relatedly, the United States bid to boost its flagging growth through exports which drove a return to Asia via the Trans Pacific Partnership. For China, the TPP is seen as particularly threatening as its intellectual property and investment protection requirements will pose a formidable barrier to joining – even if China were actually to be invited (which it is not). This new reality seems to have been enough to shift China’s priorities towards reaching an agreement in East Asia, even if that meant moving towards Japan’s position on issues of coverage and membership.
The outcome of this shift in strategic perceptions was the joint proposal by China and Japan calling for the East Asian Free Trade Area to cover goods, services and investment, i.e. an agreement which brings in Japan’s WTO-plus interests. Since the outset of negotiations on the EAFTA, Japan has been focussed on the investment related issues (and rather less interested in tariff liberalization). Since Japan has few tariffs left to cut, and those that remain are in the politically sensitive agricultural area, any EAFTA which focussed solely on tariff measures would not be of much interest to Japan politically. Specifically with regards to China, Japan has been unwilling to enter an agreement which does not address its concerns about its firms ability to confidently invest in the growing Chinese market — indeed, it is partly for this reason that the bilateral China-Japan FTA remains frozen. However, outside the bilateral negotiations and in the context of the EAFTA, China is willing to discuss Japan’s wider set of economic interests. This year Japan and China have jointly sponsored setting up three working groups to deal with trade in goods, services and investment respectively which will begin work in April of 2012, with the start of negotiations on the final text scheduled to begin in November of next year.
More importantly, the joint agreement virtually concludes the long standing disagreement over membership. China had been adamant about the EAFTA being limited to the ASEAN Plus Three process only, however it appears that the final agreement will include a wider membership than that. The East Asia Summit grouping of Australia, New Zealand and India is clearly the next logical step.
It is likely that Australia, New Zealand and India — each of whom have their own ASEAN + 1 Free Trade Agreement in place — would be brought into the new trade area via the so-called “ASEAN + +” institutional mechanism. While the set up of this mechanism is not yet finalized, it is clear that it will aim to “roll up” the series of ASEAN + 1 agreements. The framework is being negotiated at the ASEAN Plus Working Groups, which are considering rules of origin, tariff nomenclature, customs procedures, and economic cooperation. These will feed into the working groups on trade, services and investment to provide the single template agreement.
Yet there remain some major hurdles. Firstly, the terminology has not been settled, with both the EAFTA and CEPEA still being bantered around. This suggests that the Chinese bargaining position has not been dropped, and there may still be some tussles over the membership. Secondly, while the Japanese and Chinese leaders have directed the bureaucrats to start negotiations, political leadership will be required to sign the agreement into force. However, the Heads of Government only enter the process next year, and in the mean time another flare up in Sino-Japanese relations could put everything back into deep freeze.
Notwithstanding those issues, it is clear that the halting trend towards the realization of an EAFTA is progressing. While there will no doubt be more setbacks, an EAFTA now seems to be more a question of when than if.
A more polished version appears on the East Asia Forum here.
Sunday, 5 June 2011
How to waste an opportunity: Ira Kan
Saturday, 21 May 2011
Sino-Japanese relations: fleeting flirtation or long-term engagement?
This weekend (21-22 May) the leaders of China and Korea are hosted by Japan for the Fourth Trilateral Summit, the first such Summit since the triple disaster of March 11. As a part of this visit, Wen Jiabao and Lee Myung-bak will travel to Fukushima to demonstrate their nation’s continuing support of Japan’s reconstruction.
Indeed, both China and South Korea have already contributed significantly during Japan’s disaster response in the immediate aftermath of the crisis, providing emergency relief teams and the provision of material support. The large (and unprecedented) level of support that China offered, especially the prompt dispatch of a Chinese search and rescue team, has led some to posit that warming relationships between Japan, China and Korea may be the silver-lining to Japan’s national tragedy. Especially with regard to China, with whom Japan’s relationship slumped precariously after a fishing infraction turned into a territorial dispute in November of 2010, the quake represented for some a possible circuit-breaker.
Certainly there has been an improvement in the relationship at the societal level. China’s media commented very favourably about the Japanese people’s resilience and lawfulness under the extreme duress of the power, food and water shortages – not to mention failing communications and concerns about family members. The Chinese media wondered aloud if China could ever reach such levels of civility. That peers in Asia were viewing the Japanese societal response favourably was a story which was in turn picked up the Japanese media and became a source of national pride for the many Japanese doing it hard. At that moment the empathy and mutual respect between the Japanese and Chinese (and others around the world) was at its zenith.
Yet in the longer term it is very unlikely that the earthquake will mark a turning point in the Sino-Japanese relationship. This is because tensions in the Sino-Japanese relationship are due to more than societal distrust but the basic strategic interests and perceptions of the two powers.
In this context it worth remembering that in the aftermath of the triple disaster China’s full offer of a PLAN hospital ship and expanded rescue team were not accepted by Japan.
This refusal by Japan was due the fundamentally different strategic orientations of the two countries and a (reasonable) lack of trust of the Chinese military in Japanese policy circles, not to mention the political implications of inviting Chinese military personal into Japan to work next to the US forces under Operation Tomodachi. Japanese politicians too would have had some difficulty in explaining a major Chinese presence after recent and damaging disputes – especially over the export of rare earth (a subject that Kan has flagged for discussion during the Trilateral Summit). Japan already made clear its order of preference (and trust) during the crisis, and despite the positive appraisals of Chinese assistance in the media, the fact is that Japan accepted only limited Chinese assistance due to a fundamental differences and competing interests.
Even the initial societal level warming up of the relationship is starting to cool. The Chinese media is reporting negatively on the choice of Fukushima as feature of the Trilateral summit, while discussion is Japan about how to cope a regional order that China is increasing being able to influence and in which Japan will play a junior role is heating up. Opinion within Japan is divided. The influential journalist Yoichi Funabashi has been arguing that Japan must ‘cleave to’ China in the future, but he acknowledges that a reorientation towards China would require political courage – a commodity in desperately short supply.
There is therefore no reason to expect that Japan’s even weaker domestic political and economic situation after the crisis will help to improve the Sino-Japanese relationship in the long term. Rather, despite the current warming of ties at the societal level, the most likely course for this important relationship is unfortunately the reassertion of old and competitive patterns of interaction.
Joel Rathus is a recent PhD graduate from Adelaide University, an EAF scholar and a regular contributor to the East Asia Forum. His other posts can be found here.
Monday, 18 April 2011
Japan and territory, the cat is away?
Alot has already been noted on China's positive and friendly response, more than phone calls, china sent to Japan personnel to help with the disaster in the same way that Japan had sent personnel (JSDF) to China to help during their earthquake in the West. (http://www.eastasiaforum.org/2011/04/15/opportunity-in-crisis-sino-japanese-relations-after-the-earthquake/)
Korea has also been sympathetic. But the Korea defense establish has taken the opportunity to press forward its claims on the takeshima/dokdo islands. see,
http://www.asahi.com/politics/update/0413/TKY201104120653.html?ref=rss
http://www.asahi.com/politics/
http://rss.asahi.com/click.
Saturday, 9 April 2011
Give a man a fish: Japanese fisherman becoming bureaucrats?
More curiuosly, the local government decided to hire of the fishermen out of work as local government officials for one year. I have no idea what they will do, neither do they.
Compensation is one thing, but taking these men out of the workforce for one year to twiddle their thumbs is not a solution - although in the short term more boots on the ground for reconstruction may not be a bad thing.
http://www.asahi.com/politics/update/0409/TKY201104090353.html?ref=rss
Thursday, 10 March 2011
Unfortunate event in East China Sea
While Chief Cabinet Sect. Edano has noted with concern the development of CNOOC going into the area to start production, he is waiting before responding.
I think Maehara would have picked up the phone and starting making a fuss already.
http://www.asahi.com/politics/update/0309/TKY201103090225.html?ref=rss
Tuesday, 8 March 2011
Maehara Resigns
Initially I expected he would fight off the charges, which are frankly a little ridiculous. If Ozawa can fight through decades of scandal, then Maehara certainly could whip this obviously minor case.
However, it is clear that Maehara is in for the long game (perhaps a little too obviously!). His decision to steep down reflects his belief that Kan will not be able to win the next election, which is now more likely to be called than ever.
Evidence: on the way out, Maehara very statesman-like said "an election would be for the national interest" - here.
Sunday, 27 February 2011
Gillard to Tokyo: pushing on a string?
The major issue which both Australia and Japan would like to be able to resolve is the Free Trade Agreement negotiations. These negotiations have been tortured, with liberalization of agricultural goods being the chief problem. The negotiations, which began in 2007, were most recently this February and marked a return to the table after nearly ten months hiatus. Yet the official negotiators from Japan and Australia were still unable to make a break through, prompting Trade Minister Kaieda Banri to call for the negotiations to be resolved at the political level. This is an appropriate response, as the Agreement was initially proposed by Prime Minister Abe Shinzo as part of a political calculus of the benefits of such an agreement to both countries. It is in this context that Gillard is making her four day long visit to Japan, a visit aimed to resolve at the political level the issues still outstanding in the FTA.
But while success would be quite a coup for either leader, there are good reasons to doubt that visit may be in vain.
The DJP is imploding over the issue of trade liberalization. Kan Naoto has been leading with a concept of “re-opening Japan”, the flagship of which has been the joining Trans-Pacific Partnership. It is important to understand that Japan-Australia FTA is perceived as a litmus test for the viability of including Japan in the TPP process. Thus Japan’s membership in the TPP will come only when others are convinced that Japan is serious about comprehensive liberalization of trade – including the political sensitive agricultural sector.
But already the Party has split on the TPP issue. The former Minister of Agriculture, Forestry and Fishery Yamada Masahiko is leading a group of parliamentarians bitterly opposed to the TPP. The group, which is called the “Serious Consideration of the TPP”, is nearly 180 Diet-men strong and announced its establishment on the 24 February. Moreover, the Group has organized a series of public hearings on the dangers of the TPP led by a prominent economist Uzawa Hirofumi which directly undercuts the Kan administration’s public information session in the rural regions which address the benefits of agricultural reform. The opposition to the TPP is also a stalking horse for opposition to an Australia-Japan FTA which includes agriculture. Indeed, Yamada Masahiko (Ozawa faction) is strongly opposed to such an FTA and has written publicly about the costs of signing onto an FTA with Australia.
Kan’s leadership of the DPJ is also in question. While there is no obvious challenger to leadership of the Party, the most recent public polling showed low support for the Kan administration (21%). The fact that Kan Naoto might well lead the Party to defeat in the next election has made it difficult for Kan to prevent individual parliamentarians from taking up local issues at the cost of national strategy. While the announcement of an FTA with Australia, as a prelude to joining and eventually acceding to the TPP, might help Kan somewhat recover political momentum, it is unlikely to make a major difference and as such Kan is likely to focus his efforts and what remains of political capital elsewhere. Moreover, although the current administration wishes to reverse the current situation of rural votes (which overwhelming, even passionately oppose FTAs) holding a disproportionate influence (a rural vote can be worth an ‘unconstitutional’ 2.5 urban votes), were an election to be called it is likely that the DJP would lose its majority and hence government.
In conclusion, it is unlikely that Kan Naoto and the leading DPJ have the political will (or coherence) to be able to meet the expectations of Julia Gillard and the ALP on the degree and type of liberalization within the FTA. Rather, the summit is likely to produce an agreement on Japanese investment into Australian rare earth and some other bureaucratic matters (replacing Mclean).
Sunday, 13 February 2011
We don't owe you anything
Reason: Because China asked Japan for compensation.
This response is due to the Japan Coast Guard recent delivery of a demand for compensation to the (now heroic) Capt. Zhan.
Still, Ma is tame choice for a response. At least China did not wheel on the Ultimo Ratio Regis known as Spokeswoman Jiang Yu (scary - watch her in action here).
http://www.asahi.com/politics/update/0213/TKY201102120264.html?ref=rss
Then who is the b*tch?
Maehara adds, "But those islands are so ours, boy-o"
http://www.asahi.com/politics/update/0213/TKY201102130029.html?ref=rss
Tuesday, 1 February 2011
Japan and Australia FTA resumed
More interesting, after Kevin Rudd trip to Japan last year and the positive sounding he got on the FTA, there is evidence that Japan is trying serious to get the negotiations up.
Maehara Seiji in his recent speech to Diet on Foreign Policy (here) called for early conclusion to negotiations with Australia. Maybe by the end of this year we will have the framework agreement in place.
Tuesday, 19 October 2010
Yasukuni calms situation (reverso-land post)
Friday, 1 October 2010
Senkakus, Japan public rattled
It is no longer just the usual right-wing hacks which are calling China a threat and demanding a more robust response to China’s rise, but now also the main stream which is moving into an anti-China mood.
Newspapers: The left of center Asahi Newspaper run nearly five pages of its Saturday issue with the focus on Japan’s failure to stand up to China. Yomiuri has been averaging about the same of the last week, although less hawkish that than Asahi.
TV: The popular movie director Beat Takeshi joined the chorus on Newscaster on Saturday 25th, leading discussion on China as threat together with his guests. Newscaster probably matters more for public opinion than NHK in certain sections of the less educated in Japan. Interviews with Japanese reveal that most are unhappy with their government's handling, and would prefer an more robust response in the future. Statements of fear and anxiety towards China also are shown from everyday Japanese.
Street-level observations: At train stations and on the Shinkansen, electronic billboards flash the latest news about the Senkaku islands and people stop to look and voice concerns.
Official: Official results of Japan’s public sentiment towards major countries is due out in December and no major media have yet conducted an emergency poll. (still looking).
The results of a (highly unscientific) poll conducted in China on Sino-Japanese relations which revealled 93% of Chinese think the tension will be long term is being reported as news. A feed-back loop of 'they hate us, so we can not trust them' is starting up in japanese media.
Saturday, 11 September 2010
Australia: not worth it
Thursday, 26 August 2010
Japan's priorities shifting?
Friday, 28 May 2010
Whaling: No news is good news.
As the Australian reported, both Smith and Okada as Foreign Ministers emphasized the importance of not letting the issue affect the bilateral relationship. While this decision is no doubt a little foolish strategically - as Lowy's Cook noted today- this folly is offset but the genuine lack of interest in the issue by Japan as I have suggested earlier.
Evidence for this is the fact that 'Australia takes Japan to ICJ over Whaling' did not break on the main page of the Yomiuri Shimbun's online top stories for any length of time (3 hours perhaps), and was pushed out by the 3pm update by events in Franch, Iran and the NPT. There was a short piece by Singapore based journalist Okazaki (lifted from reuters sources I imagine) noting only the facts. Fishing around Yahoo news garnered few extra reports, three.
No doubt an opinion will be forthcoming, but I suspect that the focus will be events in court surrounding the Acid Milk Attack by Peter Bethune. I have not seen any television reporting of it yet.
Perhaps this event will prove a game-changer in the bilateral relationship between Japan and Australia. But it still seems unlikely to me.
Monday, 5 April 2010
Japan’s political vacuum, some thoughts.
As you can see, the DPJ has fallen from a high of 75% support (red) to 33% and the blue line of “do not support” has gone from 17% to 56% - implying that most Japanese have gone from optimism to pessimism about this administration (see also here). That was certainly the feeling on the ground last month, but why?
The poll result supports Tobias Harris’s argument that the problem with the DPJ and its popularity is Hatoyama himself. In response to the question, “who is the most suitable as Prime Minister?”, Hatoyama name comes not first, but sixth. Indeed, even more bitterly for the DPJ, the opposition LDP Masazoe Yoichi comes first at 29%. This result gives Masazoe further ammunition in his struggle to become Leader of the Opposition against the incumbent Tanigaki. Hatayama even scored lower than his Foreign Minister Okada, Transport Minister Maehara, and Deputy Minister Kan but none exceeded 10% approval in any case.
There are various causes of this decline, but management of the Global Financial crisis seems not to be one of them. Rather domestic issues such as the corruption scandals plaguing the DPJ (focused mostly on Ozawa but Hatayama himself is also under scrutiny) are center stage. Problems relating to the relocation of the US military base at Futenma are also important, as is postal savings reform.
But overall the problem is a lack of “getting things done” – indeed 44% of Japanese cited this as the biggest problem of the Hatoyama administration. So rather than focusing on a project such as the East Asian Community which may or may not “succeed” (and how to even measure that), Hatayama’s next few months ought to focus on getting a clear success. Given his domestic situation, there are opportunities and risks for other countries wishing to cooperate with Japan, but overall Japan’s biggest contribution to East Asia will be to get its ship back in order.
Monday, 29 March 2010
Lowy Linkage
http://www.lowyinterpreter.org/post/2010/03/17/Japan-Australia-relations-Signs-of-damage.aspx
http://www.lowyinterpreter.org/post/2010/03/23/Japan-Australia-relations-just-fine.aspx
http://www.lowyinterpreter.org/post/2010/03/24/Australia-Japan-relations-are-not-fine.aspx
A good exchange of ideas, and informative for all and sundry. Hurrah.
Sunday, 28 February 2010
Japan-India and Japan-China: Evidence of competition positive but mixed
A close look at high level meetings reveals that this explanation is flawed.
Source: MOFA Homepage, India and China Basic Information (Japanese).In particular, the years 2005, 2006 and 2007 saw less visits to China than would be expected. These years too also saw Japan and India sign onto a strategic framework with the US and Australia which clearly is driven by concerns at some level about growing Chinese power. To an extent we could characterize these years as the "balancing" years.
But it is also clear that this pattern is a aberration, the correlation between high level visits to China and India is high. And with the exemption of the years cited above, Japan-India and Japan-China high level visits move in virtual lock-step. Indeed, 2008-09 saw both sets of meeting fall back to the pre-Koizumi levels and balance.
This suggests that continual, long term interests, both strategic and economic, is what motivates Japanese top level diplomacy, and that striking a balance between China and India is one of those interests. While the short term of Koizumi is noticable, acting overly interested in one or either party is just not good diplomacy in the long term.
