Special Speech by Dr. Tsuyoshi Michael Yamaguchi,
Parliamentary Senior Vice-Minister for Foreign Affairs,
Council on Foreign Relations/Asahi Shimbun Symposium,
"Japan-U.S. Alliance after 3/11 and beyond"

December 8, 2011
Hotel New OTANI, Tokyo

Dr. Richard Haass, President of the Council on Foreign Relations,
Mr. Yoichi Funabashi, former Chief Editor of the Asahi Shimbun,
Distinguished guests,
Ladies and gentlemen,

Introductory remarks

I am greatly honored to be invited to this symposium hosted by the Council on Foreign Relations and the Asahi Shimbun and to speak today to this audience of eminent persons from both Japan and the United States. This symposium has been doing a great job of providing intellectual input toward Japan-U.S. relations. I am sure there will be lively discussions again this year to enrich our alliance.

After the terrible earthquake and tsunami this year, Japan received warm support from all over the world. But what was extremely special and moving for us was the assistance we received from the United States, including the deployment of an aircraft carrier under Operation Tomodachi. That operation touched the hearts of the Japanese people. On behalf of the Government of Japan, I would like to take this opportunity to express once again our deep appreciation to the United States.

The Present State of International Affairs

The international community at present is in a turbulent state. Europe is struggling to respond to an unprecedented debt crisis triggered by the situation in Greece. The United States is struggling, too, in the face of serious unemployment and an immense budget deficit. Meanwhile, China, India, and other emerging economies are rising to the fore. The "Arab Spring" has swept across the Middle East and North Africa region. A dramatic power shift is taking place around the world.

In this context, therefore, I do recognize the importance of the role Japan should play for the benefit of the world. This is so despite the fact that this year Japan has faced the triple tribulations of the earthquake, tsunami, and nuclear power plant accident.

The Outcomes of 100 Days of Noda Administration Diplomacy

We have clearly defined our foreign policy priorities for the first 100 days of the Noda administration. For the first 100 days, that is until the end of this year, our focus has been relations with the United States, China, Korea, India and ASEAN countries. We have tried to make our communication with these countries smoother.

First, we made sure that both Prime Minister Noda and Foreign Minister Gemba visited the United States first, and in fact, their visit to New York to attend the United Nations General Assembly was the first trip overseas for both of them.

Subsequently, Prime Minister Noda and Foreign Minister Gemba both visited our neighboring country, Korea. Leaders of both nations agreed to work hard to resume negotiations toward an Economic Partnership Agreement (EPA) at the earliest possible opportunity.

As for China, last month at the Japan-China-Korea Trilateral Summit Meeting as well as on the occasion of Foreign Minister Gemba's visit to China, agreement was reached to conclude within this calendar year the Joint Study for an FTA among Japan, China, and Korea. We are also working hard to achieve substantive agreement on the Japan-China-Korea Trilateral Investment Agreement within this calendar year, so that we may launch negotiations on a high-level FTA at the forthcoming Japan-China-Korea Trilateral Summit Meeting scheduled to be held in China next year. I very much hope to see positive steps toward this end especially because Prime Minister Noda is planning to visit China in the near future.

Various issues are outstanding between Japan and the United States at present, including Futenma, the Trans-Pacific Partnership, or "TPP," beef imports and child custody. On each issue we have been working actively in order to achieve steady progress.

Regarding the TPP, at the APEC summit in Honolulu last month, Prime Minister Noda said that the Government of Japan had decided to enter into consultations toward participating in the TPP negotiations with the countries concerned, and President Obama welcomed Japan's decision. With regard to the beef issue, Japan decided to review overall measures against BSE and started preparations for referring the matter to the Food Safety Commission. As for the issue of child custody, we have been working to submit a bill to ratify the Hague Convention to the Diet during the next year's Ordinary Session. What is painfully challenging is the relocation of Futenma Air Station. Let me just mention that, extremely regrettably, last week's inappropriate remark by the former director-general of the Okinawa Defense Bureau has made the situation in Okinawa even more complicated.

Foreign Minister Gemba is planning to visit Washington this month, and I hope that this paves the way for Prime Minister Noda's upcoming visit to Washington. Before Prime Minister Noda visits, I myself am planning to visit Washington and exchange views on various issues including the TPP Agreement.

As for Europe, I hope to see the scoping exercise for an EPA with the EU concluded by the end of this year and negotiations launched as early as practicable.

Next year I hope that Prime Minister Noda and Foreign Minister Gemba will also visit Russia at an appropriate time.

The Role of the Japan-U.S. Alliance

To return to the topic of the Japan-U.S. Alliance: under the Alliance, with the Japan-U.S. Security Treaty at its core, Japan and the United States are expected to coordinate their bilateral relations. This reaches beyond security in its purest sense to a broad range of fields including economy, culture and people-to-people exchanges. In recent years, moreover, our alliance has extended beyond the bilateral relationship to cover global issues.

In today's turbulent world, as Europe and the United States struggle to find solutions to their economic difficulties, Japan and the United States must further coordinate our efforts toward the management of global economy; trade and currency.

Trade Policy

First, on trade policy. Japan's strategy is to utilize the dynamism of the world's people, goods, and capital, incorporating their vitality into Japan's own growth. It means that we incorporate as "internal" demand not only Japan's domestic market of over 100 million people but also China's 1.3 billion, India's 1.2 billion, and ASEAN's 600 million for a total of over 3 billion in the Asian market, together with the one billion of the United States, Canada, Australia, New Zealand, and others—in sum, a market of 4 billion people. To this end, FTAs or EPAs with these countries are important.

Japan has concluded 13 EPAs thus far, including those with ASEAN, and India. However, Japan has yet to conclude EPAs with other major trading partners. They include China, our largest trading partner; the United States, our second-largest; the European Union, our third-largest; Korea, which is the fourth-largest; Taiwan, which ranks fifth; and Australia, which ranks sixth. Japan is trying to accelerate the process toward FTAs or EPAs with these trading partners, with the exception of Taiwan.

As I mentioned earlier, we intend to bring the joint study regarding the Japan-China-Korea agreement, which incorporates first-ranked China and fourth-ranked Korea, and the scoping exercise regarding the Japan-EU agreement, to a conclusion at the earliest opportunity and enter into negotiations on both next year.

With sixth-ranked Australia, Prime Minister Noda and Prime Minister Gillard agreed on the sidelines of last month's East Asia Summit in Bali that a Japan-Australia EPA negotiation round will be scheduled for this month in Canberra. We know that this is not an easy process, but we will work hard toward the conclusion of negotiations.

With the United States, the issue is the TPP, which is a particularly contentious matter in Japan. The reason why we are not considering a bilateral FTA is that the government of the United States is focusing on TPP negotiations, and a new bilateral FTA is not their interest now.

Among the concerns voiced domestically in Japan regarding TPP negotiations, the biggest apprehension voiced is that American systems might be imposed upon Japan. This apprehension has arisen possibly from the way the United States argued its case during past bilateral trade friction. Domestically, the Ministry of Foreign Affairs has repeatedly explained that we will properly negotiate with the United States and so such apprehension is not necessary. But unfortunately, we have not gained sufficient understanding from the public so far; we will try harder.

However, in this regard, with all due respect, I would like to draw attention of the American side to consider whether the "American Caesar" mindset promulgated by Supreme Commander of the Allied Powers General Douglas MacArthur right after the war might still exist. Caesar instilled Roman culture in the areas he had conquered. MacArthur, calling himself the "American Caesar", tried to plant American democracy on Japanese soil, and I think he succeeded. In fact he was perhaps too successful. But this "success story" may not necessarily work every time. In other areas, it might even backfire.

Here in Japan, we also hear the argument that rather than the TPP, we should pursue ASEAN+3 or ASEAN+6, which are frameworks that include China. However, it is not a question of "either-or". Japan should pursue both, playing a driving role toward the creation of a common framework in which both the United States and China participate in the future.

I think Japan should play a bridge-building role across the various FTA frameworks. The TPP and ASEAN+6 include some of the same countries (Vietnam, Malaysia, Singapore and Brunei.) If Japan participates in the TPP negotiation, Japan could play a bridge-building role between these two frameworks.

In this sense, I must say that an argument which tries to promote the TPP as a means of encircling China is wide of the mark. The country in possession of the largest amount of U.S. Treasuries is China. The country holding the most dollars as foreign exchange reserves is also China. Moreover, China is the largest market in the world. The TPP cannot afford to be hostile to China. It would be wise for us to avoid any premature assumption that the United States and China would never align themselves regarding the TPP.

This reminds me of what happened forty years ago. At that time, Japan never even dreamed that the United States and China would join hands with each other. Yet suddenly, out of the blue, President Nixon visited China and created a partnership with Chairman Mao Zedong.

The issue of how to deal with China is one of extreme importance. This year marks the one hundredth anniversary of the Xinhai Revolution, and as we consider how to deal with China, I would like to touch upon a speech given by Dr. Sun Yatsen in Kobe in 1924. Dr. Sun Yatsen contrasted the "Occidental hegemonic way" and "Oriental kingly way." The Occidental hegemonic way uses force to oppress the opponent. The Oriental kingly way is the culture of benevolence and morality that attracts people through virtue. He advocated that Japan should take the "Oriental kingly way" and develop a philosophy of peace. I often quote this story to my Chinese friends. In this context, today's situation looks a little ironic. That is why I quote Dr. Sun Yatsen's remarks and try to encourage China to take the kingly way. A policy of engagement, rather than containment is important, I believe.

The Global Currency System

Second, on the global currency system.

In recent years it has been sometimes pointed out by some economists that the unipolar structure of the U.S. dollar as the key currency may be faltering. At the same time, the ongoing European debt crisis has dramatically shaken confidence in the euro. With investors trying to hedge their risks, a rapid appreciation of the yen has been taking place since the summer.

There is definitely a growing need to create a more stable and robust global currency system. In light of this situation, some people talk about the need for a "more balanced global currency system." I believe that this is an extremely important subject which should be a matter of close consultation between Japan and the United States.

An Economic System Transcending National Boundaries

The international economic system is transitioning from an economic system having nations as its units to an economic system transcending national boundaries, and we can already see the buds of this new system forming. It is critically important that Japan and the Unites States coordinate closely in creating this new global system.

Pakistan

As I stated above, Japan and the United States should coordinate more closely not only on bilateral issues but also on global issues. As my last point, I would like to cite the case of Pakistan as providing a unique possibility for our partnership. It has been pointed out that U.S.-Pakistan relations have stagnated, especially since the elimination of Usama bin Laden, and that recently, they have further deteriorated due to bombing attacks upon Pakistani territory by NATO forces and following countermeasures and other actions by Pakistan. Japan, on the other hand, has maintained favorable relations with Pakistan. I think it is possible for Japan to play a bridge-building role between Pakistan and the United States.

Concluding Remarks

Secretary Clinton stated in a recent article that "the Asia-Pacific represents such a real 21st-century opportunity for us". Japan shares this view and we welcome it. There are many things we can do together to make the Asia-Pacific region really peaceful and prosperous.

70 years ago today saw the start of the war in the Pacific. None of us here today can forget these tragic events in our shared history. 60 years ago, after the war, Japanese prime P.M. Yoshida decided to conclude a security treaty with the United States and that was the start of what we now call the US-Japan Alliance.

During my student days, I studied in the United States and gained my Ph.D. from Johns Hopkins University SAIS. I made many friends there. Nowadays, we tend to take such ties and friendship for granted. But we should always remember that the precious ties of friendship between our two countries need to be nurtured with great care. One Japanese who recognized the significance of this was the great Dr. Inazo Nitobe, who also happens to be a graduate of Johns Hopkins University.

In concluding my humble speech, I would like to take the liberty of quoting from Dr. Nitobe: "It is my wish to serve as a bridge across the Pacific."

Thank you very much.